Iowa Code 504.835 – Liability for unlawful distributions
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1. Unless a director complies with the applicable standards of conduct described in section 504.831, a director who votes for or assents to a distribution made in violation of this chapter is personally liable to the corporation for the amount of the distribution that exceeds what could have been distributed without violating this chapter.
Terms Used In Iowa Code 504.835
- Distribution: means the payment of a dividend or any part of the income or profit of a corporation to its members, directors, or officers. See Iowa Code 504.141
- 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
- Person: includes any individual or entity. See Iowa Code 504.141
2. A director held liable for an unlawful distribution under subsection 1 is entitled to contribution from both of the following:
a. Every other director who voted for or assented to the distribution without complying with the applicable standards of conduct described in section 504.831.
b. 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 this chapter.