Source: https://code.dccouncil.us/dc/council/code/sections/29-804.05.html
Timestamp: 2019-04-18 12:52:16+00:00

Document:
D.C. Law Library - § 29–804.05. Limitations on distribution.
↪ § 29–804.05. Limitations on distribution.
§ 29–804.05. Limitations on distribution.
(2) The company’s total assets would be less than the sum of its total liabilities plus, unless the operating agreement permits otherwise, the amount that would be needed if the company were to be dissolved, wound up, and terminated at the time of the distribution, to satisfy the preferential rights upon dissolution, winding up, and termination of members and transferees whose preferential rights are superior to those of persons receiving the distribution.
(B) The payment is made, if the payment occurs more than 120 days after the distribution is authorized.
(d) A limited liability company’s indebtedness to a member or transferee incurred by reason of a distribution made in accordance with this section shall be at parity with the company’s indebtedness to its general, unsecured creditors , except to the extent subordinated by agreement.
(e) A limited liability company’s indebtedness, including indebtedness issued in connection with or as part of a distribution, shall not be a liability for purposes of subsection (a) of this section if the terms of the indebtedness provide that payment of principal and interest are made only to the extent that a distribution could be made to members under this section.
(f) If indebtedness is issued as a distribution, each payment of principal or interest on the indebtedness shall be treated as a distribution, the effect of which is measured on the date the payment is made.
(g) In measuring the effect of a distribution under § 29-807.05, the liabilities of a dissolved limited liability company do not include any claim that has been disposed of under § 29-807.03, § 29-807.04, or § 29-807.07.
This section is referenced in § 29-804.06 and § 29-804.08.
The 2013 amendment by D.C. Law 19-210 rewrote (a), (c), and (d).
Uniform Law: This section is based on § 405 of the Uniform Limited Company Act (2006 Act).

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