{"data":{"id":"us-mt/35-14-832","jurisdiction":"us-mt","citation":"35-14-832","heading":"Director's liability for unlawful distributions.","body":"(1) A director who votes for or assents to a distribution in excess of what may be authorized and made pursuant to 35-14-640(1) or 35-14-1409(1) is personally liable to the corporation for the amount of the distribution that exceeds what could have been distributed without violating 35-14-640(1) or 35-14-1409(1) if the party asserting liability establishes that when taking the action the director did not comply with 35-14-830.\n(2) A director held liable under subsection (1) for an unlawful distribution is entitled to:\n(a) contribution from every other director who could be held liable under subsection (1) for the unlawful distribution; and\n(b) recoupment from each shareholder of the pro rata portion of the amount of the unlawful distribution the shareholder accepted knowing the distribution was made in violation of 35-14-640(1) or 35-14-1409(1).\n(3) A proceeding to enforce:\n(a) the liability of a director under subsection (1) is barred unless it is commenced within 2 years after the date:\n(i) on which the effect of the distribution was measured under 35-14-640(5) or (7);\n(ii) as of which the violation of 35-14-640(1) occurred as the consequence of disregard of a restriction in the articles of incorporation; or\n(iii) on which the distribution of assets to shareholders under 35-14-1409(1) was made; or\n(b) contribution or recoupment under subsection (2) is barred unless it is commenced within 1 year after the liability of the claimant has been finally adjudicated under subsection (1).","path":["TITLE 35. CORPORATIONS, PARTNERSHIPS, AND ASSOCIATIONS","CHAPTER 14. MONTANA BUSINESS CORPORATION ACT","Part 8. Directors and Officers"],"source_url":"https://mca.legmt.gov/bills/mca/title_0350/chapter_0140/part_0080/section_0320/0350-0140-0080-0320.html","current_through":"Montana Code Annotated 2025","vintage":"","retrieved_at":"2026-09-14T04:53:28Z","sha256":"33c2679c36e937ad874b300c35309b135065bb8957a4dcb066543851b485a007","source_id":"us-mt","stale":false,"prev":"us-mt/35-14-831","next":"us-mt/35-14-833"},"notice":"GroundRules: Original legal text. Not legal advice."}