Maintenance of insurance or other financial arrangements against liability of member, manager, employee or agent.
1. A limited-liability company may purchase and maintain insurance or make other financial arrangements on behalf of any person who is or was a member, manager, employee or agent of the company, or is or was serving at the request of the company as a manager, member, employee or agent of another corporation, limited-liability company, partnership, joint venture, trust or other enterprise for any liability asserted against him and liability and expenses incurred by him in his capacity as a manager, member, employee or agent, or arising out of his status as such, whether or not the company has the authority to indemnify him against such liability and expenses.
2. The other financial arrangements made by the company pursuant to subsection 1 may include:
(a) The creation of a trust fund.
(b) The establishment of a program of self-insurance.
(c) The securing of its obligation of indemnification by granting a security interest or other lien on any assets of the company.
(d) The establishment of a letter of credit, guaranty or surety.
Ê No financial arrangement made pursuant to this subsection may provide protection for a person adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom, to be liable for intentional misconduct, fraud or a knowing violation of law, except with respect to the advancement of expenses or indemnification ordered by a court.
3. Any insurance or other financial arrangement made on behalf of a person pursuant to this section may be provided by the company or any other person approved by the managers, if any, or by the members, if no managers exist, even if all or part of the other person’s member’s interest in the company is owned by the company.
Last modified: February 26, 2006