Minnesota Statutes

Minn. Stat. § 302A.557 (2026)

Liability Of Shareholders For Illegal Distributions

✓ current as of May 2026

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Subdivision 1.Liability.

A shareholder who receives a distribution made in violation of the provisions of section 302A.551 is liable to the corporation, its receiver or other person winding up its affairs, or a director under section 302A.559, subdivision 2, but only to the extent that the distribution received by the shareholder exceeded the amount that properly could have been paid under section 302A.551.

Subd. 2.Statute of limitations.

An action shall not be commenced under this section more than two years from the date of the distribution.

Notes of Decisions

Cited in 6 cases (1 in the last 5 years), 1999–2023 · leading case: Wessin v. Archives Corp., 592 N.W.2d 460 (Minn. 1999).

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Wessin v. Archives Corp., 592 N.W.2d 460 (Minn. 1999). · cites it 2× “Furthermore, Minn.Stat. § 302A.557, subd. 1 (1998) states that, “[a] shareholder who receives a distribution made in violation of the provisions of section 302A.”

Buckrey v. Comm'r, 2017 T.C. Memo. 138 (Tax Ct. 2017). · cites it 2× “The Commissioner has no greater rights than such a creditor.”

Joseph P. McGraw v. Comm'r of Internal Revenue, 384 F.3d 965 (8th Cir. 2004). “” Minn.Stat. § 302A.557, subd. 1. To resolve this conundrum, Minnesota commentators have relied on the Reporter’s Notes to conclude that § 302A.”

EEP Workers' Comp. Fund v. Fun & Sun, Inc., 794 N.W.2d 126 (Minn. Ct. App. 2011). · cites it 2× “In March 2010, the district court granted Hanish’s motion to dismiss claims against her on the ground that EEP lacked standing to bring suit against her personally under Minn.Stat. §§ 302A.557, .559 (2008). The district court also denied EEP’s motion to amend its complaint to…”

BMO Harris Bank N.A. v. Kuskie (D. Minnesota 2023). · cites it 5× “If, however, this requirement is not met and a distribution is improper, Section 302A.557 is the sole basis under Minnesota law for shareholders to be liable for improper distributions, and that section only allows the corporation or its receiver to recover, not a creditor.”

Joseph P. McGraw v. CIR (8th Cir. 2004). “" Minn. Stat. § 302A.557, subd. 1. To resolve this conundrum, Minnesota commentators have relied on the Reporter's Notes to conclude that § 302A.”

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