(a) The directors of every corporation, subject to any restrictions contained in its certificate of incorporation, may declare and pay dividends upon the shares of its capital stock either:
(1) Out of its surplus, as defined in and computed in accordance with §§ 154 and 244 of this title; or
(2) In case there shall be no such surplus, out of its net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year.
If the capital of the corporation, computed in accordance with §§ 154 and 244 of this title, shall have been diminished by depreciation in the value of its property, or by losses, or otherwise, to an amount less than the aggregate amount of the capital represented by the issued and outstanding stock of all classes having a preference upon the distribution of assets, the directors of such corporation shall not declare and pay out of such net profits any dividends upon any shares of any classes of its capital stock until the deficiency in the amount of capital represented by the issued and outstanding stock of all classes having a preference upon the distribution of assets shall have been repaired. Nothing in this subsection shall invalidate or otherwise affect a note, debenture or other obligation of the corporation paid by it as a dividend on shares of its stock, or any payment made thereon, if at the time such note, debenture or obligation was delivered by the corporation, the corporation had either surplus or net profits as provided in (a)(1) or (2) of this section from which the dividend could lawfully have been paid.
(b) Subject to any restrictions contained in its certificate of incorporation, the directors of any corporation engaged in the exploitation of wasting assets (including but not limited to a corporation engaged in the exploitation of natural resources or other wasting assets, including patents, or engaged primarily in the liquidation of specific assets) may determine the net profits derived from the exploitation of such wasting assets or the net proceeds derived from such liquidation without taking into consideration the depletion of such assets resulting from lapse of time, consumption, liquidation or exploitation of such assets.
8 Del. C. 1953,
§
170;
56 Del. Laws, c. 50;
56 Del. Laws, c. 186,
§
9;
59 Del. Laws, c. 106,
§
5;
64 Del. Laws, c. 112,
§
17;
67 Del. Laws, c. 376,
§
5;
69 Del. Laws, c. 61,
§
3;
72 Del. Laws, c. 123,
§
3;
77 Del. Laws, c. 253,
§
18;
Notes of Decisions
Sinclair Oil Corporation v. Levien (1971)
del · cites it 3×
“Although the dividends paid exceeded earnings, the plaintiff concedes that the payments were made in compliance with 8 Del.C. § 170, authorizing payment of dividends out of surplus or net .”
Pereira v. Cogan (2001)
nysd · cites it 2×
“Under Delaware General Corporation Law, Sections 170 and 173, (8 Del. C. §§ 170, 173) Trace was permitted to pay dividends “only” out of its “surplus” (as defined in Sections 154 and 244 of the Delaware Code (8 Del.”
LaSalle National Bank v. Perelman (2000)
ded
“Counts I, III and V allege that the dividends violated 8 Del.C. §§ 170, 173 and 174 because the Marvel Holding Companies were insolvent when they paid the dividends.”
Levien v. Sinclair Oil Corporation (1969)
delch · cites it 2×
“§ 170(a) provides in part: “Tlie directors of every corporation, subject to any restrictions contained in its certificate of incorporation, may declare and pay dividends upon the shares of its capital stock either (1) out of its surplus, * * *, or (2) in case there shall be no…”
LaSalle National Bank v. Perelman (2001)
ded
“Counts I, III and V alleged that the dividends violated 8 Del. C. §§ 170, 173 and 174 because the Marvel Holding Companies were insolvent when they paid the dividends.”
Baron v. Allied Artists Pictures Corporation (1975)
delch
“Subsequently, Allied suffered losses which ultimately impaired the capital represented by the preferred stock as a consequence of which the payment of dividends became prohibited by 8 Del.C. § 170. Allied has paid no dividends as to the preferred shares since 1963.”
Atlas Corp. v. Blasius Industries, Inc. (1988)
ded
“” 8 Del.C. § 170(a). Therefore, to determine the amount of available surplus, the board may undertake a revaluation of the corporation’s assets and liabilities to reflect “current fair values.”
In re The Chemours Company Derivative Litigation (2021)
delch · cites it 5×
“§§ 160 and 174 in connection with the 2017 and 2018 Stock Repurchase Programs (Count I); violations of 8 Del. C. §§ 170, 173, and 174 in connection with the dividend payments (Count II); and breaches of fiduciary duty in connection with the stock repurchases and dividend…”
Keith A. Fotta (2016)
delch
“64 By that measure, the surplus was indeed inadequate to absorb 62 8 Del. C. § 170(a)(1)–(2). 63 Folk on the General Corporation Law explains that the General Assembly amended Section 173 in 1985 and, in doing so, indicated that the restrictions provided in Section 170 pertain…”
— 8 Del. C. § 170(a) — 5 cases
Levien v. Sinclair Oil Corporation (1969)
delch
“§ 170(a) provides in part: “Tlie directors of every corporation, subject to any restrictions contained in its certificate of incorporation, may declare and pay dividends upon the shares of its capital stock either (1) out of its surplus, * * *, or (2) in case there shall be no…”
Atlas Corp. v. Blasius Industries, Inc. (1988)
ded
“” 8 Del.C. § 170(a). Therefore, to determine the amount of available surplus, the board may undertake a revaluation of the corporation’s assets and liabilities to reflect “current fair values.”
— 8 Del. C. § 170(a)(1) — 3 cases
Keith A. Fotta (2016)
delch
“64 By that measure, the surplus was indeed inadequate to absorb 62 8 Del. C. § 170(a)(1)–(2). 63 Folk on the General Corporation Law explains that the General Assembly amended Section 173 in 1985 and, in doing so, indicated that the restrictions provided in Section 170 pertain…”
In re The Chemours Company Derivative Litigation (2021)
delch
“§§ 160 and 174 in connection with the 2017 and 2018 Stock Repurchase Programs (Count I); violations of 8 Del. C. §§ 170, 173, and 174 in connection with the dividend payments (Count II); and breaches of fiduciary duty in connection with the stock repurchases and dividend…”
— 8 Del. C. § 170(a)(2) — 1 case
In re The Chemours Company Derivative Litigation (2021)
delch
“§§ 160 and 174 in connection with the 2017 and 2018 Stock Repurchase Programs (Count I); violations of 8 Del. C. §§ 170, 173, and 174 in connection with the dividend payments (Count II); and breaches of fiduciary duty in connection with the stock repurchases and dividend…”
— 8 Del. C. § 170(b) — 1 case
Levien v. Sinclair Oil Corporation (1969)
delch
“§ 170(a) provides in part: “Tlie directors of every corporation, subject to any restrictions contained in its certificate of incorporation, may declare and pay dividends upon the shares of its capital stock either (1) out of its surplus, * * *, or (2) in case there shall be no…”
Annotations are extracted automatically from the opinions in the
Syfert caselaw corpus and ranked by authority, recency, and
treatment. Dots show Syfertize treatment of the citing case itself.