2009 Iowa Code
Title 13 - Commerce
Subtitle 2 - Financial Institutions
CHAPTER 524 - BANKS
524.605 - LIABILITY OF DIRECTORS IN CERTAIN CASES.

        524.605  LIABILITY OF DIRECTORS IN CERTAIN CASES.
         In addition to any other liabilities imposed by law upon directors
      of a state bank:
         1.  Directors of a state bank who vote for or assent to the
      declaration of any dividend or other distribution of the assets of a
      state bank to its shareholders in willful or negligent violation of
      the provisions of this chapter or of any restrictions contained in
      the articles of incorporation, shall be jointly and severally liable
      to the state bank for the amount of such dividend which is paid or
      the value of such assets which are distributed in excess of the
      amount of such dividend or distribution which could have been paid or
      distributed without a violation of the provisions of this chapter or
      of the restrictions in the articles of incorporation.
         2.  The directors of a state bank who vote for or assent to any
      distribution of assets of a state bank to its shareholders during the
      dissolution of the state bank without the payment and discharge of,
      or making adequate provision for, all known debts, obligations, and
      liabilities of the state bank shall be jointly and severally liable
      to the state bank for the value of such assets which are distributed,
      to the extent that such debts, obligations and liabilities of the
      state bank are not thereafter paid and discharged.
         3.  The directors of a state bank who, willfully or negligently,
      vote for or assent to loans or extensions of credit in violation of
      the provisions of this chapter, shall be jointly and severally liable
      to the state bank for the total amount of any loss sustained.
         4.  The directors of a state bank who, willfully or negligently,
      vote for or assent to any investment of funds of the state bank in
      violation of the provisions of this chapter shall be jointly and
      severally liable to the state bank for the amount of any loss
      sustained on such investment.
         A director of a state bank who is present at a meeting of its
      board of directors at which action on any matter is taken shall be
      presumed to have assented to the action taken unless the director's
      dissent shall be entered in the minutes of the meeting or unless the
      director shall file the director's written dissent to such action
      with the individual acting as the secretary of the meeting before the
      adjournment thereof or shall forward such dissent by registered or
      certified mail to the cashier of the state bank promptly after the
      adjournment of the meeting.  Such right to dissent shall not apply to
      a director who voted in favor of such action.
         A director shall not be liable under subsection 1, 2, 3, or 4 of
      this section if the director relied and acted in good faith upon
      information represented to the director to be correct by an officer
      or officers of such state bank or stated in a written report by a
      certified public accountant or firm of such accountants.  No director
      shall be deemed to be negligent within the meaning of this section if
      the director in good faith exercised that diligence, care and skill
      which an ordinarily prudent person would exercise as a director under
      similar circumstances.
         Any director against whom a claim shall be asserted under or
      pursuant to this section for the payment of a dividend or other
      distribution of assets of a state bank and who shall be held liable
      thereon, shall be entitled to contribution from the shareholders who
      accepted or received any such dividend or assets, knowing such
      dividend or distribution to have been made in violation of the
      provisions of this chapter, in proportion to the amounts received by
      them respectively.  Further, any director against whom a claim shall
      be asserted pursuant to this section for the payment of any liability
      imposed by this section shall be entitled to contribution from any
      director found to be similarly liable.
         Whenever the superintendent deems it necessary the superintendent
      may require, after affording an opportunity for a hearing upon
      adequate notice, that a director or directors whom the superintendent
      reasonably believes to be liable to a state bank pursuant to
      subsection 1, 2, 3, or 4 of this section, to place in an escrow
      account in an insured bank located in this state, as directed by the
      superintendent, an amount sufficient to discharge any liability which
      may accrue pursuant to subsection 1, 2, 3, or 4 of this section.  The
      amount so deposited shall be paid over to the state bank by the
      superintendent upon final determination of the amount of such
      liability.  Any portion of the escrow account which is not necessary
      to meet such liability shall be repaid on a pro rata basis to the
      directors who contributed to the fund.
         Any action seeking to impose liability under this section, other
      than liability for contribution, shall be commenced only within five
      years of the action complained of and not thereafter.  

         Section History: Early Form

         [C71, 73, 75, 77, 79, 81, § 524.605] 

         Section History: Recent Form

         95 Acts, ch 148, §63
         Referred to in § 524.302, 524.702