New York Laws
Article 5 - Corporate Finance
510 - Dividends or Other Distributions in Cash or Property.

(a) A corporation may declare and pay dividends or make other
distributions in cash or its bonds or its property, including the shares
or bonds of other corporations, on its outstanding shares, except when
currently the corporation is insolvent or would thereby be made
insolvent, or when the declaration, payment or distribution would be
contrary to any restrictions contained in the certificate of
incorporation.
(b) Dividends may be declared or paid and other distributions may be
made either (1) out of surplus, so that the net assets of the
corporation remaining after such declaration, payment or distribution
shall at least equal the amount of its stated capital, or (2) in case
there shall be no such surplus, out of its net profits for the fiscal
year in which the dividend is declared and/or the preceding fiscal year.
If the capital of the corporation shall have been diminished by
depreciation in the value of its property or by losses or otherwise to
an amount less than the aggregate amount of the stated capital
represented by the issued and outstanding shares of all classes having a
preference upon the distribution of assets, the directors of such
corporation shall not declare and pay out of such net profits any
dividends upon any shares until the deficiency in the amount of stated
capital represented by the issued and outstanding shares of all classes
having a preference upon the distribution of assets shall have been
repaired. A corporation engaged in the exploitation of natural resources
or other wasting assets, including patents, or formed primarily for the
liquidation of specific assets, may declare and pay dividends or make
other distributions in excess of its surplus, computed after taking due
account of depletion and amortization, to the extent that the cost of
the wasting or specific assets has been recovered by depletion reserves,
amortization or sale, if the net assets remaining after such dividends
or distributions are sufficient to cover the liquidation preferences of
shares having such preferences in involuntary liquidation.