A. In addition to any other liabilities, a director who votes for or assents to any distribution contrary to the provisions of the Business Corporation Act or contrary to any restrictions contained in the articles of incorporation shall, unless the director complies with the standard provided in the Business Corporation Act for the performance of the duties of directors, be liable to the corporation, jointly and severally with all other directors so voting or assenting, for the amount of the dividend which is paid or the value of the distribution in excess of the amount of the distribution which could have been made without a violation of the provisions of the Business Corporation Act or the restrictions in the articles of incorporation.

B. Any director against whom a claim is asserted under this section for the making of a distribution and who shall be held liable thereon, shall be entitled to contribution from the shareholders who accepted or received any such distribution, knowing the distribution to have been made in violation of the Business Corporation Act, in proportion to the amounts received by them.

C. Any director against whom a claim shall be asserted under or pursuant to this section shall be entitled to contribution from any other director who voted for or assented to the action upon which the claim is asserted and who did not comply with the standard provided in the Business Corporation Act for the performance of the duties of directors.

History: 1953 Comp., § 51-24-45, enacted by Laws 1967, ch. 81, § 45; 1975, ch. 64, § 23; 1983, ch. 304, § 40.

Compiler's notes. — This section is derived from Section 48 of the ABA Model Business Corporation Act.

The 1983 amendment, effective June 17, 1983, redesignated former Paragraph (1) of Subsection A as present Subsection A; deleted former Paragraphs (2) and (3) of Subsection A and former Subsections B and C, which concerned the liability of directors of a corporation who vote for the illegal purchase of its own shares or for the illegal distribution of assets during liquidation, presumed assent to actions taken by the board absent express dissent, and presumption of good faith reliance on financial statements; redesignated former Subsections D and E as present Subsections B and C, respectively; near the beginning of Subsection A deleted "imposed by law upon directors of a corporation" following "liabilities" and substituted "a director who votes for or assents to any distribution" for "directors of a corporation who vote for or assent to the declaration of any dividend or other distribution of the assets of a corporation to its shareholders," near the middle of Subsection A inserted "unless the director . . . duties of directors," deleted "jointly and severally" preceding "liable" and inserted "jointly and severally with all other directors so voting or assenting," and near the end of Subsection A substituted "distribution" for "assets which are distributed," deleted "dividend or" preceding "distribution," and substituted "made" for "paid or distributed"; substituted "making of a distribution" for "payment of a dividend or other distribution of assets of a corporation" near the beginning of Subsection B; substituted "distribution, knowing the distribution" for "dividend or assets, knowing the dividend or distribution" near the middle of Subsection B; and inserted "or pursuant to" near the beginning of Subsection C, substituted "any other director" for "the other directors" near the middle of Subsection C, and added "and who did not . . . the duties of directors" at the end of Subsection C.

Forbidden distributions to stockholders defined. — It is clear that forbidden distributions to shareholders out of capital surplus of a corporation of a portion of its assets, in cash or profits, are those distributions to shareholders of corporate property paid to the corporation by the shareholders in excess of the capital stock liability, which would render the corporation insolvent, would deprive preferential shareholders of accrued dividends to which they were entitled, or would reduce the corporation's assets below the amount preferential shareholders could claim in the event of involuntary liquidation. DiIaconi v. New Cal Corp., 1982-NMCA-064, 97 N.M. 782, 643 P.2d 1234.

Law reviews. — For article, "1975 Amendments to the New Mexico Business Corporation Act," see 6 N.M.L. Rev. 57 (1975).

For article, "1983 Amendments to the New Mexico Business Corporation Act and Related Statutes," see 14 N.M.L. Rev. 371 (1984).

Am. Jur. 2d, A.L.R. and C.J.S. references. — 18B Am. Jur. 2d Corporations §§ 1684 to 1896.

Laches as affecting right of corporation or its stockholders to relief against directors for violation of trust, 10 A.L.R. 370.

Liability of directors or officers of corporation for incurring excessive debts, right of individual creditor to enforce, 43 A.L.R. 1147.

Right of creditor of corporation to maintain, action against directors or officers for mismanagement, 50 A.L.R. 462.

Judgment in action by or against corporation as res judicata in action by or against stockholder or officer of corporation, 129 A.L.R. 1041.

Securities Exchange Act provision regarding liability of directors, officers, and principal stockholders for profits on short-swing speculation in corporation's stock, 40 A.L.R.2d 1346, 67 A.L.R. Fed. 849, 86 A.L.R. Fed. 16.

Duty and liability of closely held corporation, its directors, officers, or majority stockholders, in acquiring stock of minority shareholder, 7 A.L.R.3d 500.

Liability of corporate directors or officers for negligence in permitting conversion of property of third persons by corporation, 29 A.L.R.3d 660.

Duty of corporate directors to exercise "informed" judgment in recommending responses to merger or tender offers, 46 A.L.R.4th 887.

Liability of shareholders, directors, and officers where corporate business is continued after its dissolution, 72 A.L.R.4th 419.

Liability of corporate director, officer, or employee for tortious interference with corporation's contract with another, 72 A.L.R.4th 492.

19 C.J.S. Corporations §§ 475 to 553.