                                 CODE OF VIRGINIA

LIABILITY FOR UNLAWFUL DISTRIBUTIONS (§ 13.1-692)

A. A director who votes for or assents to a distribution in excess of what may
be authorized and made pursuant to this chapter or the articles of incorporation
is personally liable to the corporation and its creditors for the amount of the
distribution that exceeds what could have been distributed without violating
this chapter or the articles of incorporation if the party asserting liability
establishes that when taking the action the director did not comply with &#xA7;
13.1-690.

B. A director held liable for an unlawful distribution under subsection A is
entitled to:

   1. Contribution from every other director who could be held liable under
   subsection A for the unlawful distribution; and

   2. Recoupment from the shareholders who received the unlawful distribution in
   proportion to the amounts of such unlawful distribution received by them
   respectively.

C. No suit shall be brought against any director for any liability imposed by
subsection A except within two years after the right of action shall accrue.

D. Contribution or recoupment under subsection B is barred unless it is
commenced within one year after the liability of the claimant has been finally
adjudicated under subsection A.

HISTORY: Code 1950, §§ 13-206, 13-207, 13.1-44; 1956, c. 428; 1985, c. 522;
2005, c. 765; 2019, c. 734.