43-38-904 - Liability for unlawful distribution.
43-38-904. Liability for unlawful distribution.
(a) Unless the member or director complies with the applicable standards of conduct set forth in § 43-38-616, a member or director who votes for or assents to a distribution made in violation of § 43-38-903 or the articles or bylaws is personally liable to the cooperative for the amount of the distribution that exceeds what could have been distributed without violating § 43-38-903 or the articles or bylaws.
(b) A director or member held liable for an unlawful distribution under subsection (a) is entitled to contribution:
(1) From every other director and member who voted for or assented to the distribution; and
(2) From each member for the amount the member accepted, knowing the distribution was made in violation of § 43-38-903 or the articles or bylaws.
(c) Subject to subsection (d), this section shall not affect any obligation or liability of a director or member under the articles or bylaws or other applicable law for the amount of a distribution.
(d) Unless otherwise agreed, a member who receives a distribution from a cooperative or an officer or director who votes for or assents to the distribution shall have no liability under this section or other applicable law for the amount of the distribution after the expiration of three (3) years from the date of the distribution.
[Acts 2004, ch. 534, § 29.]