§ 121-607 — Limitations on distribution

§ 121-607. Limitations on distribution. (a) A limited partnership\nshall not make a distribution to a partner to the extent that, at the\ntime of the distribution, after giving effect to the distribution, all\nliabilities of the limited partnership, other than liabilities to\npartners on account of their partnership interests and liabilities for\nwhich recourse of creditors is limited to specified property of the\nlimited partnership, exceed the fair market value of the assets of the\nlimited partnership, except that the fair market value of property that\nis subject to a liability for which the recourse of creditors is limited\nshall be included in the assets of the limited partnership only to the\nextent that the fair value of that property exceeds that liability.\n (b) A limited partner who receives a distribution in violation of\nsubdivision (a) of this section, and who knew at the time of the\ndistribution that the distribution violated subdivision (a) of this\nsection, shall be liable to the limited partnership for the amount of\nthe distribution. A limited partner who receives a distribution in\nviolation of subdivision (a) of this section, and who did not know at\nthe time of the distribution that the distribution violated subdivision\n(a) of this section, shall not be liable for the amount of the\ndistribution. Subject to subdivision (c) of this section, this\nsubdivision shall not affect any obligation or liability of a limited\npartner under a partnership agreement or other applicable law for the\namount of a distribution.\n (c) Unless otherwise agreed, a limited partner who receives a wrongful\ndistribution from a limited partnership shall have no liability under\nthis article or other applicable law for the amount of the distribution\nafter the expiration of three years from the date of the distribution.\n