Montana Code 35-8-605. Liability upon wrongful distribution
35-8-605. Liability upon wrongful distribution. (1) A member or manager who votes for or assents to a distribution in violation of the articles of organization, the operating agreement, or 35-8-604 is personally liable to the limited liability company, but not to other persons, for the amount of the distribution that exceeds what could have been distributed without violating 35-8-604 or the articles of organization or the operating agreement if it is established that the member or manager did not perform the member’s or manager’s duties in compliance with 35-8-310.
Terms Used In Montana Code 35-8-605
- Articles of organization: means articles filed pursuant to 35-8-201 and those articles as amended or restated. See Montana Code 35-8-102
- Distribution: means a transfer of money, property, or other benefit to a member in that member's capacity as a member of a limited liability company or to a transferee of a member's distributional interest. See Montana Code 35-8-102
- Manager: means a person who, whether or not a member of a manager-managed company, is vested with authority under 35-8-301. See Montana Code 35-8-102
- Manager-managed company: means a limited liability company that is so designated in its articles of organization. See Montana Code 35-8-102
- Member: means a person who has been admitted to membership in a limited liability company, as provided in 35-8-703, and who has not dissociated from the limited liability company. See Montana Code 35-8-102
- Operating agreement: means an agreement, including amendments, as to the conduct of the business and affairs of a limited liability company and the relations among the members, managers, and the company that is binding upon all of the members. See Montana Code 35-8-102
(2)A member of a manager-managed company who knew a distribution was made in violation of 35-8-604, the articles of organization, or the operating agreement is personally liable to the company, but only to the extent that the distribution received by that member exceeded the amount that could have properly been paid to that member under 35-8-604.
(3)A member or manager against whom an action is brought under this section may implead in the action:
(a)other members and managers who voted for or assented to the distribution in violation of subsection (1) and may compel contribution from them; and
(b)members who received a distribution in violation of subsection (2) and may compel a contribution from the members in the amount received in violation of subsection (2).
(4)A proceeding under this section is barred unless it is commenced within 2 years after the date of the distribution.