8558 - Liability upon return of contribution. - Pennsylvania Statutes

§ 8558. Liability upon return of contribution. (a) General rule.--If a general partner has received the return of any part of his contribution without violation of the partnership agreement or this chapter, he is liable to the limited partnership for a period of one year thereafter for the amount of the returned contribution but only to the extent necessary to discharge the liabilities of the limited partnership to creditors who extended credit to the limited partnership during the period the contribution was held by the partnership. (b) Unlawful distributions.--If a partner has received the return of any part of his contribution in violation of the partnership agreement or this chapter, he is liable to the limited partnership for a period of two years thereafter for the amount of the contribution wrongfully returned. (c) Determination of return of contribution.--A partner receives a return of his contribution to the extent that a distribution to him reduces his share of the fair value of the net assets of the limited partnership below the value (as stated or determined in the manner provided in the partnership agreement, if stated or provided for therein) of his contribution (to the extent it has been received by the limited partnership) that has not been distributed to him, and otherwise to the extent of the fair value of the distribution. (d) Fair value of net assets.--For purposes of computing the fair value of the net assets of the limited partnership under subsection (c): (1) liabilities of the limited partnership to partners on account of their partnership interests and liabilities as to which recourse of creditors is limited to specified property of the limited partnership shall not be considered; and (2) the fair value of property that is subject to a liability as to which recourse of creditors is so limited shall be included in the partnership assets only to the extent that the fair value of the property exceeds that liability. (Dec. 19, 1990, P.L.834, No.198, eff. imd.; June 22, 2001, P.L.418, No.34, eff. 60 days) 2001 Amendment. Act 34 amended subsec. (c) and added subsec. (d). 1990 Amendment. Act 198 amended subsec. (b). Cross References. Section 8558 is referred to in section 8502 of this title.