Texas Business Corporation Act - Article 2.41. Liability Of Directors And Shareholders In Certain Cases

Legal Research Home > Texas Lawyer > Business Corporation Act > Texas Business Corporation Act - Article 2.41. Liability Of Directors And Shareholders In Certain Cases

Art. 2.41. Liability of Directors and Shareholders in Certain Cases           

A. In addition to any other liabilities imposed by law upon 
directors of a corporation:

(1) Directors of a corporation who vote for or assent to a 
distribution by the corporation that is not permitted by Article 
2.38 of this Act shall be jointly and severally liable to the 
corporation for the amount by which the distributed amount exceeds 
the amount permitted by Article 2.38 of this Act to be distributed;  
provided that a director shall have no liability for the excess 
amount, or any part of that excess, if on any date after the date of 
the vote or assent authorizing the distribution, a distribution of 
that excess or that part would have been permitted by Article 2.38.

(2) An action may not be brought against a director for liability 
imposed by this section after two years after the date on which the 
act alleged to give rise to the liability occurred.

B. A director of a corporation who is present at a meeting of its 
board of directors at which action on any corporate matter is taken 
shall be presumed to have assented to the action taken unless his 
dissent shall be entered in the minutes of the meeting or unless he 
shall file his written dissent to such action with the person acting 
as the secretary of the meeting before the adjournment thereof or 
shall forward such dissent by registered mail to the secretary of 
the corporation immediately after the adjournment of the meeting.  
Such right to dissent shall not apply to a director who voted in 
favor of such action.

C. A director shall not be liable under Subsection (1) of Section A 
of this Article if, in voting for or assenting to the distribution, 
the director:

(1) relied in good faith and with ordinary care upon the statements, 
valuations, or information referred to in Article 2.38-3 of this 
Act, or upon other information, opinions, reports, or statements, 
including financial statements and other financial data, 
concerning the corporation or another person, that were prepared or 
presented by:

(a) one or more officers or employees of the corporation;                     

(b) legal counsel, public accountants, investment bankers, or other 
persons as to matters the director reasonably believes are within 
the person's professional or expert competence;  or

(c) a committee of the board of directors of which the director is 
not a member;

(2) acting in good faith and with ordinary care, considered the 
assets of the corporation to be at least of their book value;  or

(3) in determining whether the corporation made adequate provision 
for payment, satisfaction or discharge of all of its liabilities 
and obligations as provided in Articles 6.04 and 7.12 of this Act, 
relied in good faith and with ordinary care upon financial 
statements of, or other information concerning, any person who was 
or became contractually obligated to pay, satisfy, or discharge 
some or all of those liabilities or obligations.

D. In the discharge of any duty imposed or power conferred upon a 
director, including as a member of a committee, the director, may in 
good faith and with ordinary care, rely on information, opinions, 
reports, or statements, including financial statements and other 
financial data, concerning the corporation or another person, that 
were prepared or presented by:

(1) one or more officers or employees of the corporation;                     

(2) legal counsel, public accountants, investment bankers, or other 
persons as to matters the director reasonably believes are within 
the person's professional or expert competence;  or

(3) a committee of the board of directors of which the director is 
not a member.

A director is not relying in good faith within the meaning of this 
Section if the director has knowledge concerning the matter in 
question that makes reliance otherwise permitted by this Section 
unwarranted.

E. A director against whom a claim shall be asserted under this 
Article for a distribution made by the corporation, and who shall be 
held liable thereon, shall be entitled to contribution from the 
shareholders who accepted or received such distribution knowing 
that such distribution was not permitted by Article 2.38, in 
proportion to the amounts received by them, respectively.

F. A director found liable with respect to a claim shall be entitled 
to contribution as appropriate to achieve equity from each of the 
other directors who are liable with respect to that claim.

G. The liability provided in Subsection (1) of Section A of this 
Article shall be the only liability of directors to a corporation or 
its creditors for authorizing a distribution by the corporation 
that is not permitted by Article 2.38 of this Act. The liability 
provided in Section E of this Article shall be the only liability of 
shareholders to a corporation or its creditors for accepting or 
receiving a distribution by the corporation that is not permitted 
by Article 2.38 of this Act;  provided, however, that this Section 
does not limit any liability under the Uniform Fraudulent Transfer 
Act or the United States Bankruptcy Code.

Acts 1955, 54th Leg., p. 239, ch. 64, eff. Sept. 6, 1955.  Amended by 
Acts 1983, 68th Leg., p. 3153, ch. 540, Sec. 8, eff. Aug. 29, 1983;  
Acts 1987, 70th Leg., ch. 93, Sec. 17, eff. Aug. 31, 1987;  Acts 
1989, 71st Leg., ch. 801, Sec. 22, eff. Aug. 28, 1989;  Acts 1991, 
72nd Leg., ch. 901, Sec. 15, eff. Aug. 26, 1991;  Acts 1991, 72nd 
Leg., ch. 901, Sec. 16, eff. Aug. 26, 1991;  Acts 1993, 73rd Leg., 
ch. 215, Sec. 2.10, eff. Sept. 1, 1993.

Sec. A amended by Acts 2003, 78th Leg., ch. 238, Sec. 18, eff. Sept. 
1, 2003.

Last modified: August 10, 2007