§ 53-19-27 — Liability upon wrongful distribution

A. In addition to any other liabilities, a member or manager who votes for, approves or consents to any distribution that violates any provision of the articles of organization, an operating agreement or Section 26 [53-19-26 NMSA 1978] of the Limited Liability Company Act shall be liable to the limited liability company, jointly but not severally, with all other members or managers so voting, approving or consenting for the amount of the distribution that exceeds what could have been distributed without violating Section 26 of that act, the articles of organization or an operating agreement, unless the member or manager based his determination that the distribution did not violate such provisions on the statements or other valuation method authorized by Subsection B of Section 26 of that act and had no actual knowledge that rendered his reliance on such statements, valuation or method unwarranted. B. Each member or manager who is liable pursuant to Subsection A of this section is entitled to contribution: (1) from each other member or manager who is liable under Subsection A of this section; and (2) from each member for the amount the member received knowing that the distribution was made in violation of a provision of the articles of organization, an operating agreement or Section 26 of the Limited Liability Company Act.

Legislative History

Laws 1993, ch. 280, § 27.