Kentucky Statutes 271B.8-540 – Court-ordered indemnification
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Unless a corporation‘s articles of incorporation provide otherwise, a director of the corporation who is a party to a proceeding may apply for indemnification to the court conducting the proceeding or to another court of competent jurisdiction. On receipt of an application, the court after giving any notice the court considers necessary may order indemnification if it determines:
(1) The director is entitled to mandatory indemnification under KRS § 271B.8-520, in which case the court shall also order the corporation to pay the director’s reasonable expenses incurred to obtain court-ordered indemnification; or
(2) The director is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not he met the standard of conduct set forth in KRS § 271B.8-510 or was adjudged liable as described in subsection (4) of KRS
271B.8-510, but if he was adjudged so liable his indemnification shall be limited to reasonable expenses incurred.
Effective: January 1, 1989
History: Created 1988 Ky. Acts ch. 23, sec. 98, effective January 1, 1989.
(1) The director is entitled to mandatory indemnification under KRS § 271B.8-520, in which case the court shall also order the corporation to pay the director’s reasonable expenses incurred to obtain court-ordered indemnification; or
Terms Used In Kentucky Statutes 271B.8-540
- Articles of incorporation: include amended and restated articles of incorporation and articles of merger. See Kentucky Statutes 271B.1-400
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Corporation: may extend and be applied to any corporation, company, partnership, joint stock company, or association. See Kentucky Statutes 446.010
- Indemnification: In general, a collateral contract or assurance under which one person agrees to secure another person against either anticipated financial losses or potential adverse legal consequences. Source: FDIC
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Proceeding: includes civil suit and criminal, administrative, and investigatory action. See Kentucky Statutes 271B.1-400
(2) The director is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not he met the standard of conduct set forth in KRS § 271B.8-510 or was adjudged liable as described in subsection (4) of KRS
271B.8-510, but if he was adjudged so liable his indemnification shall be limited to reasonable expenses incurred.
Effective: January 1, 1989
History: Created 1988 Ky. Acts ch. 23, sec. 98, effective January 1, 1989.