§ 7-13-37 - Limitations on distribution.
SECTION 7-13-37
§ 7-13-37 Limitations on distribution.– (a) A limited partnership shall not make a distribution to a partner to theextent that at the time of the distribution, after giving effect to thedistribution, all liabilities of the limited partnership, other thanliabilities to partners on account of their partnership interests andliabilities for which the recourse of creditors is limited to specifiedproperty of the limited partnership, exceed the fair value of the assets of thelimited partnership, except that the fair value of property that is subject toa liability for which the recourse of creditors is limited shall be included inthe assets of the limited partnership only to the extent that the fair value ofthat property exceeds that liability.
(b) A limited partner who received a distribution inviolation of subsection (a), and who knew or reasonably should have known atthe time of the distribution that the distribution violated subsection (a), isliable to the limited partnership for the amount of the distribution. A limitedpartner who receives a distribution in violation of subsection (a) and who didnot know and reasonably should not have known at the time of the distributionthat the distribution violated subsection (a), is not liable for the amount ofthe distribution. Subject to subsection (c), this subsection does not affectany obligation or liability of a limited partner under a partnership agreementor other applicable law for the amount of a distribution.
(c) Unless otherwise agreed, a limited partner who received adistribution from a limited partnership has no liability under this chapter orother applicable law for the amount of the distribution after the expiration ofthree (3) years from the date of the distribution.