Maine § 31 §1368 Limitations on distribution

Maine Statutes

§ 31 §1368 — Limitations on distribution

Maine·Title 31 PARTNERSHIPS AND ASSOCIATIONS·Ch. 19 UNIFORM LIMITED PARTNERSHIP ACT

1.In violation of partnership agreement. A limited partnership may not make a distribution in violation of the partnership agreement.

2.Unable to pay debts or satisfy superior preferential rights. A limited partnership may not make a distribution if after the distribution:

3.Basis for determination that distribution not prohibited. A limited partnership may base a determination that a distribution is not prohibited under subsection 2 on financial statements prepared on the basis of accounting practices and principles that are reasonable in the circumstances or on a fair valuation or other method that is reasonable in the circumstances.

4.Measuring effect of distribution. Except as otherwise provided in subsection 7, the effect of a distribution under subsection 2 is measured:

5.Indebt

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1.
In violation of partnership agreement.
A limited partnership may not make a distribution in violation of the partnership agreement.
2.
Unable to pay debts or satisfy superior preferential rights.
A limited partnership may not make a distribution if after the distribution:
3.
Basis for determination that distribution not prohibited.
A limited partnership may base a determination that a distribution is not prohibited under subsection 2 on financial statements prepared on the basis of accounting practices and principles that are reasonable in the circumstances or on a fair valuation or other method that is reasonable in the circumstances.
4.
Measuring effect of distribution.
Except as otherwise provided in subsection 7, the effect of a distribution under subsection 2 is measured:
5.
Indebtedness to partner and general, unsecured creditors.
A limited partnership's indebtedness to a partner incurred by reason of a distribution made in accordance with this section is at parity with the limited partnership's indebtedness to its general, unsecured creditors.
6.
Indebtedness not considered liability.
A limited partnership's indebtedness, including indebtedness issued in connection with or as part of a distribution, is not considered a liability for purposes of subsection 2 if the terms of the indebtedness provide that payment of principal and interest are made only to the extent that a distribution could then be made to partners under this section.
7.
Indebtedness issued as distribution; date payment made.
If indebtedness is issued as a distribution, each payment of principal or interest on the indebtedness is treated as a distribution, the effect of which is measured on the date the payment is made.