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(1) A director who votes for or assents to a distribution in excess of what may be authorized and made pursuant to 35-14-640(1) or 35-14-1409(1) is personally liable to the corporation for the amount of the distribution that exceeds what could have been distributed without violating 35-14-640(1) or 35-14-1409(1) if the party asserting liability establishes that when taking the action the director did not comply with 35-14-830.
(2) A director held liable under subsection (1) for an unlawful distribution is entitled to:
(a) contribution from every other director who could be held liable under subsection (1) for the unlawful distribution; and
(b) 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 35-14-640(1) or 35-14-1409(1).
(3) A proceeding to enforce:
(a) the liability of a director under subsection (1) is barred unless it is commenced within 2 years after the date:
(i) on which the effect of the distribution was measured under 35-14-640(5) or (7);
(ii) as of which the violation of 35-14-640(1) occurred as the consequence of disregard of a restriction in the articles of incorporation; or
(iii) on which the distribution of assets to shareholders under 35-14-1409(1) was made; or
(b) contribution or recoupment under subsection (2) is barred unless it is commenced within 1 year after the liability of the claimant has been finally adjudicated under subsection (1).
Cite this article: FindLaw.com - Montana Title 35. Corporations, Partnerships, and Associations § 35-14-832. Director's liability for unlawful distributions - last updated April 27, 2021 | https://codes.findlaw.com/mt/title-35-corporations-partnerships-and-associations/mt-code-ann-sect-35-14-832/
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