Sec. 33-757. Liability for unlawful distribution.
Sec. 33-757. Liability for unlawful distribution. (a) A director who votes for or
assents to a distribution made in violation of section 33-687 or 33-887a or the certificate
of incorporation is personally liable to the corporation for the amount of the distribution
that exceeds what could have been distributed without violating section 33-687 or 33-887a or the certificate of incorporation if it is established that he did not perform his
duties in compliance with section 33-756 or 33-887a. In any proceeding commenced
under this section, a director has all of the defenses ordinarily available to a director.
(b) A director held liable under subsection (a) of this section for an unlawful distribution is entitled to contribution: (1) From every other director who could be held liable
under subsection (a) of this section for the unlawful distribution; and (2) from each
shareholder for the amount the shareholder accepted knowing the distribution was made
in violation of section 33-687 or 33-887a or the certificate of incorporation.
(c) A proceeding under this section to enforce (1) the liability of a director under
subsection (a) of this section is barred unless it is commenced within two years after
the date (A) on which the effect of the distribution was measured under subsection (e)
or (g) of section 33-687, (B) as of which a violation of subsection (a) of section 33-687
occurred as a consequence of disregarding a restriction in the certificate of incorporation,
or (C) on which the distribution of assets to shareholders was made under section 33-887a; or (2) contribution or recoupment under subsection (b) of this section is barred
unless it is commenced within one year after the liability of the claimant has been finally
adjudicated under subsection (a) of this section.
(d) For purposes of this section, a director shall be deemed to have voted for a
distribution if such director was present at the meeting of the board of directors or
committee thereof at the time such distribution was authorized and did not vote in dissent
therefrom, or if such director consented thereto pursuant to section 33-749.
(P.A. 94-186, S. 101, 215; P.A. 96-271, S. 75, 76, 254; P.A. 03-18, S. 7.)
History: P.A. 94-186 effective January 1, 1997; P.A. 96-271 replaced "articles" of incorporation with "certificate" of
incorporation where appearing, effective January 1, 1997; P.A. 03-18 made a technical change in Subsec. (a), amended
Subsecs. (a) and (b) to add references to Sec. 33-887a, and amended Subsec. (c) by adding provision re enforcement of
liability of director as Subdiv. (1), designating existing provision re date on which effect of distribution was measured as
Subpara. (A), adding provision re date as of which a violation of Sec. 33-687(a) occurred as Subpara. (B), adding provision
re date on which distribution of assets was made under Sec. 33-887a as Subpara. (C), and adding provision re enforcement
of contribution or recoupment as Subdiv. (2), effective July 1, 2003.
Annotations to former section 33-27:
Receiver may recover from director dividends received when capital was impaired. 72 C. 118; 77 C. 473. Cannot be
construed as negating possibility of conviction of embezzlement under section 53-355 in case of defendant who is, in
essence, sole owner of corporation from which funds were embezzled. 147 C. 589.
Annotations to former section 33-46:
When stockholder can sue directors. 26 C. 456; 87 C. 656. Care and diligence required. 30 C. 229; 74 C. 353; 75 C.
555; 82 C. 8; 89 C. 451. Cannot give away rights of corporation. 74 C. 353. Liability for fraudulent or improper diversion.
78 C. 600; 82 C. 559.
Annotations to former section 33-321:
Cited. 40 CA 771.
Subsec. (b):
See section 33-356. See also 30 C. 229; 72 C. 118; 74 C. 353; 75 C. 555; 77 C. 473; 78 C. 600; 82 C. 8; Id., 559; 89
C. 451, above.