(a) Unless the distribution is made in compliance with Chapter 11, a limited partnership may not make a distribution to a partner if, immediately after giving effect to the distribution and despite any compromise of a claim referred to by Sections 153.203 and 153.204, all liabilities of the limited partnership, other than liabilities to partners with respect to their partnership interests and liabilities for which the recourse of creditors is limited to specified property of the limited partnership, exceed the fair value of the partnership assets. The fair value of property that is subject to a liability for which recourse of creditors is limited shall be included in the partnership assets for purposes of this subsection only to the extent that the fair value of that property exceeds that liability.
(b) For purposes of this section, “distribution” does not include an amount constituting reasonable compensation for present or past services or a reasonable payment made in the ordinary course of business under a bona fide retirement plan or other benefits program.

Terms Used In Texas Business Organizations Code 153.210

  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Business: means a trade, occupation, profession, or other commercial activity. See Texas Business Organizations Code 1.002
  • Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
  • Limited partnership: means a partnership that is governed as a limited partnership under Title 4 and that has one or more general partners and one or more limited partners. See Texas Business Organizations Code 1.002
  • Partner: means a limited partner or general partner. See Texas Business Organizations Code 1.002
  • 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.
  • Partnership: means an entity governed as a partnership under Title 4. See Texas Business Organizations Code 1.002
  • Property: includes tangible and intangible property and an interest in that property. See Texas Business Organizations Code 1.002
  • Recourse: An arrangement in which a bank retains, in form or in substance, any credit risk directly or indirectly associated with an asset it has sold (in accordance with generally accepted accounting principles) that exceeds a pro rata share of the bank's claim on the asset. If a bank has no claim on an asset it has sold, then the retention of any credit risk is recourse. Source: FDIC
  • Subsidiary: means an organization for which another organization, either directly or indirectly through or with one or more of its other subsidiaries:
    (A) owns at least 50 percent of the outstanding ownership or membership interests of the organization; or
    (B) possesses at least 50 percent of the voting power of the owners or members of the organization. See Texas Business Organizations Code 1.002

(c) For purposes of this section, the determination of the amount of a limited partnership’s liabilities or the value of a limited partnership’s assets may be based on:
(1) financial statements of the limited partnership, which may include the financial statements of subsidiary entities or other entities accounted for on a consolidated basis or on the equity method of accounting, that:
(A) present the financial condition of the limited partnership and any subsidiary or other entities included in those financial statements in accordance with generally accepted accounting principles or international financial reporting standards; or
(B) have been prepared using the method of accounting used to file the partnership’s federal income tax return or using any other accounting practices and principles that are reasonable under the circumstances;
(2) financial information, including condensed or summary financial statements, that are prepared on the same basis as financial statements described by Subdivision (1);
(3) projections, forecasts, or other forward-looking information relating to the future economic performance, financial condition, or liquidity of the limited partnership that is reasonable under the circumstances;
(4) a fair valuation or information from any other method that is reasonable under the circumstances; or
(5) a combination of a statement, valuation, or information authorized by this subsection.
(d) Subsection (c) does not apply to the computation of the franchise tax or any other tax imposed on a limited partnership under the laws of this state.
(e) An action alleging a distribution is made in violation of this section must be commenced not later than the second anniversary of the date of the distribution.

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