17-30-505. Liability of protector.

(a) Except as otherwise provided in subsection (b) of this section, the debts, obligations or other liabilities of a statutory foundation, whether arising in contract, tort or otherwise:

(i) Are solely the debts, obligations or other liabilities of the foundation; and

(ii) Do not become the debts, obligations or other liabilities of a protector solely by reason of the protector performing his duties.

(b) A court may impose liability for the debts, obligations or other liabilities of the statutory foundation on a protector in the following circumstances, except that no single factor other than fraud is sufficient to impose liability:

(i) Fraud;

(ii) Inadequate capitalization;

(iii) Failure to observe foundation formalities as required by law;

(iv) Intermingling of assets, business operations and finances of the foundation and the protector to such an extent that there is no distinction between them.

(c) A court shall not consider factors intrinsic to the character and operation of a statutory foundation under subsection (b) of this section. These factors shall include:

(i) The ability to elect treatment as a disregarded or pass-through entity for tax purposes;

(ii) Flexible operation or organization, including the failure to observe any particular formality relating to the exercise of the powers of the foundation or management of activities;

(iii) The exercise of ownership, influence and governance by a protector;

(iv) The protection of the personal assets of the protector from the obligations and acts of the foundation.