§ 7-60-146 — Limitations on distribution from limited liability partnerships

(1)
A limited liability partnership or limited liability limited partnership shall not make a
distribution to a general partner to the extent that, at the time of the distribution,
after giving effect to the distribution, all liabilities of the limited liability partnership
or limited liability limited partnership, other than liabilities to general partners on
account of their partnership interests and liabilities for which the recourse of
creditors is limited to specified property of the partnership, exceed the fair value of
the assets of the partnership; except that the fair value of property that is subject
to a liability for which the recourse of creditors is limited shall be included in the
assets of the partnership only to the extent that the fair value of that property
exceeds that liability. For purposes of this section and sections 7-62-607 and 7-62-608, the term distribution shall not include payments to the extent that the
payments do not exceed amounts equal to or constituting reasonable
compensation for present or past services or reasonable payments made in the
ordinary course of business pursuant to a bona fide retirement plan or other
benefits program.

(2) A general partner in a limited liability partnership or limited liability
limited partnership who receives a distribution in violation of subsection (1) of this
section, and who knew at the time of the distribution that such distribution violated
subsection (1) of this section, shall be liable to the partnership for the amount of the
distribution. A general partner in a limited liability partnership or limited liability
limited partnership who receives a distribution in violation of subsection (1) of this
section, and who did not know at the time of the distribution that the distribution
violated subsection (1) of this section, shall not be liable for the amount of the
distribution. Subject to subsection (3) of this section, this subsection (2) shall not
affect any obligation or liability of a general partner under an agreement or other
applicable law for the amount of a distribution.

(3) Unless otherwise agreed, a partner in a limited liability partnership or
limited liability limited partnership who receives a distribution from the partnership
shall have no liability under this article or other applicable law for the amount of the
distribution after the expiration of three years after the date of the distribution
unless an action to recover the distribution from such partner is commenced prior
to the expiration of the said three-year period and an adjudication of liability
against such partner is made in the said action.

Legislative History

Source: L. 95: Entire section added, p. 784, � 11, effective May 24. L. 2004: Entire section amended, p. 1433, � 101, effective July 1. L. 2006: Entire section amended, p. 849, � 8, effective July 1.