Revised Code of Washington

Wash. Rev. Code § 23B.08.310 (2026)

Liability for unlawful distributions

✓ current as of May 2026

Find cases: SyfertCases citing this section WA-LEGapp.leg.wa.gov JustiaTitle on Justia CornellLII Search CasesGoogle Scholar

(1) A director who votes for or assents to a distribution made in violation of RCW 23B.06.400 or the articles of incorporation is personally liable to the corporation for the amount of the distribution that exceeds the amount that could have been distributed without violating RCW 23B.06.400 or the articles of incorporation if it is established that the director did not perform the director's duties in compliance with RCW 23B.08.300. In any proceeding commenced under this section, a director has all of the defenses ordinarily available to a director.

(2) A director held liable under subsection (1) of this section for an unlawful distribution is entitled to contribution:

(a) From every other director who could be held liable under subsection (1) of this section for the unlawful distribution; and

(b) From each shareholder for the amount the shareholder accepted knowing the distribution was made in violation of RCW 23B.06.400 or the articles of incorporation.

(3) A shareholder who accepts a distribution made in violation of RCW 23B.06.400 or the articles of incorporation is personally liable to the corporation for the amount of any distribution received by the shareholder to the extent it exceeds the amount that could have been distributed to the shareholder without violating RCW 23B.06.400 or the articles of incorporation, if it is established that the shareholder accepted the distribution knowing that it was made in violation of RCW 23B.06.400 or the articles of incorporation.

(4) A shareholder held liable under subsection (3) of this section for an unlawful distribution is entitled to contribution from every other shareholder who could be held liable under subsection (3) of this section for the unlawful distribution.

(5) A proceeding under this section is barred unless it is commenced prior to the earlier of (a) the expiration of two years after the date on which the effect of the distribution was measured under *RCW 23B.06.400(4), or (b) the expiration of the survival period specified in RCW 23B.14.340.

[ 2006 c 52 s 3; 1989 c 165 s 98.]

Notes:

*Reviser's note: RCW 23B.06.400 was amended by 2022 c 42 s 103, changing subsection (4) to subsection (5).

Notes of Decisions

Cited in 4 cases, 2003–2013 · leading case: Grassmueck v. Barnett, 281 F. Supp. 2d 1227 (W.D. Wash. 2003).

Sort: Relevance Newest Treatment

Grassmueck v. Barnett, 281 F. Supp. 2d 1227 (W.D. Wash. 2003). “Washington In Washington, plaintiffs may bring a general claim of breach of fiduciary duty against directors as long they show that the directors' acts or omissions involved (1) "intentional misconduct," (2) "a knowing violation of law," (3) "conduct violating RCW 23B.08.310"…”

Donlin v. Murphy, 300 P.3d 424 (Wash. Ct. App. 2013). “070 (holder of an unpaid claim against a dissolved corporation may “petition to compel the dissolved corporation to collect any amounts owing to it” by any shareholder liable for accepting an unlawful distribution under RCW 23B.08.310); see also Senate Journal, supra, at 3095…”

Metro. Mortg. & Sec. Co. v. Quinn (In re Metro. Mortg. & Sec. Co.), 347 B.R. 406 (Bankr. E.D. Wash. 2006). · cites it 8× “Does an Implied Cause of Action Exist in Favor of the Debtor Plaintiff Against These Defendants? RCW 23B.08.310 provides the debt- or plaintiff with an express cause of action and a remedy against its directors who assent to and effectuate unlawful distributions.”

John L. Donlin v. Jerry Murphy (Wash. Ct. App. 2013). “070 (holder of an unpaid claim against a dissolved corporation may "petition to compel the dissolved corporation to collect any -12- 67823-0-1/13 amounts owing to it" by any shareholder liable for accepting an unlawful distribution under RCW 23B.08.310); see also Senate Journal,…”

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.