(a)Personal Liability. Unless such person complies with the applicable standards of conduct set forth in § 48-240-103 and § 48-241-111, a member or governor who votes for or assents to a distribution made in violation of § 48-236-105 or the articles or operating agreement is personally liable to the LLC for the amount of the distribution that exceeds what could have been distributed without violating § 48-236-105 or the articles or operating agreement.
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Terms Used In Tennessee Code 48-237-101

  • Distribution: means a direct or indirect transfer of money or other property (except its own membership interests) with or without consideration, or an incurrence or issuance of indebtedness, (whether directly or indirectly, including through a guaranty) by an LLC to or for the benefit of any of its members in respect of membership interests. See Tennessee Code 48-202-101
  • Governor: means a natural person or entity serving on the board of governors of a board-managed LLC. See Tennessee Code 48-202-101
  • LLC: means a limited liability company, organized under chapters 201-248 of this title. See Tennessee Code 48-202-101
  • Manager: means a person elected, appointed, or otherwise designated as a manager by the governing body, and any other person considered elected as a manager pursuant to §. See Tennessee Code 48-202-101
  • Member: means a person reflected in the required records of an LLC as the owner of some governance rights of a membership interest of the LLC. See Tennessee Code 48-202-101
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • Operating agreement: means a written agreement described in §. See Tennessee Code 48-202-101
  • Person: includes individual and entity. See Tennessee Code 48-202-101
(b)Right of Contribution. A governor or member held liable for an unlawful distribution under subsection (a) is entitled to contribution:

(1) From every other governor and member who voted for or assented to the distribution; and
(2) From each member for the amount the member accepted, knowing the distribution was made in violation of § 48-236-105 or the articles or operating agreement.
(c)Section Not a Limitation on Liability. Subject to subsection (d), this section shall not affect any obligation or liability of a governor or member under the articles or operating agreement or other applicable law for the amount of a distribution.
(d)Member’s Liability. Unless otherwise agreed, a member who receives a distribution from an LLC or a manager or governor who votes for or assents to such distribution shall have no liability under this section or other applicable law for the amount of the distribution after the expiration of three (3) years from the date of the distribution.
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