Oregon Statutes 63.235 – Liability for wrongful distribution
(1) A member of a member-managed limited liability company or a member or manager of a manager-managed company who votes for or assents to a distribution made in violation of ORS § 63.229, the articles of organization or any operating agreement, is personally liable to the limited liability company for the amount of the distribution that exceeds the amount that could have been distributed without violating ORS § 63.229, the articles of organization or any operating agreement, if it is established that the member or manager did not perform the member’s or manager’s duties in compliance with ORS § 63.155.
Terms Used In Oregon Statutes 63.235
- Articles of organization: means the document described in ORS § 63. See Oregon Statutes 63.001
- Contribution: means anything of value that a person contributes to the limited liability company as a prerequisite for or in connection with membership including cash, property or services rendered or a promissory note or other binding obligation to contribute cash or property or to perform services. See Oregon Statutes 63.001
- Distribution: means a direct or indirect transfer of money or other property, except of a limited liability company's own interests, or a limited liability company's incurrence of indebtedness to or for the benefit of the limited liability company's members in respect of a member's interests, whether in the form of a declaration or payment of profits, a purchase, retirement or other acquisition of interests, a distribution of indebtedness, or otherwise. See Oregon Statutes 63.001
- Manager: means a person, not necessarily a member, that the members of a manager-managed limited liability company designate to manage the limited liability company's business and affairs. See Oregon Statutes 63.001
- Manager-managed limited liability company: means a limited liability company that is designated as a manager-managed limited liability company in the limited liability company's articles of organization or the articles of organization of which otherwise expressly provide that a manager will manage the limited liability company. See Oregon Statutes 63.001
- Member: means a person with both an ownership interest in a limited liability company and all the rights and obligations of a member specified under this chapter. See Oregon Statutes 63.001
- Member-managed limited liability company: means a limited liability company other than a manager-managed limited liability company. See Oregon Statutes 63.001
- Operating agreement: means any valid agreement, written or oral, of the member or members as to the affairs of a limited liability company and the conduct of the limited liability company's business. See Oregon Statutes 63.001
- Proceeding: means any threatened, pending or completed action, suit or proceeding whether civil, criminal, administrative or investigatory and whether formal or informal. See Oregon Statutes 63.001
(2) A member of a manager-managed limited liability company who receives a distribution knowing that it was made in violation of ORS § 63.229 is personally liable to the limited liability company, but only to the extent that the distribution received by the member exceeded the amount that could have been properly paid under ORS § 63.229.
(3) A member or manager against whom an action is brought under subsection (1) of this section may implead in the action all:
(a) Other members or managers who voted for or assented to the distribution in violation of subsection (1) of this section and may compel contribution from them; and
(b) Members who received a distribution in violation of subsection (2) of this section and may compel contribution from them in the amount received in violation of subsection (2) of this section.
(4) A proceeding under this section is barred unless it is commenced within two years after the distribution. [1993 c.173 § 47; 1995 c.93 § 12; 1999 c.86 § 12]
MEMBERSHIP INTEREST