16-6a-809. Removal of directors by judicial proceeding

(1) (a) The applicable court may remove a director in a proceeding commenced either by the nonprofit corporation or by holding at least 10% of the votes entitled to be cast 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 set forth 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 office is 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 Lake County.

(2) The court that removes a director may bar the director for a period prescribed by the court from:
      (a) reelection;
      (b) reappointment; or
      (c) designation.

(3) If voting members commence a proceeding under Subsection (1), the voting members shall make the nonprofit corporation a party defendant.

(4) A director who is removed pursuant to this section may deliver to the division for filing a statement to that effect pursuant to Section 16-6a-1608


Amended by Chapters 9 and 127, 2001 General Session.


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