Alabama § 10A-3A-8.70 - Corporate Opportunities.

§ 10A-3A-8.70. Corporate Opportunities.

(a) If a director or officer pursues or takes advantage of a corporate opportunity directly, or indirectly through or on behalf of another person, that action may not be the subject of equitable relief, or give rise to an award of damages or other sanctions against the director, officer, or other person on the grounds that the corporate opportunity should have first been offered to the nonprofit corporation, if (1) before the director, officer, or other person becomes legally obligated respecting the corporate opportunity the director or officer brings it to the attention of the nonprofit corporation and either: (i) action by qualified directors disclaiming the nonprofit corporation’s interest in the corporate opportunity is taken in compliance with the same procedures as are set forth in Section 10A-3A-8.61(c) or Section 10A-3A-8.62(c); (ii) with respect to a membership nonprofit corporation, members’ action disclaiming the membership nonprofit corporation’s interest in the corporate opportunity is taken in compliance with the procedures set forth in Section 10A-3A-8.61(d); or (iii) if a controlling person has the power and authority to disclaim the nonprofit corporation’s interest in the corporate opportunity pursuant to a provision in the certificate of incorporation permitted by Section 10A-3A-8.01, action disclaiming the nonprofit corporation’s interest in the corporate opportunity is taken by that controlling person, in each case as if the decision being made concerned a conflicting interest transaction, except that, rather than making “required disclosure” as defined in Section 10A-3A-8.60, the director or officer shall have made prior disclosure to those acting on behalf of the nonprofit corporation of all material facts concerning the corporate opportunity known to the director or officer; or (2) the duty to offer the nonprofit corporation the corporate opportunity has been limited or eliminated pursuant to a provision of the certificate of incorporation adopted (and where required, made effective by action of qualified directors) in accordance with Section 10A-3A-2.02(b)(6).

(b) In any proceeding seeking equitable relief or other remedies based upon an alleged improper pursuit or taking advantage of a corporate opportunity by a director or officer directly, or indirectly through or on behalf of another person, the fact that the director or officer did not employ the procedure described in subsection (a)(1) before pursuing or taking advantage of the corporate opportunity shall not create an implication that the corporate opportunity should have been first presented to the nonprofit corporation or alter the burden of proof otherwise applicable to establish that the director or officer breached a duty to the nonprofit corporation in the circumstances.