347.109. Limitations upon distributions--date of measurement of effective distributions--wrongful distribution, liability, contribution.

MISSOURI STATUTES AND CODES

347.109. Limitations upon distributions--date of measurement of effective distributions--wrongful distribution, liability, contribution.

Limitations upon distributions--date of measurement of effectivedistributions--wrongful distribution, liability, contribution.

347.109. 1. A limited liability company shall not make anydistribution to one or more members with respect to their interests in thelimited liability company, and no member shall be entitled to receive anysuch distribution, to the extent that, after giving effect to thedistribution:

(1) The limited liability company would not be able to pay its debtsas they became due in the usual course of business; or

(2) The limited liability company's total assets would be less thanthe sum of its total liabilities to which such assets are subject plus,unless the operating agreement provides otherwise, the amount that would beneeded, if the limited liability company were to be dissolved at the timeof the distribution, to satisfy the preferential rights upon dissolution ofmembers whose rights to receive distributions are superior under theoperating agreement to the rights of the members receiving thedistribution, except that, for purposes of making such determination,liabilities to members or former members in their status as such shall beexcluded.

2. The limited liability company may base a determination that itsdistribution is not prohibited under subsection 1 of this section on:

(1) Financial statements prepared on the basis of generally acceptedaccounting principles and practices that are reasonable under thecircumstances; or

(2) A fair valuation or other method that is reasonable under thecircumstances.

3. The effective distribution under subsection 1 of this section ismeasured as of:

(1) The date the distribution is authorized, if the distribution infact occurs within one hundred twenty days after the date of authorization;or

(2) The date the payment is made, if it occurs more than one hundredtwenty days after the date of authorization.

4. If a member shall receive any distribution with respect to hisinterest in a limited liability company in violation of this section or theoperating agreement, such member and the person or persons who are vestedwith authority under the operating agreement to make distributions to themembers and who knowingly authorized or permitted such distribution to themember shall be liable, for a period of three years following the date ofthe distribution, to the limited liability company for the value of thewrongful distribution, but only to the extent necessary to discharge thelimited liability company's liabilities incurred prior to the date of suchdistribution. If more than one such person who authorized or permittedsuch wrongful distribution is held liable therefor pursuant to thissubsection, each such person shall be entitled to contribution from theother persons who are held so liable therefor pursuant to this subsection.