§ 8846. Liability for improper distributions.

313 words·~1 min read·/pa/title-15/chapter-88/8846

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

(a)General rule.-- Except as provided in subsection (b), if a member of a member-managed limited liability company or manager of a manager-managed limited liability company consents to a distribution made in violation of section 8845 (relating to limitations on distributions) and in consenting to the distribution fails to comply with section 8849.1 (relating to standards of conduct for members) or 8849.2 (relating to standards of conduct for managers), the member or manager is personally liable to the company for the amount of the distribution which exceeds the amount that could have been distributed without the violation of section 8845.

(b)Members without authority.-- To the extent the operating agreement of a member-managed limited liability company relieves a member of the authority and responsibility to consent to distributions and imposes that authority and responsibility on one or more other members, the liability stated in subsection

(a)applies to the other members and not the member that the operating agreement relieves of authority and responsibility.

(c)Recipients.-- A person that receives a distribution knowing that the distribution violated section 8845 is personally liable to the limited liability company but only to the extent that the distribution received by the person exceeded the amount that could have been properly paid under section 8845.

(d)Contribution.-- A person against which an action is commenced because the person is liable under subsection

(a)may:

(1)join any other person that is liable under subsection

(a)or otherwise seek to enforce a right of contribution from the person; and

(2)join any person that is liable under subsection

(c)or otherwise seek to enforce a right of contribution from the person in the amount the person is liable for under subsection (c).

(e)Statute of repose.-- An action under this section is barred unless commenced within two years after the distribution.

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