CHAPTER 130 - RELATING TO CORPORATIONS WITH RESPECT TO THE LIABILITY OF DIRECTORS FOR THE ILLEGAL PAYMENT OF DIVIDENDS

AN ACT TO AMEND 2067, SECTION 35, OF CHAPTER 65 OF THE REVISED CODE OF DELAWARE OF 1935 RELATING TO CORPORATIONS WITH RESPECT TO THE LIABILITY OF DIRECTORS FOR THE ILLEGAL PAYMENT OF DIVIDENDS.

Be it enacted by the Senate and House of Representatives of the State of Delaware, in General Assembly met (two-thirds of all members elected to each branch thereof concurring therein):

Section 1. That 2067, Section 35 of Chapter 65 of the Revised Code of Delaware of 1935, be and the same is hereby amended by striking out said Section and inserting in lieu thereof the following:

2067. Sec. 35. Dividends; How Declared and Paid; Violations of Section; Penalty; Exoneration from Liability:--No corporation created under the provisions of this Chapter, nor the Directors thereof, shall pay dividends upon any shares of the corporation except in accordance with the provisions of this Chapter. Dividends may be paid in cash, in property, or in shares of the capital stock, in the case of shares with par value at par, and in the case of shares without par value at such price as may be fixed by the Board of Directors. In case of any willful or negligent violation of the provisions of this Section, the Directors under whose administration the same may happen shall be jointly and severally liable, at any time within six years after paying such unlawful dividend, to the corporation and to its creditors, in the event of its dissolution or insolvency, to the full amount of the dividend so unlawfully paid, with interest on the same from the time such liability accrued; provided that any Director who may have been absent when the same was done, or who may have dissented from the act or resolution by which the same was done, may exonerate himself from such liability by causing his dissent to be entered at large on the books containing the minutes of the proceedings of the Directors at the time the same was done, or forthwith after he shall have notice of the same, or by causing a true copy of such dissent to be published, within two weeks after the same shall have been so entered, in a newspaper published in the County where the corporation has its principal office.

Approved April 13, 1937.