48-18-109 - Removal of directors by judicial proceeding. - Tennessee Statutes

48-18-109. Removal of directors by judicial proceeding.

(a)  Any court of record having equity jurisdiction in the county where a corporation's principal office (or, if none in this state, its registered office) is located may remove a director of the corporation from office in a proceeding commenced either by the corporation or by its shareholders holding at least ten percent (10%) of the outstanding shares of any class if the court finds that:

     (1)  The director engaged in fraudulent or dishonest conduct, or gross abuse of authority or discretion, with respect to the corporation; and

     (2)  Removal is in the best interest of the corporation.

(b)  The court that removes a director may bar the director from reelection for a period prescribed by the court.

(c)  If shareholders commence a proceeding under subsection (a), they shall make the corporation a party defendant.

[Acts 1986, ch. 887, § 8.09.]