District of Columbia Code Division V. Local Business Affairs § 29-306.32. Directors' liability for unlawful distributions.
Current as of January 01, 2020 | Updated by FindLaw Staff
Welcome to FindLaw's Cases & Codes, a free source of state and federal court opinions, state laws, and the United States Code. For more information about the legal concepts addressed by these cases and statutes, visit FindLaw's Learn About the Law.
(a) A director who votes for or assents to a distribution in excess of what may be authorized and made pursuant to § 29-304.60(a) or § 29-312.09(a) shall be personally liable to the corporation for the amount of the distribution that exceeds what could have been distributed without violating § 29-304.60(a) or § 29-312.09(a) if the party asserting liability establishes that when taking the action the director did not comply with § 29-306.30.
(b) A director held liable under subsection (a) of this section for an unlawful distribution shall be entitled to:
(1) Contribution from every other director who could be held liable under subsection (a) of this section for the unlawful distribution; and
(2) Recoupment from each shareholder of the pro-rata portion of the amount of the unlawful distribution the shareholder accepted, knowing the distribution was made in violation of § 29-304.60(a) or § 29-312.09(a).
(c) A proceeding to enforce:
(1) The liability of a director under subsection (a) of this section shall be barred unless it is commenced within 2 years after the date:
(A) On which the effect of the distribution was measured under § 29-304.60(e) or (g);
(B) As of which the violation of § 29-304.60(a) occurred as the consequence of disregard of a restriction in the articles of incorporation; or
(C) On which the distribution of assets to shareholders under § 29-312.09(a) was made; or
(2) Contribution or recoupment under subsection (b) of this section shall be barred unless it is commenced within one year after the liability of the claimant has been finally adjudicated under subsection (a) of this section.
Cite this article: FindLaw.com - District of Columbia Code Division V. Local Business Affairs § 29-306.32. Directors' liability for unlawful distributions. - last updated January 01, 2020 | https://codes.findlaw.com/dc/division-v-local-business-affairs/dc-code-sect-29-306-32/
FindLaw Codes may not reflect the most recent version of the law in your jurisdiction. Please verify the status of the code you are researching with the state legislature or via Westlaw before relying on it for your legal needs.
Was this helpful?