16-6a-809 - Removal of directors by judicial proceeding.
16-6a-809. Removal of directors by judicial proceeding.
(1) (a) The applicable court may remove a director in a proceeding commenced either bythe nonprofit corporation or by voting members holding at least 10% of the votes entitled to becast in the election of the director's successor if the court finds that:
(i) the director engaged in:
(A) fraudulent or dishonest conduct; or
(B) gross abuse of authority or discretion with respect to the nonprofit corporation; or
(ii) (A) a final judgment has been entered finding that the director has violated a duty setforth in Section 16-6a-822; and
(B) removal is in the best interests of the nonprofit corporation.
(b) For purposes of this Subsection (1), the applicable court is the:
(i) district court of the county in this state where a nonprofit corporation's principal officeis located; or
(ii) if the nonprofit corporation has no principal office in this state:
(A) the district court of the county in which its registered office is located; or
(B) if the nonprofit corporation has no registered office, the district court for Salt LakeCounty.
(2) The court that removes a director may bar the director for a period prescribed by thecourt from:
(a) reelection;
(b) reappointment; or
(c) designation.
(3) If voting members commence a proceeding under Subsection (1), the voting membersshall make the nonprofit corporation a party defendant.
(4) A director who is removed pursuant to this section may deliver to the division forfiling a statement to that effect pursuant to Section 16-6a-1608.
Amended by Chapter 9, 2001 General Session
Amended by Chapter 127, 2001 General Session