§ 48-58-702. Conflicting interest transaction may be subject of equitable relief or give rise to damages award or sanctions -- Circumstances when conflicting interest transaction may not be subject of equitable relief or give rise to damages award or sanctions.

TN Code § 48-58-702 (2019) (N/A)

Copy with citation

Copy as parenthetical citation

(a) A transaction effected or proposed to be effected by the corporation (or by an entity controlled by the corporation) may not be the subject of equitable relief, or give rise to an award of damages or other sanctions against a director or officer of the corporation, in a proceeding by a member or by or in the right of the corporation, on the ground that the director or officer has an interest respecting the transaction, if it is not a director's or officer's conflicting interest transaction.

(b) A director's or officer's conflicting interest transaction may not be the subject of equitable relief, or give rise to an award of damages or other sanctions against a director or officer of the corporation, in a proceeding by a member or by or in the right of the corporation, on the ground that the director or officer has an interest respecting the transaction, if:

(1) Directors' action respecting the transaction was taken in compliance with § 48-58-703 at any time;

(2) Member's action respecting the transaction was taken in compliance with § 48-58-704 at any time;

(3) The transaction, judged according to the circumstances at the relevant time, is established to have been fair to the corporation; or

(4) Approval of the transaction is obtained from:

(A) The attorney general and reporter; or

(B) A court of record having equity jurisdiction in an action in which the attorney general and reporter is joined as party.

Previous Section

§ 48-58-701. Part definitions.

Next Section

§ 48-58-703. When director's or officer's action respecting conflicting interest transaction is effective -- Required disclosures -- Quorum.