48-237-101 - Liability upon wrongful distribution. - Tennessee Statutes

48-237-101. Liability upon wrongful distribution.

(a)  Personal Liability.  Unless such person complies with the applicable standards of conduct set forth in § 48-240-103 and § 48-241-111, a member or governor who votes for or assents to a distribution made in violation of § 48-236-105 or the articles or operating agreement is personally liable to the LLC for the amount of the distribution that exceeds what could have been distributed without violating § 48-236-105 or the articles or operating agreement.

(b)  Right of Contribution.  A governor or member held liable for an unlawful distribution under subsection (a) is entitled to contribution:

     (1)  From every other governor and member who voted for or assented to the distribution; and

     (2)  From each member for the amount the member accepted, knowing the distribution was made in violation of § 48-236-105 or the articles or operating agreement.

(c)  Section Not a Limitation on Liability.  Subject to subsection (d), this section shall not affect any obligation or liability of a governor or member under the articles or operating agreement or other applicable law for the amount of a distribution.

(d)  Member's Liability.  Unless otherwise agreed, a member who receives a distribution from an LLC or a manager or governor who votes for or assents to such distribution shall have no liability under this section or other applicable law for the amount of the distribution after the expiration of three (3) years from the date of the distribution.

[Acts 1994, ch. 868, § 1.]