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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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