NY Rural Elec Coop L § 22 (2021)
2021 New York Laws REL - Rural Electric Cooperative Article 2 - Purpose; Organization and Management; Powers 22 - Liability of Directors in Certain Cases.

§ 22. Liability  of  directors  in  certain  cases. (a) Directors of a cooperative who vote for or concur in any  of  the  following  corporate actions shall be jointly and severally liable to the cooperative for the benefit of its creditors or members or the ultimate beneficiaries of its activities,  to  the  extent  of  any  injury  suffered by such persons, respectively, as a result of such action, or, if there be  no  creditors or members or ultimate beneficiaries so injured, to the cooperative as a result of such action:  (1) the distribution of the cooperative's cash or property to members, directors  or  officers,  other  than  a  distribution  permitted  under sections thirty-five, sixty and sixty-one of this chapter; or  (2) the distribution of assets after dissolution of the cooperative in violation of section thirty-five of this chapter or  without  paying  or adequately providing for all known liabilities of the cooperative.  (b)  A  director  who  is  present  at  a meeting of the board, or any committee thereof, at which action specified in paragraph one or two  of subdivision  (a)  of  this  section  is  taken shall be presumed to have concurred in the action unless the director's dissent thereto  shall  be entered  in  the  minutes  of  the meeting, or unless the director shall submit his or her written dissent to the person acting as the  secretary of  the meeting before the adjournment thereof, or shall deliver or send by registered mail such dissent to  the  secretary  of  the  cooperative promptly  after  the  adjournment  of the meeting. Such right to dissent shall not apply to a director who voted  in  favor  of  such  action.  A director  who  is  absent  from a meeting of the board, or any committee thereof, at which such  action  is  taken  shall  be  presumed  to  have concurred  in  the  action unless he shall deliver or send by registered mail his dissent thereto to the secretary of the  cooperative  or  shall cause  such  dissent  to be filed with the minutes of the proceedings of the board or committee within a reasonable time after learning  of  such action.  (c)  Any  director against whom a claim is successfully asserted under this section shall be entitled to contribution from the other  directors who  voted  for  or  concurred  in  the  action  upon which the claim is asserted.  (d) Directors against whom a claim is successfully asserted under this section shall be entitled, to the extent of the amounts paid by them  to the cooperative as a result of such claims:  (1) Upon reimbursement to the cooperative of any amount of an improper distribution  of the cooperative's cash or property, to be subrogated to the rights of the cooperative against members, directors or officers who received such distribution with knowledge of facts  indicating  that  it was  not  authorized  by  this  chapter,  in  proportion  to the amounts received by them respectively.  (2) Upon payment to the cooperative  of  the  claim  of  the  attorney general  or  of any creditor by reason of a violation of subdivision (a) of this section, to be subrogated  to  the  rights  of  the  cooperative against any person who received an improper distribution of assets.  (e)  (1)  A director or officer shall not be liable under this section if, in the circumstances, the director discharged his or her duty to the cooperative in good faith and with that degree of  diligence,  care  and skill  which  ordinarily  prudent  persons  would exercise under similar circumstances in like positions.  (2) In discharging their duties, directors and officers,  when  acting in  good faith, may rely on information, opinions, reports or statements including financial statements and other financial data,  in  each  case prepared  or presented by:  (i) one or more officers or employees of the cooperative, whom the director believes to be reliable and competent  in  the matters presented, (ii) counsel, public accountants or other persons as  to matters which the directors or officers believe to be within such person's professional or expert competence, or (iii) a committee of  the board upon which they do not serve, duly designated in accordance with a provision  of  the  certificate  of  incorporation  or the bylaws, as to matters within its designated authority, which committee  the  directors or  officers  believe to merit confidence, so long as in so relying they shall be acting in good faith and with that degree of care specified  in subdivision  (a)  of this section. Persons shall not be considered to be acting in good faith if they have knowledge  concerning  the  matter  in question  that would cause such reliance to be unwarranted.  Persons who so perform their duties shall have no liability by reason  of  being  or having been directors or officers of the cooperative.  (f)  This  section shall not affect any liability otherwise imposed by law upon any director or officer.