SECTIONS 7420 - California Statutes

CORPORATIONS CODE

SECTION 7420

7420. (a) Any person who with knowledge of facts indicating the
impropriety thereof receives any distribution, including a payment in
redemption of a membership, prohibited by this chapter is liable to
the corporation for the amount so received by the person with
interest thereon at the legal rate on judgments until paid.
(b) Any person who with knowledge of facts indicating the
impropriety thereof receives any distribution, including a payment in
redemption of a membership, prohibited by this chapter is liable to
the corporation for the benefit of the head organization, or of all
of the creditors entitled to institute an action under subdivision
(c), for the amount so received by the person with interest thereon
at the legal rate on judgments until paid, but not exceeding the
obligations of the corporation owed to the head organization at the
time of the violation, or the liabilities of the corporation owed to
nonconsenting creditors at the time of the violation, as the case may
be.
(c) Suit may be brought in the name of the corporation to enforce
the liability (1) to creditors arising under subdivision (b) for a
violation of Section 7411 or 7412 against any or all persons liable
by any one or more creditors of the corporation whose debts or claims
arose prior to the time of the distribution and who have not
consented thereto, whether or not they have reduced their claims to
judgment, or (2) to the head organization arising under subdivision
(b) for a violation of Section 7413 against any or all persons liable
by any head organization which pursuant to the corporation's
articles is entitled to a distribution of assets upon dissolution.
(d) Any person sued under subdivision (b) may implead all other
persons liable under subdivision (b) and may in the absence of fraud
by the moving party compel contribution, either in that action or in
an independent action against persons not joined in that action.
(e) Nothing contained in this section affects any liability which
any person may have under Sections 3439 to 3439.12, inclusive, of the
Civil Code.