Printable Format17-7101. Actions against officers, directors or stockholders for debts of corporation; unsatisfied judgment against corporation. (a) When the officers, directors or stockholders of any corporation shall be liable by the provisions of this code to pay the debts of the corporation, or any part thereof, any person to whom they are liable may have an action against any one or more of them. The petition in any such action shall state the claim against the corporation and the ground on which the plaintiff expects to charge the defendants personally.
(b) No suit shall be brought against any officer, director or stockholder for any debt of a corporation of which such person is an officer, director or stockholder, until judgment be obtained therefor against the corporation and execution thereon returned unsatisfied.
History: L. 1972, ch. 52, § 120; L. 1973, ch. 100, § 15; L. 2016, ch. 110, § 104; July 1.
Source or Prior Law:
17-4007, 17-4009; 8 Del. C. § 325.
Cross References to Related Sections:
See Cross References to Related Sections under article heading.
Law Review and Bar Journal References:
"The Kansas Corporation Code of 1972," William E. Treadway, 40 J.B.A.K. 301, 304, 347 (1971).
"Personal Liability of Nonprofit Directors," Charles Engel, 60 J.K.B.A. No. 4, 28, 32 (1991).
CASE ANNOTATIONS
1. Cited; trial court erred in dismissing action controlled by prior law against defendants individually named. Meehan v. Adams Enterprises, Inc., 211 Kan. 353, 356, 507 P.2d 849 (1973).
2. Applied; question of culpable negligence one of fact; denial of summary judgment proper. Mead v. Meeker, 3 Kan. App. 2d 15, 16, 587 P.2d 1276 (1978); Reversed: Speer v. Dighton Grain, Inc., 229 Kan. 272, 624 P.2d 952 (1981).
3. Action against corporate officers not barred by previous action against corporation. Wells v. Davis, 226 Kan. 586, 587, 588, 603 P.2d 180 (1979).
4. Creditor of insolvent corporation cannot maintain personal action on own behalf against directors or officers who breach duty by negligent mismanagement. Speer v. Dighton Grain, Inc., 229 Kan. 272, 280, 286, 287, 624 P.2d 952 (1981).
5. Plaintiff not required to pursue remedy against insolvent corporation before suing former directors. Burge v. Frey, 545 F. Supp. 1160, 1168, 1169 (1982).
6. Creditor of dissolved corporation permitted to seek assets in stockholder's hands only after judgment and unsatisfied execution against corporation. Carson v. Davidson, 248 Kan. 543, 549, 808 P.2d 1377 (1991).
7. Cited; Kansas law bars actions against corporate officers without first obtaining judgment against corporation. Blair-Naughton L.L.C. v. Diner Concepts, Inc., 568 F. Supp. 2d 1249, 1258, 1260 (2008).