2006 New York Code - Liability Of Directors In Certain Cases.

 
  § 719. Liability of directors in certain cases.
    (a) Directors  of  a  corporation who vote for or concur in any of the
  following corporate actions shall be jointly and severally liable to the
  corporation for the benefit of its creditors  or  shareholders,  to  the
  extent of any injury suffered by such persons, respectively, as a result
  of such action:
    (1) The  declaration  of  any  dividend  or  other distribution to the
  extent that it is contrary to the provisions of paragraphs (a)  and  (b)
  of section 510 (Dividends or other distributions in cash or property).
    (2) The  purchase  of the shares of the corporation to the extent that
  it is contrary to the provisions of section 513 (Purchase or  redemption
  by a corporation of its own shares).
    (3) The  distribution  of  assets to shareholders after dissolution of
  the corporation without paying or adequately  providing  for  all  known
  liabilities  of  the  corporation,  excluding  any  claims  not filed by
  creditors within the time limit set in a notice given to creditors under
  articles 10 (Non-judicial dissolution) or 11 (Judicial dissolution).
    (4) The  making  of  any  loan  contrary  to  section  714  (Loans  to
  directors).
    (b) A  director  who  is  present  at  a  meeting of the board, or any
  committee thereof, when action specified in paragraph (a) is taken shall
  be presumed to have concurred in the action unless his  dissent  thereto
  shall  be  entered  in  the  minutes  of the meeting, or unless he shall
  submit his written dissent to the person acting as the secretary of  the
  meeting  before  the  adjournment  thereof,  or shall deliver or send by
  registered mail  such  dissent  to  the  secretary  of  the  corporation
  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  who  is  absent  from a meeting of the board, or any committee
  thereof, when such action is taken shall be presumed to  have  concurred
  in  the  action  unless  he shall deliver or send by registered mail his
  dissent thereto to the secretary of the corporation or shall cause  such
  dissent  to be filed with the minutes of the proceedings of the board or
  committee within a reasonable time after learning of such action.
    (c) Any director against whom a claim is successfully  asserted  under
  this  section shall be entitled to contribution from the other directors
  who voted for or concurred  in  the  action  upon  which  the  claim  is
  asserted.
    (d) Directors against whom a claim is successfully asserted under this
  section  shall be entitled, to the extent of the amounts paid by them to
  the corporation as a result of such claims:
    (1) Upon payment to the corporation  of  any  amount  of  an  improper
  dividend  or  distribution,  to  be  subrogated  to  the  rights  of the
  corporation  against  shareholders  who  received   such   dividend   or
  distribution  with  knowledge  of  facts  indicating  that  it  was  not
  authorized by section 510, in proportion to the amounts received by them
  respectively.
    (2) Upon payment to the corporation of  any  amount  of  the  purchase
  price of an improper purchase of shares, to have the corporation rescind
  such  purchase  of  shares  and  recover for their benefit, but at their
  expense, the amount of such purchase price from any seller who sold such
  shares with knowledge of facts indicating that such purchase  of  shares
  by the corporation was not authorized by section 513.
    (3) Upon  payment  to  the corporation of the claim of any creditor by
  reason of a violation of subparagraph (a) (3), to be subrogated  to  the
  rights  of the corporation against shareholders who received an improper
  distribution of assets.
    (4) Upon payment to the corporation of the amount  of  any  loan  made
  contrary  to  section  714,  to  be  subrogated  to  the  rights  of the
  corporation against a director who received the improper loan.
    (e) A  director  shall  not  be  liable  under this section if, in the
  circumstances, he performed his duty to the corporation under  paragraph
  (a) of section 717.
    (f) This  section  shall not affect any liability otherwise imposed by
  law upon any director.