{"data":{"id":"us-ky/krs-275.170","jurisdiction":"us-ky","citation":"KRS 275.170","heading":"Duties of care and loyalty -- Approval of conflict of interest transactions --","body":"Remedy for breach of the duty of loyalty.\nUnless otherwise provided in a written operating agreement:\n(1) With respect to any claim for breach of the duty of care, a memb er or manager shall\nnot be liable, responsible, or accountable in damages or otherwise to the limited\nliability company or the members of the limited liability company for any action\ntaken or failure to act on behalf of the limited liability company unless  the act or\nomission constitutes wanton or reckless misconduct.\n(2) The duty of loyalty applicable to each member and manager shall be to account to\nthe limited liability company and hold as trustee for it any profit or benefit derived\nby that person witho ut the consent of more than one -half (1/2) by number of the\ndisinterested managers, or a majority-in-interest of the members from:\n(a) Any transaction connected with the conduct or winding up of the limited\nliability company; or\n(b) Any use by the member o r manager of its property, including, but not limited\nto, confidential or proprietary information of the limited liability company or\nother matters entrusted to the person as a result of his or her status as manager\nor member.\n(3) In determining whether a transaction has received the approval of a majority -in-\ninterest of the members, membership interests owned by or voted under the control\nof the member or manager whose actions are under review in accordance with\nsubsection (2) of this section, and membersh ip interests owned by an entity owned\nby or voted under the control of that member or manager, shall not be counted in a\nvote of the members to determine whether to consent, and the membership interests\nshall not be counted in determining whether a quorum,  if required by a written\noperating agreement, exists to consider whether to consent. That a transaction was\nfair to the limited liability company shall not constitute a defense to the failure to\nrequest and receive the required consent of the disinterested managers or members.\n(4) A member of a limited liability company in which management is vested in\nmanagers under KRS 275.165(2) and who is not a manager shall have no duties to\nthe limited liability company or the other members solely by reason of acting  in his\nor her capacity as a member.","path":["KRS Chapter 275"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=40445","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:53:27Z","sha256":"211a8341b4e331d4146086ea106ba2abec21f0db9e54729e5b6a76b3b10f88f0","source_id":"us-ky","stale":false,"prev":"us-ky/krs-275.165","next":"us-ky/krs-275.172"},"notice":"GroundRules: Original legal text. Not legal advice."}