1. In winding up its activities and affairs, a limited liability company shall apply its assets to discharge the company’s obligations to creditors, including members that are creditors.

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Terms Used In Iowa Code 489.707

  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • following: when used by way of reference to a chapter or other part of a statute mean the next preceding or next following chapter or other part. See Iowa Code 4.1
  • Person: includes a protected series, however denominated, of an entity if the protected series is established under law that limits, or limits if conditions specified under law are satisfied, the ability of a creditor of the entity or of any other protected series of the entity to satisfy a claim from assets of the protected series. See Iowa Code 489.102
  • Transferable interest: means the right, as initially owned by a person in the person's capacity as a member, to receive distributions from a limited liability company, whether or not the person remains a member or continues to own any part of the right. See Iowa Code 489.102
 2. After a limited liability company complies with subsection 1, any surplus must be distributed in the following order, subject to any charging order in effect under section 489.503:

 a. To each person owning a transferable interest that reflects contributions made and not previously returned, an amount equal to the value of the unreturned contributions.
 b. Among persons owning transferable interests in proportion to their respective rights to share in distributions immediately before the dissolution of the limited liability company.
 3. If a limited liability company does not have sufficient surplus to comply with subsection 2, paragraph “a”, any surplus must be distributed among the owners of transferable interests in proportion to the value of the respective unreturned contributions.
 4. All distributions made under subsections 2 and 3 must be paid in money.