{"id":3741,"date":"2022-05-14T12:34:32","date_gmt":"2022-05-14T12:34:32","guid":{"rendered":"https:\/\/crowdsourcelawyers.com\/california-statutes\/?page_id=3741"},"modified":"2022-05-20T23:46:24","modified_gmt":"2022-05-20T23:46:24","slug":"corporations-code-corp-5237","status":"publish","type":"page","link":"https:\/\/crowdsourcelawyers.com\/california-statutes\/california-statutes\/corporations-code-corp-5237\/","title":{"rendered":"Corporations Code &#8211; CORP 5237"},"content":{"rendered":"\n<style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-l35unm2w-260bc95bb19a14d0bcbceec34d9ce58c\">\n#top .av-special-heading.av-l35unm2w-260bc95bb19a14d0bcbceec34d9ce58c{\npadding-bottom:10px;\n}\nbody .av-special-heading.av-l35unm2w-260bc95bb19a14d0bcbceec34d9ce58c .av-special-heading-tag .heading-char{\nfont-size:25px;\n}\n.av-special-heading.av-l35unm2w-260bc95bb19a14d0bcbceec34d9ce58c .av-subheading{\nfont-size:22px;\n}\n<\/style>\n<div  class='av-special-heading av-l35unm2w-260bc95bb19a14d0bcbceec34d9ce58c av-special-heading-h1 blockquote modern-quote  avia-builder-el-0  el_before_av_hr  avia-builder-el-first '><div class='av-subheading av-subheading_above'><p>California<\/p>\n<\/div><h1 class='av-special-heading-tag '  itemprop=\"headline\"  >Corporations Code &#8211; CORP \u00a7 5237<\/h1><div class=\"special-heading-border\"><div class=\"special-heading-inner-border\"><\/div><\/div><\/div>\n\n<style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-av_hr-3a876428eececa9d35452247ddb053af\">\n#top .hr.hr-invisible.av-av_hr-3a876428eececa9d35452247ddb053af{\nheight:50px;\n}\n<\/style>\n<div  class='hr av-av_hr-3a876428eececa9d35452247ddb053af hr-invisible  avia-builder-el-1  el_after_av_heading  el_before_av_textblock '><span class='hr-inner '><span class=\"hr-inner-style\"><\/span><\/span><\/div>\n<section  class='av_textblock_section av-av_textblock-e878f05c31dff72941bf1e49a00d9ff5 '   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.avia_search_element.av-avia_sc_search-4ee94ae86cde3b232e718bb4ac84e6ad #searchsubmit{\nbackground-color:#edae44;\n}\n#top .avia_search_element.av-avia_sc_search-4ee94ae86cde3b232e718bb4ac84e6ad .av_searchsubmit_wrapper{\nbackground-color:#edae44;\n}\n<\/style>\n<div  class='avia_search_element av-avia_sc_search-4ee94ae86cde3b232e718bb4ac84e6ad  avia-builder-el-3  el_after_av_textblock  el_before_av_hr '><search><form action='https:\/\/crowdsourcelawyers.com\/california-statutes\/' id='searchform_element' method='get' class='' data-element_id='av-avia_sc_search-4ee94ae86cde3b232e718bb4ac84e6ad' ><div class='av_searchform_wrapper'><input type='search' value='' id='s' name='s' placeholder='Search CA statutes' aria-label='Search CA statutes' class='av-input-field ' required \/><div class='av_searchsubmit_wrapper '><input type='submit' value='Find' id='searchsubmit' class='button ' title='View results on search page' aria-label='View results on search page' \/><\/div><input type='hidden' name='numberposts' value='10' \/><input type='hidden' name='results_hide_fields' value='' \/><\/div><\/form><\/search><\/div>\n\n<style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-av_hr-3a876428eececa9d35452247ddb053af\">\n#top .hr.hr-invisible.av-av_hr-3a876428eececa9d35452247ddb053af{\nheight:50px;\n}\n<\/style>\n<div  class='hr av-av_hr-3a876428eececa9d35452247ddb053af hr-invisible  avia-builder-el-4  el_after_avia_sc_search  el_before_av_textblock '><span class='hr-inner '><span class=\"hr-inner-style\"><\/span><\/span><\/div>\n<section  class='av_textblock_section av-l35uotbf-a3c7b6bf490a509f443165b6a10bb93e '   itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_textblock'  itemprop=\"text\" ><div class=\"row\">\n<div class=\"subsection\"><\/div>\n<div class=\"subsection\">\n<div class=\"subsection\">\n<p>(a)\u2002Subject to the provisions of\u00a0<span class=\"cite\">Section 5231\u00a0<\/span>, directors of a corporation who approve any of the following corporate actions shall be jointly and severally liable to the corporation for:<\/p>\n<div class=\"subsection\">\n<p style=\"padding-left: 40px\">(1)\u2002The making of any distribution.<\/p>\n<\/div>\n<div class=\"subsection\">\n<p style=\"padding-left: 40px\">(2)\u2002The distribution of assets after institution of dissolution proceedings of the corporation, without paying or adequately providing for all known liabilities of the corporation, excluding any claims not filed by creditors within the time limit set by the court in a notice given to creditors under Chapters 15 (commencing with\u00a0<span class=\"cite\">Section 6510\u00a0<\/span>), 16 (commencing with\u00a0<span class=\"cite\">Section 6610\u00a0<\/span>) and 17 (commencing with\u00a0<span class=\"cite\">Section 6710\u00a0<\/span>).<\/p>\n<\/div>\n<div class=\"subsection\">\n<p style=\"padding-left: 40px\">(3)\u2002The making of any loan or guaranty contrary to\u00a0<span class=\"cite\">Section 5236\u00a0<\/span>.<\/p>\n<\/div>\n<\/div>\n<div class=\"subsection\">\n<p>(b)\u2002A director who is present at a meeting of the board, or any committee thereof, at which action specified in subdivision (a) is taken and who abstains from voting shall be considered to have approved the action.<\/p>\n<\/div>\n<div class=\"subsection\">\n<p>(c)\u2002Suit may be brought in the name of the corporation to enforce the liability:<\/p>\n<div class=\"subsection\">\n<p style=\"padding-left: 40px\">(1)\u2002Under paragraph (1) of subdivision (a) against any or all directors liable by the persons entitled to sue under\u00a0<span class=\"cite\">subdivision (b) of Section 5420\u00a0<\/span>;<\/p>\n<\/div>\n<div class=\"subsection\">\n<p style=\"padding-left: 40px\">(2)\u2002Under paragraph (2) or (3) of subdivision (a) against any or all directors liable by any one or more creditors of the corporation whose debts or claims arose prior to the time of the corporate action who have not consented to the corporate action, whether or not they have reduced their claims to judgment;<\/p>\n<\/div>\n<div class=\"subsection\">\n<p style=\"padding-left: 40px\">(3)\u2002Under paragraph (1), (2) or (3) of subdivision (a), by the Attorney General.<\/p>\n<\/div>\n<\/div>\n<div class=\"subsection\">\n<p>(d)\u2002The damages recoverable from a director under this section shall be the amount of the illegal distribution,\u00a0<span class=\"added-material\">or if the illegal distribution consists of property, the fair market value of that property at the time of the illegal distribution, plus interest thereon from the date of the distribution at the legal rate on judgments until paid, together with all reasonably incurred costs of appraisal or other valuation, if any, of that property,<\/span>\u00a0or the loss suffered by the corporation as a result of the illegal loan or guaranty.<\/p>\n<\/div>\n<div class=\"subsection\">\n<p>(e)\u2002Any director sued under this section may implead all other directors liable and may compel contribution, either in that action or in an independent action against directors not joined in that action.<\/p>\n<\/div>\n<div class=\"subsection\">\n<p>(f)\u2002Directors liable under this section shall also be entitled to be subrogated to the rights of the corporation:<\/p>\n<div class=\"subsection\">\n<p style=\"padding-left: 40px\">(1)\u2002With respect to paragraph (1) of subdivision (a), against the persons who received the distribution.<\/p>\n<\/div>\n<div class=\"subsection\">\n<p style=\"padding-left: 40px\">(2)\u2002With respect to paragraph (2) of subdivision (a), against the persons who received the distribution.<\/p>\n<\/div>\n<div class=\"subsection\">\n<p style=\"padding-left: 40px\">(3)\u2002With respect to paragraph (3) of subdivision (a), against the person who received the loan or guaranty.<\/p>\n<p style=\"padding-left: 40px\">Any director sued under this section may file a cross-complaint against the person or persons who are liable to\u00a0<span class=\"added-material\">the<\/span>\u00a0director as a result of the subrogation provided for in this subdivision or may proceed against them in an independent action.<\/p>\n<\/div>\n<\/div>\n<p><br class=\"avia-permanent-lb\" \/><br class=\"avia-permanent-lb\" \/><\/p>\n<\/div>\n<\/div>\n<hr \/>\n<p><a href=\"https:\/\/crowdsourcelawyers.com\/\">CrowdSourceLawyers.com<\/a><\/p>\n<\/div><\/section>\n","protected":false},"excerpt":{"rendered":"","protected":false},"author":9,"featured_media":0,"parent":2019,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":""},"class_list":["post-3741","page","type-page","status-publish","hentry"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Corporations Code - CORP 5237 - California Statutes<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, 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