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273.173 Defense of ultra vires.
No act of a corporation and no conveyance or transfer of real or personal property to or by
a corporation shall be invalid by reason of the fact that the corporation was without
capacity or power to do such act or to make or receive such conveyance or transfer, but
such lack of capacity or power may be asserted:
(1) In a proceeding by a member or a director against the corporation to enjoin the
doing or continuation of unauthorized acts, or the transfer of real or personal
property by or to the corporation. If the unauthorized acts or transfer sought to be
enjoined are being, or are to be, performed pursuant to any contract to which the
corporation is a party, the court may, if all of the parties to the contract are parties to
the proceeding and if it deems the same to be equitable, set aside and enjoin the
performance of such contract, and in so doing may allow to the corporation or the
other parties to the contract, as the case may be, compensation for the loss or
damage sustained by either of them which may result from the action of the court in
setting aside and enjoining the performance of such contract, but anticipated profits
to be derived from the performance of the contract shall not be awarded by the court
as a loss or damage sustained.
(2) In a proceeding by the corporation, whether acting directly or through a receiver,
trustee, or other legal representative, or through members in a representative suit,
against the officers or directors of the corporation for exceeding their authority.
(3) In a proceeding by the Attorney General, as provided in KRS 273.161 to 273.390, to
dissolve the corporation, or in a proceeding by the Attorney General to enjoin the
corporation from performing unauthorized acts, or in any other proceeding by the
Attorney General.
History: Created 1968 Ky. Acts ch. 165, sec. 6.
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