Connecticut § 33-757 - Liability for unlawful distribution.

§ 33-757. Liability for unlawful distribution.

Sec. 33-757. Liability for unlawful distribution. (a) A director who votes for or assents to a distribution made in violation of section 33-687 or subsection (a) of section 33-887b or the certificate of incorporation is personally liable to the corporation for the amount of the distribution that exceeds what could have been distributed without violating section 33-687 or subsection (a) of section 33-887b or the certificate of incorporation if it is established that he did not perform his duties in compliance with section 33-756 or subsection (a) of section 33-887b. In any proceeding commenced under this section, a director has all of the defenses ordinarily available to a director.

(b) A director held liable under subsection (a) of this section for an unlawful distribution is entitled to contribution: (1) From every other director who could be held liable under subsection (a) of this section for the unlawful distribution; and (2) from each shareholder for the amount the shareholder accepted knowing the distribution was made in violation of section 33-687 or subsection (a) of section 33-887b or the certificate of incorporation.

(c) A proceeding under this section to enforce (1) the liability of a director under subsection (a) of this section is barred unless it is commenced within two years after the date (A) on which the effect of the distribution was measured under subsection (e) or (g) of section 33-687, (B) as of which a violation of subsection (a) of section 33-687 occurred as a consequence of disregarding a restriction in the certificate of incorporation, or (C) on which the distribution of assets to shareholders was made under subsection (a) of section 33-887b; or (2) contribution or recoupment under subsection (b) of this section is barred unless it is commenced within one year after the liability of the claimant has been finally adjudicated under subsection (a) of this section.

(d) For purposes of this section, a director shall be deemed to have voted for a distribution if such director was present at the meeting of the board of directors or committee thereof at the time such distribution was authorized and did not vote in dissent therefrom, or if such director consented thereto pursuant to section 33-749.

(P.A. 94-186, S. 101, 215; P.A. 96-271, S. 75, 76, 254; P.A. 03-18, S. 7; P.A. 15-48, S. 5.)

History: P.A. 94-186 effective January 1, 1997; P.A. 96-271 replaced “articles” of incorporation with “certificate” of incorporation where appearing, effective January 1, 1997; P.A. 03-18 made a technical change in Subsec. (a), amended Subsecs. (a) and (b) to add references to Sec. 33-887a, and amended Subsec. (c) by adding provision re enforcement of liability of director as Subdiv. (1), designating existing provision re date on which effect of distribution was measured as Subpara. (A), adding provision re date as of which a violation of Sec. 33-687(a) occurred as Subpara. (B), adding provision re date on which distribution of assets was made under Sec. 33-887a as Subpara. (C), and adding provision re enforcement of contribution or recoupment as Subdiv. (2), effective July 1, 2003; P.A. 15-48 substituted “subsection (a) of section 33-887b” for references to Sec. 33-887a.