2019 Tennessee Code
Title 48 - Corporations and Associations
Nonprofit Corporations
Chapter 58 - Directors and Officers
Part 3 - Standards of Conduct
§ 48-58-302. Personal liability of director -- Enforcement.

Universal Citation: TN Code § 48-58-302 (2019)
  • (a) Unless the director complies with the applicable standards of conduct described in § 48-58-301, a director who votes for or assents to a distribution made in violation of chapters 51-68 of this title or the charter is personally liable to the corporation for the amount of the distribution that exceeds what could have been distributed without violating chapters 51-68 of this title or the charter.

  • (b) A director held liable for an unlawful distribution under subsection (a) is entitled to contribution from:

    • (1) Every other director who voted for or assented to the distribution without complying with the applicable standards of conduct described in § 48-58-301; and

    • (2) Each person who received an unlawful distribution for the amount of the distribution, whether or not the person receiving the distribution knew it was made in violation of chapters 51-68 of this title or the charter.

  • (c) A proceeding to enforce:

    • (1) The liability of a director under subsection (a) is barred unless it is commenced within two (2) years after the liability of such director has been finally adjudicated; and

    • (2) Contribution or recoupment under subsection (b) is barred unless it is commenced within one (1) year after the liability of the claimant has been finally adjudicated.

  • (d) Commencement of actions described in § 48-58-601 shall be governed by such section.

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