Rutgers Law

NOTE: This section was repealed by L.2012, c. 50, effective 2014-03-01.

New Jersey Statutes, Title: 42, PARTNERSHIPS AND PARTNERSHIP ASSOCIATIONS

    Chapter 2b:

      Section: 42:2b-42: Distributions to members, limitations; violations, liability

           42. a. A limited liability company shall not make a distribution to a member to the extent that at the time of the distribution, after giving effect to the distribution, all liabilities of the limited liability company, other than liabilities to members on account of their limited liability company interests and liabilities for which the recourse of creditors is limited to specified property of the limited liability company, exceed the fair value of the assets of the limited liability company, except that the fair value of property that is subject to a liability for which the recourse of creditors is limited shall be included in the assets of the limited liability company only to the extent that the fair value of that property exceeds that liability.

b. A member who receives a distribution in violation of subsection a. of this section, and who knew at the time of the distribution that the distribution violated subsection a. of this section, shall be liable to a limited liability company for the amount of the distribution. A member who receives a distribution in violation of subsection a. of this section, and who did not know at the time of the distribution that the distribution violated subsection a. of this section, shall not be liable for the amount of the distribution. Subject to subsection c. of this section, this subsection b. shall not affect any obligation or liability of a member under an operating agreement or other applicable law for the amount of a distribution.

c. Unless otherwise agreed, a member who receives a distribution from a limited liability company shall have no liability under this act or other applicable law for the amount of the distribution after the expiration of three years from the date of the distribution unless an action to recover the distribution from the member is commenced prior to the expiration of the three year period and an adjudication of liability against the member is made in the said action.

L.1993,c.210,s.42.



This section added to the Rutgers Database: 2012-09-26 13:37:53.