2012 New York Consolidated Laws
REL - Rural Electric Cooperative
Article 2 - (10 - 29) PURPOSE; ORGANIZATION AND MANAGEMENT; POWERS
22 - Liability of directors in certain cases.

 
    § 22. Liability  of  directors  in  certain  cases. (a) Directors of a
  cooperative who vote for or concur in any  of  the  following  corporate
  actions shall be jointly and severally liable to the cooperative for the
  benefit of its creditors or members or the ultimate beneficiaries of its
  activities,  to  the  extent  of  any  injury  suffered by such persons,
  respectively, as a result of such action, or, if there be  no  creditors
  or members or ultimate beneficiaries so injured, to the cooperative as a
  result of such action:
    (1) the distribution of the cooperative's cash or property to members,
  directors  or  officers,  other  than  a  distribution  permitted  under
  sections thirty-five, sixty and sixty-one of this chapter; or
    (2) the distribution of assets after dissolution of the cooperative in
  violation of section thirty-five of this chapter or  without  paying  or
  adequately providing for all known liabilities of the cooperative.
    (b)  A  director  who  is  present  at  a meeting of the board, or any
  committee thereof, at which action specified in paragraph one or two  of
  subdivision  (a)  of  this  section  is  taken shall be presumed to have
  concurred in the action unless the director's dissent thereto  shall  be
  entered  in  the  minutes  of  the meeting, or unless the director shall
  submit his or her 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  cooperative
  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, at which 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  cooperative  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 cooperative as a result of such claims:
    (1) Upon reimbursement to the cooperative of any amount of an improper
  distribution  of the cooperative's cash or property, to be subrogated to
  the rights of the cooperative against members, directors or officers who
  received such distribution with knowledge of facts  indicating  that  it
  was  not  authorized  by  this  chapter,  in  proportion  to the amounts
  received by them respectively.
    (2) Upon payment to the cooperative  of  the  claim  of  the  attorney
  general  or  of any creditor by reason of a violation of subdivision (a)
  of this section, to be subrogated  to  the  rights  of  the  cooperative
  against any person who received an improper distribution of assets.
    (e)  (1)  A director or officer shall not be liable under this section
  if, in the circumstances, the director discharged his or her duty to the
  cooperative in good faith and with that degree of  diligence,  care  and
  skill  which  ordinarily  prudent  persons  would exercise under similar
  circumstances in like positions.
    (2) In discharging their duties, directors and officers,  when  acting
  in  good faith, may rely on information, opinions, reports or statements
  including financial statements and other financial data,  in  each  case
  prepared  or presented by:  (i) one or more officers or employees of the
  cooperative, whom the director believes to be reliable and competent  in

  the matters presented, (ii) counsel, public accountants or other persons
  as  to matters which the directors or officers believe to be within such
  person's professional or expert competence, or (iii) a committee of  the
  board upon which they do not serve, duly designated in accordance with a
  provision  of  the  certificate  of  incorporation  or the bylaws, as to
  matters within its designated authority, which committee  the  directors
  or  officers  believe to merit confidence, so long as in so relying they
  shall be acting in good faith and with that degree of care specified  in
  subdivision  (a)  of this section. Persons shall not be considered to be
  acting in good faith if they have knowledge  concerning  the  matter  in
  question  that would cause such reliance to be unwarranted.  Persons who
  so perform their duties shall have no liability by reason  of  being  or
  having been directors or officers of the cooperative.
    (f)  This  section shall not affect any liability otherwise imposed by
  law upon any director or officer.