KRS 273A.100: Duties of managers.

(1) A manager owes to the unincorporated nonprofit association the fiduciary duties of

loyalty and care.

(2) A manager shall manage the unincorporated nonprofit association in good faith, in a

manner the manager honestly believes to be in the best interests of the association,

and with such care, including reasonable inquiry, as a prudent person would

reasonably exercise in a similar position and under similar circumstances. A

manager may rely in good faith upon any opinion, report, statement, or other

information provided by another person that the manager reasonably believes is a

competent and reliable source for the information.

(3) After full disclosure of all material facts, a specific act or transaction that would

otherwise violate the duty of loyalty by a manager may be authorized or ratified by a

majority of the members that are not interested directly or indirectly in the act or

transaction.

(4) A manager that makes a business judgment in good faith satisfies the duties

specified in subsection (1) of this section if the manager:

(a) Is not interested, directly or indirectly, in the subject of the business judgment

and is otherwise able to exercise independent judgment;

(b) Is informed with respect to the subject of the business judgment to the extent

the manager reasonably believes to be appropriate under the circumstances;

and

(c) Believes that the business judgment is in the best interests of the

unincorporated nonprofit association and in accordance with its purposes.

(5) The governing principles in a r ecord may limit or eliminate the liability of a

manager to the unincorporated nonprofit association or its members for damages for

any action taken, or for failure to take any action, as a manager, except liability for:

(a) The amount of financial benefit improperly received by a manager;

(b) An intentional infliction of harm on the association or one (1) or more of its

members;

(c) An intentional violation of criminal law;

(d) Breach of the duty of loyalty; or

(e) Improper distributions.