1. (1) The legality of a proposed or completed corporate action described in section 7-113-102 (1) may not be contested, nor may the corporate action be enjoined, set aside, or rescinded, in a legal or equitable proceeding by a shareholder after the shareholders have approved the corporate action.

2. (2) Subsection (1) of this section does not apply to a corporate action that:

   1. (a) Was not authorized and approved in accordance with the applicable provisions of:

      1. (I) Article 109, 110, 111, or 112 of this title 7;
      2. (II) The articles of incorporation or bylaws; or
      3. (III) The resolution of the board of directors authorizing the corporate action;
   2. (b) Was procured as a result of fraud, a material misrepresentation, or an omission of a material fact necessary to make statements made, in light of the circumstances in which they were made, not misleading;
   3. (c) Is an interested transaction, unless it has been recommended by the board of directors in the same manner as is provided in section 7-108-501 and has been approved by the shareholders, in the same manner as is provided in section 7-108-501, as if the interested transaction were a director's conflicting interest transaction; or

   4. (d) Was approved by less than unanimous consent of the voting shareholders pursuant to section 7-107-104 if:

      1. (I) The challenge to the corporate action is brought by a shareholder that did not consent and as to whom notice of the approval of the corporate action was not effective at least ten days before the corporate action was effected; and
      2. (II) The proceeding challenging the corporate action is commenced within ten days after notice of the approval of the corporate action is effective as to the shareholder bringing the proceeding.

Source: L. 2019: Entire article R&RE, (SB 19-086), ch. 166, p. 1960, § 56, effective July 1, 2020.