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Pennsylvania Statutes Title 7 P.S. Banks and Banking § 1304. Liability for unlawful dividends and distributions

Current as of January 01, 2025 | Updated by Findlaw Staff

(a) Prohibition--The directors of an institution shall not declare dividends, or authorize or ratify the distribution of any part of its assets to shareholders by purchase of its shares or otherwise, except as authorized by this act.

(b) Directors liable--The directors under whose administration an unlawful dividend or distribution is made shall be jointly and severally liable to the institution for the amount thereof except:

(i) a director who voiced his dissent at the meeting at which the action was authorized and requested that his dissent be entered on the minutes of the meeting or who, if he was absent at the time, promptly upon learning of the action filed his written objection thereto with the secretary of the institution, or

(ii) a director who relied and acted in good faith upon financial statements of the institution represented to him to be correct by the president of the institution or by an officer responsible for its accounts or stated in a written report by an independent public or certified public accountant or firm of such accountants fairly to reflect the financial condition of the institution.

(c) Contribution--Each director held liable under this section shall be entitled to contribution from the other directors who are likewise liable.

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Cite this article: FindLaw.com - Pennsylvania Statutes Title 7 P.S. Banks and Banking § 1304. Liability for unlawful dividends and distributions - last updated January 01, 2025 | https://codes.findlaw.com/pa/title-7-ps-banks-and-banking/pa-st-sect-7-1304/

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