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Terms Used In Tennessee Code 48-245-1101

  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Court: includes every court and judge having jurisdiction in the case. See Tennessee Code 48-202-101
  • Dissolution: means that the LLC has incurred an event under §. See Tennessee Code 48-202-101
  • 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
  • Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
  • LLC: means a limited liability company, organized under chapters 201-248 of this title. 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
  • Membership: means the rights and obligations a member has pursuant to a corporation's charter, bylaws and chapters 51-68 of this title. See Tennessee Code 48-51-201
  • 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
  • Share: means the unit into which the proprietary interests in a corporation are divided. See Tennessee Code 48-11-201
  • Statute of limitations: A law that sets the time within which parties must take action to enforce their rights.
  • Termination: means the end of an LLC's existence as a legal entity and occurs when the articles of termination are filed with the secretary of state under §. See Tennessee Code 48-202-101
  • Trustee: A person or institution holding and administering property in trust.
(1)Distribution of assets in winding up. Upon the winding up of an LLC, the assets shall be distributed as follows:

(A) To creditors, including members who are creditors, to the extent otherwise permitted by law, in satisfaction of liabilities of the LLC (whether by payment or the making of reasonable provisions for payment thereof) other than:

(i) Liabilities for which reasonable provision for payment has been made; and
(ii) Liabilities for distributions to members under § 48-236-102;
(B) Unless otherwise provided in the articles or operating agreement, to members and former members in satisfaction of liabilities for distributions under § 48-236-102; and
(C) Unless otherwise provided in the articles or operating agreement, to members, first, for the return of their contributions including any restated value thereof under § 48-235-102(b), and, second, respecting their membership interests, in the proportions in which the members share in distributions.
(2) Any distributions in any form other than cash shall be in accordance with § 48-236-103.
(b)Insufficient assets to pay creditors. An LLC which has dissolved shall pay or make reasonable operating provision to pay all claims and obligations, including all contingent, conditional or unmatured claims and obligations, known to the LLC and all claims and obligations which are known to the LLC but for which the identity of the claimant is unknown. If there are sufficient assets, such claims and obligations shall be paid in full and any such provision for payment made shall be made in full. If there are insufficient assets, such claims and obligations shall be paid or provided for according to their priority and, among claims and obligations of equal priority, ratably to the extent of assets available therefor. Unless otherwise provided in articles or operating agreement, any remaining assets shall be distributed as provided in chapters 201-248 of this title. Any liquidating trustee winding up an LLC’s affairs who has complied with this section shall not be personally liable to the claimants of the dissolved LLC by reason of such person‘s actions in winding up the LLC.
(c)Obligations incurred during proceedings. All known contractual debts, obligations, and liabilities incurred in the course of winding up and terminating the LLC’s affairs must be paid or provided for by the LLC before the distribution of assets to a member. A person to whom this kind of debt, obligation, or liability is owed but not paid may pursue any remedy before the expiration of the applicable statute of limitations against the managers and governors of the LLC who are responsible for, but who fail to cause, the LLC to pay or make provision for payment of the debts, obligations, and liabilities or against members to the extent permitted under § 48-237-101. This subsection (c) does not apply to dissolution and/or termination under the supervision or order of a court.
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