Code text and O.C.G.A. statutory annotations on this page reflect the 2019 Official Code of Georgia Annotated (Public.Resource.Org Release 73, 2019-08-21; public domain per Georgia v. Public.Resource.Org, 2020). The Syfert case-law annotations in Notes of Decisions, below, are current.
(a) A director who votes for or assents to a distribution made in violation of Code Section 14-2-640 or the articles of incorporation is personally liable to the corporation for the amount of the distribution that exceeds what could have been distributed without violating Code Section 14-2-640 or the articles of incorporation if it is established that he did not perform his duties in compliance with Code Section 14-2-830. In any proceeding commenced under this Code section, a director has all of the defenses ordinarily available to a director. (b) A director held liable under subsection (a) of this Code section for an unlawful distribution is entitled to contribution: (1) From every other director who could be held liable under subsection (a) of this Code section for the unlawful distribution; and (2) From each shareholder for the amount the shareholder accepted knowing the distribution was made in violation of Code Section 14-2-640 or the articles of incorporation. (c) A proceeding under this Code section is barred unless it is commenced within two years after the date on which the effect of the distribution was measured under subsection (e) or (g) of Code Section
Notes of Decisions
Cited in 4
cases (1 in the last 5 years), 1991–2021 · leading case: Hickman v. Hyzer, 401 S.E.2d 738 (Ga. 1991).
Hickman v. Hyzer, 401 S.E.2d 738 (Ga. 1991). · cites it 2דWe do not reach the issue of whether Hickman made any “preferential distributions” because the Hyzers have not sought the disgorgement of improper distributions.”
Crumpton v. Stephens (In re Northlake Foods, Inc.), 483 B.R. 247 (M.D. Fla. 2012). “§ 14-2-640, who in turn may seek contribution from the sources specified in O.C.G.A. § 14-2-832(b). In this case, it appears that the two-year statute of limitation for an action by [Appellant] against the directors has expired.”
William R. Deal v. Tugalo Gas Co., Inc., 991 F.3d 1313 (11th Cir. 2021). “O.C.G.A. § 14-2-832(a). The problem here is that Deal can’t point with specificity to any adequately pleaded allegations in his complaint that Tugalo board members assented to any so-called “de facto distributions.”
State Ex Rel. Comm'r Ins. v. Custard, 2010 NCBC 6 (N.C. Bus. Ct. 2010). · cites it 2דBefore 14 Section 14-2-832 of the Georgia Business Corporation Code takes up liability for unlawful distributions and was formerly found in section 14-2-154.”
— 14-2-832(a) — 1 case
William R. Deal v. Tugalo Gas Co., Inc., 991 F.3d 1313 (11th Cir. 2021). “O.C.G.A. § 14-2-832(a). The problem here is that Deal can’t point with specificity to any adequately pleaded allegations in his complaint that Tugalo board members assented to any so-called “de facto distributions.”
— 14-2-832(b) — 1 case
Crumpton v. Stephens (In re Northlake Foods, Inc.), 483 B.R. 247 (M.D. Fla. 2012). “§ 14-2-640, who in turn may seek contribution from the sources specified in O.C.G.A. § 14-2-832(b). In this case, it appears that the two-year statute of limitation for an action by [Appellant] against the directors has expired.”
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