(a) If a general partner consents to a distribution made in violation of § 61-3-504 and in consenting to the distribution fails to comply with § 61-3-409, the general partner is personally liable to the limited partnership for the amount of the distribution which exceeds the amount that could have been distributed without the violation of § 61-3-504.

Terms Used In Tennessee Code 61-3-505

  • General partner: means a person that:
    (A) Has become a general partner under §. See Tennessee Code 61-3-101
  • Partner: means a limited partner or general partner. See Tennessee Code 61-3-101
  • Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
  • Person: means an individual, business corporation, nonprofit corporation, partnership, limited partnership, limited liability company, cooperative association, unincorporated nonprofit association, statutory trust, business trust, common-law business trust, estate, trust, association, joint venture, public corporation, government or governmental subdivision, agency, or instrumentality, or any other legal or commercial entity. See Tennessee Code 61-3-101
  • right of contribution: means property or a benefit described in §. See Tennessee Code 61-3-101
(b) A person that receives a distribution knowing that the distribution violated § 61-3-504 is personally liable to the limited partnership but only to the extent that the distribution received by the person exceeded the amount that could have been properly paid under § 61-3-504.
(c) A general partner against which an action is commenced because the general partner is liable under subsection (a) may:

(1) Implead any other person that is liable under subsection (a) and seek to enforce a right of contribution from the person; and
(2) Implead any person that received a distribution in violation of subsection (b) and seek to enforce a right of contribution from the person in the amount the person received in violation of subsection (b).
(d) An action under this section is barred unless commenced not later than two (2) years after the distribution.
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