Iowa Code 490.854 – Court-ordered indemnification and advance for expenses
Current as of: 2024 | Check for updates
|
Other versions
1. A person who is a party to a proceeding because the person is a director may apply for indemnification or an advance for expenses to the court conducting the proceeding or to another court of competent jurisdiction. After receipt of an application and after giving any notice it considers necessary, the court shall do any of the following:
a. Order indemnification if the court determines that the director is entitled to mandatory indemnification under section 490.852.
b. Order indemnification or advance for expenses if the court determines that the director is entitled to indemnification or advance for expenses pursuant to a provision authorized by section 490.858, subsection 1.
c. (1) Order indemnification or advance for expenses if the court determines, in view of all the relevant circumstances, that it is fair and reasonable to do any of the following:
(a) Indemnify the director.
(b) Advance expenses to the director.
(2) The court shall order indemnification or advance for expenses, even if in the case of subparagraph (1), subparagraph division (a) or (b), the director has not met the relevant standard of conduct set forth in section 490.851, subsection 1, failed to comply with section 490.853 or was adjudged liable in a proceeding referred to in section 490.851, subsection 4, paragraph “a” or “b”. However, if the director was adjudged so liable the director’s indemnification shall be limited to expenses incurred in connection with the proceeding.
Terms Used In Iowa Code 490.854
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Expenses: means reasonable expenses of any kind, including reasonable fees and expenses of counsel and experts, that are incurred in connection with a matter. See Iowa Code 490.140
- following: when used by way of reference to a chapter or other part of a statute mean the next preceding or next following chapter or other part. See Iowa Code 4.1
- Indemnification: In general, a collateral contract or assurance under which one person agrees to secure another person against either anticipated financial losses or potential adverse legal consequences. Source: FDIC
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Person: means a person as defined in section 4. See Iowa Code 490.140
- Proceeding: includes a civil suit and criminal, administrative, and investigatory action. See Iowa Code 490.140
2. If the court determines that the director is entitled to indemnification under subsection 1, paragraph “a”, or to indemnification or advance for expenses under subsection 1, paragraph “b”, it shall also order the corporation to pay the director’s expenses incurred in connection with obtaining court-ordered indemnification or advance for expenses. If the court determines that the director is entitled to indemnification or advance for expenses under subsection 1, paragraph “c”, it may also order the corporation to pay the director’s expenses to obtain court-ordered indemnification or advance for expenses.