Title 10 - Corporations and Associations

Chapter 31, Directors and Officers - Nonprofit Corporations , Sec. 10-3801-10-3864

Judicial action

Article 6, Director's Conflicting Interest Transactions, § 10-3861

Source: Arizona Revised Statutes

  1. A transaction that is effected or proposed to be effected by a corporation, or by a subsidiary of the corporation or any other entity in which the corporation has a controlling interest, and that is not a director’s conflicting interest transaction shall not be enjoined, be set aside or give rise to an award of damages or other sanctions in a proceeding by a member or by or in the right of the corporation, because a director of the corporation, or any person with whom or with which the director has a personal, economic or other association, has an interest in the transaction.
  2. A director’s conflicting interest transaction shall not be enjoined, be set aside or give rise to an award of damages or other sanctions in a proceeding by a member by or in the right of the corporation, because the director, or any person with whom or with which the director has a personal, economic or other association, has an interest in the transaction, if either:
    1. Directors’ action respecting the transaction was taken at any time in compliance with section 10-3862.
    2. Members’ action respecting the transaction was taken at any time in compliance with section 10-3863.
    3. The transaction, judged according to the circumstances at the time of commitment, is established to have been fair to the corporation.
  3. Any person seeking to have a director’s conflicting interest transaction enjoined, set aside or give rise to an award of damages or other sanctions shall first prove by clear and convincing evidence that subsection B of this section is not applicable.

Also in: Chapter 31, Sec. 10-3801-10-3864

View all Nonprofit Corporation Act statutes.

Source: This content is sourced from the online version of the Arizona Revised Statutes located at www.azleg.gov.

Disclaimer: These statutes are provided as a courtesy by CHDB Law LLP. CHDB Law cannot guarantee that the statutes set forth on the website or in our published guide will not be found to be defective by a court or other tribunal after the date the books or online material are published. The HOA Knowledge Base does not attempt to include every statute that could apply to a community association issue. There may be other statutes or applicable laws that have a bearing on a particular legal issue confronted by a community association. These statutes are provided as a reference only. If a particular legal issue is confronted by a community association, the association should seek legal advice from competent attorneys.

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