Montana § 35-14-832 - Director's Liability For Unlawful Distributions

§ 35-14-832. Director's Liability For Unlawful Distributions

Director's liability for unlawful distributions. (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).