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4-27-833. Liability for unlawful distributions.
Arkansas Code — all titles (historical 2020) · legal_authorities
4-27-833. Liability for unlawful distributions.
(a) Unless he complies with the applicable standards of conduct described in § 4-27-830, a director who votes for or assents to a distribution made in violation of this chapter or the articles of incorporation is personally liable to the corporation for the amount of the distribution that exceeds what could have been distributed without violating this chapter or the articles of incorporation.
(b) A director held liable for an unlawful distribution under subsection (a) of this section is entitled to contribution:
(1) from every other director who voted for or assented to the distribution without complying with the applicable standards of conduct described in § 4-27-830; and
(2) from each shareholder for the amount the shareholder accepted knowing the distribution was made in violation of this chapter or the articles of incorporation.
Source: Arkansas Code — historical release 78 (November 6, 2020) · 4-27-833
Stored review status: Historical 2020-11-06 source release; later amendments not reconciled; machine-extracted, not independently legally reviewed; source heading status: text_in_historical_source. A text match is a research starting point; applicability is not established.
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Stable record: arkansas_code:legal_authorities:4-27-833
Source file: gov.ar.code.title.04.odt
Pages: Not recorded – Not recorded
Passage SHA-256: 8cd4d44c3d052f0e480c228cb470c959b2a50691ea632b67f22bd270bd8cf16d
Source location: content.xml paragraph 16638
Stored source content
4-27-833. Liability for unlawful distributions.
(a) Unless he complies with the applicable standards of conduct described in § 4-27-830, a director who votes for or assents to a distribution made in violation of this chapter or the articles of incorporation is personally liable to the corporation for the amount of the distribution that exceeds what could have been distributed without violating this chapter or the articles of incorporation.
(b) A director held liable for an unlawful distribution under subsection (a) of this section is entitled to contribution:
(1) from every other director who voted for or assented to the distribution without complying with the applicable standards of conduct described in § 4-27-830; and
(2) from each shareholder for the amount the shareholder accepted knowing the distribution was made in violation of this chapter or the articles of incorporation.
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Arkansas Code — all titles (historical 2020) · legal_authorities
4-27-830. General standards for directors.
(a) A director shall discharge his duties as a director, including his duties as a member of a committee:
(1) in good faith;
(2) with the care an ordinarily prudent person in a like position would exercise under similar circumstances; and
(3) in a manner he reasonably believes to be in the best interests of the corporation.
(b) In discharging his duties a director is entitled to rely on information, opinions, reports, or statements, including financial statements and other financial data, if prepared or presented by:
(1) one (1) or more officers or employees of the corporation whom the director reasonably believes to be reliable and competent in the matters presented;
(2) legal counsel, public accountants, or other persons as to matters the director reasonably believes are within the person's professional or expert competence; or
(3) a committee of the board of directors of which he is not a member if the director reasonably believes the committee merits confidence.
(c) A director is not acting in good faith if he has knowledge concerning the matter in question that makes reliance otherwise permitted by subsection (b) of this section unwarranted.
(d) A director is not liable for any action taken as a director, or any failure to take any action, if he performed the duties of his office in compliance with this section.
Source: Arkansas Code — historical release 78 (November 6, 2020) · 4-27-830
Stored review status: Historical 2020-11-06 source release; later amendments not reconciled; machine-extracted, not independently legally reviewed; source heading status: text_in_historical_source. The source passage cites 4-27-830. This identifies an authority to review, not proof of applicability.