35-2-423. Removal of directors by judicial proceeding. (1) The district court for the judicial district of the county where a corporation's principal office is located or, if the principal office is not located in the state, the county where its registered office is located may remove any director of the corporation from office in a proceeding commenced by the corporation, by its members holding at least 10% of the voting power of any class, or by the attorney general in the case of a public benefit corporation, if the court finds that:
     (a) (i) the director engaged in fraudulent or dishonest conduct or in gross abuse of authority or discretion, with respect to the corporation; or
     (ii) a final judgment has been entered finding that the director has violated a duty set forth in 35-2-416, 35-2-418, 35-2-435, or 35-2-436; and
     (b) removal is in the best interest of the corporation.
     (2) The court that removes a director may bar the director from serving on the board for a period prescribed by the court.
     (3) If members or the attorney general commence a proceeding under subsection (1), the corporation must be made a party defendant.
     (4) If a public benefit corporation or its members commence a proceeding under subsection (1), they shall give the attorney general written notice of the proceeding.
     (5) The articles or bylaws of a religious corporation may limit or prohibit the application of this section.

     History: En. Sec. 82, Ch. 411, L. 1991.