Colo. Rev. Stat. » Title 7
Colorado Revised Statutes

Colo. Rev. Stat. § 7-109-104 (2026)

Advance of expenses to directors

✓ current as of July 2026
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(1) A corporation may, before final disposition of a proceeding, pay for or reimburse the reasonable expenses incurred by an individual who is a party to a proceeding because that person is a director if:

(a) The director delivers to the corporation a written affirmation of the director's good faith belief that:

(I) The director has met the relevant standard of conduct described in section 7-109-102; or

(II) The proceeding involves conduct for which liability has been eliminated under a provision in the articles of incorporation as authorized by section 7-102-102 (2)(d); and

(b) The director delivers to the corporation a written undertaking, executed personally or on the director's behalf, to repay any funds advanced if the director is not entitled to mandatory indemnification under section 7-109-103 and it is ultimately determined under section 7-109-105 or 7-109-106 that the director has not met the relevant standard of conduct described in section 7-109-102.

(2) The undertaking required by subsection (1)(b) of this section is an unlimited general obligation of the director but need not be secured and may be accepted without reference to financial ability to make repayment.

(3) Authorizations of payments under this section shall be made in the manner specified in section 7-109-106.

Source: L. 93: Entire article added, p. 791, § 1, effective July 1, 1994. L. 2004: (1) amended, p. 1501, § 267, effective July 1. L. 2019: Entire section amended, (SB 19-086), ch. 166, p. 1938, § 40, effective July 1, 2020.

Notes of Decisions
Cited in 2 cases, 2000–2005 · leading case: Adelphia Commc'ns Corp. v. Rigas (In Re Adelphia Commc'ns Corp.), 323 B.R. 345 (Bankr. S.D.N.Y. 2005).
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Adelphia Commc'ns Corp. v. Rigas (In Re Adelphia Commc'ns Corp.), 323 B.R. 345 (Bankr. S.D.N.Y. 2005). “Colo.Rev.Stat. Ann. § 7-109-104 (2004) (referring to Colo.”
Waskel v. Guar. Nat'l Corp., 23 P.3d 1214 (Colo. Ct. App. 2000). “Colorado, however, still retains the pre-1994 version of the MBCA, which does not prohibit indemnification of persons who failed to act in good faith or in the best interests of the corporation; rather, the statutory prohibition against indemnification in § 7-109-102 is limited…”
— Colo. Rev. Stat. § 7-109-104(4) — 1 case
Waskel v. Guar. Nat'l Corp., 23 P.3d 1214 (Colo. Ct. App. 2000). “Colorado, however, still retains the pre-1994 version of the MBCA, which does not prohibit indemnification of persons who failed to act in good faith or in the best interests of the corporation; rather, the statutory prohibition against indemnification in § 7-109-102 is limited…”
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