§2350. Indemnification of trustees, officers, employees, and agents of a special charitable trust; insurance

            A.(1) A special charitable trust may indemnify a party to any action or proceeding, including any action by the special charitable trust, and as set forth in R.S. 9:2191 and 2196, in either of the following circumstances:

            (a) The party is a past or present trustee, officer, employee, or agent of the special charitable trust.

            (b) The party is or was serving, at the request of the special charitable trust, as a trustee, officer, employee, or agent of another nonprofit, business or foreign special charitable trust, partnership, joint venture, or other enterprise.

            (2) The trustee, officer, employee, or agent shall be entitled to indemnification of each of the following:

            (a) Expenses, reasonable attorney fees, settlements and judgments, and fines.

            (b) The amounts provided in this Paragraph shall be reasonably incurred in connection with the action or proceeding.

            (c) The provisions of this Paragraph shall apply only if the party both:

            (i) Acted in good faith and exercised reasonable care and skill in a manner that the party reasonably believed to be in the best interest of the special charitable trust.

            (ii) Had reasonable cause to believe that his conduct was lawful.

            (3) In a criminal action or proceeding by the special charitable trust or its trustees, the indemnification shall be limited to expenses, attorney fees, settlements and judgments, and the estimated cost of the litigation and shall be reasonably incurred in connection with the defense of the action.

            (4) The trustee shall not be entitled to indemnification if found by a court of competent jurisdiction to be liable for negligence or willful misconduct in the performance of his duty to the special charitable trust. The court may find based upon the facts and circumstances that, notwithstanding the adjudication of liability, the trustee shall be entitled to indemnification for reasonable expenses as determined by the court.

            (5) A settlement or judgment, order, conviction, or plea of nolo contendere shall not create a presumption that the person acted in bad faith and not in the best interest of the special charitable trust, or, in a criminal action, had reasonable cause to believe that his conduct was unlawful.

            B. A trustee, officer, employee, or agent of a special charitable trust who has prevailed in any action or proceeding or in defense of any claim shall be entitled to indemnification of actual expenses and reasonable attorney fees which the person incurred.

            C. Indemnification pursuant to Subsection A of this Section, unless ordered by the court, shall be made by the special charitable trust only as authorized and upon a determination that the person meets the applicable standard. The determination shall be made by a majority vote of a quorum consisting of trustees who were not parties to the action or proceeding, or by independent legal counsel, if a quorum of trustees is not obtainable or if directed by a quorum of disinterested trustees.

            D. Expenses incurred in defense of an action or proceeding may be paid by the special charitable trust in advance of the final disposition if authorized by the trustees in the manner provided in Subsection C of this Section, upon receipt of an undertaking by or on behalf of the trustee, officer, employee, or agent to repay such amount unless determined that the person is entitled to indemnification by the special charitable trust as authorized in this Section.

            E. The indemnification provided by this Section shall not be deemed exclusive of any rights the person otherwise may be entitled by law, agreement, by-laws, or authorization of disinterested trustees, both, acting in his official capacity or in another capacity while holding office. The indemnification shall continue to a person who is no longer a trustee, officer, employee, or agent and shall inure to the benefit of his heirs and legal representative.

            F. A special charitable trust may procure liability insurance on behalf of a past or present trustee, officer, employee, or agent of the special charitable trust, or a person who is or was serving at the request of a special charitable trust as a trustee, officer, employee, or agent of another nonprofit, business or foreign corporation, partnership, joint venture, or other enterprise, acting in a prudent manner in the performance of his duties, notwithstanding the indemnification provided by a special charitable trust authorized under the provisions of this Chapter.

            Acts 2024, No. 274, §1, eff. May 23, 2024.