§4057. Liability for unlawful distributions

Link to law: http://legislature.vermont.gov/statutes/section/11/025/04057
Published: 2015

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The Vermont Statutes Online



Title

11

:
Corporations, Partnerships and Associations






Chapter

025

:
LIMITED LIABILITY COMPANIES






Subchapter

004
:
RELATIONS OF MEMBERS TO EACH OTHER AND TO LIMITED LIABILITY COMPANY










 

§

4057. Liability for unlawful distributions

(a) A member of

a member-managed limited liability company or a member or manager of a

manager-managed company who votes for or assents to a distribution made in

violation of section 4056 of this title, the articles of organization, or a

written operating agreement is personally liable to the company for the amount

of the distribution which exceeds the amount that could have been distributed

without violating section 4056 of this title, the articles of organization, or

a written operating agreement if it is established that the member or manager

did not perform the member's or manager's duties in compliance with section

4059 of this title.

(b) A member of

a manager-managed limited liability company who knew a distribution was made to

such member in violation of section 4056 of this title is personally liable to

the limited liability company, but only to the extent that the distribution

received by such member exceeded the amount that could properly have been paid

under section 4056 of this title.

(c) A member or

manager against whom an action is brought under this section may implead in the

action all:

(1) other

members or managers who voted for or assented to the distribution in violation

of subsection (a) of this section and may compel contribution from them; and

(2) members who

received a distribution in violation of subsection (b) of this section and may

compel contribution from the member in the amount received in violation of

subsection (b) of this section.

(d) A proceeding

under this section is barred unless it is commenced within two years after the

distribution. (Added 2015, No. 17, § 2.)
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