Vermont Statutes Title 11 Sec. 4057
Terms Used In Vermont Statutes Title 11 Sec. 4057
- Articles of organization: means initial, amended, and restated articles of organization and articles of merger. See
- Distribution: means a transfer of money or property from a limited liability company to a member in the member's capacity as a member or to a transferee of the member's distributional interest. See
- Manager: means a person that under the operating agreement of a manager-managed limited liability company is responsible, alone or in concert with others, for performing the management functions stated in subsection 4054(c) of this title. See
- Manager-managed limited liability company: means a limited liability company that qualifies under subsection 4054(a) of this title. See
- Member: means a person that has become a member of a limited liability company under section 4051 of this title and has not dissociated under section 4081 of this title. See
- Member-managed limited liability company: means a limited liability company that is not a manager-managed limited liability company. See
- Operating agreement: means any form of description of membership rights and obligations under section 4003 of this title, stored or depicted in any tangible or electronic medium, which is agreed to by the members, including amendments to the agreement. See
§ 4057. Liability for unlawful distributions
(a) 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 section 4056 of this title, the articles of organization, or a written operating agreement is personally liable to the company for the amount of the distribution which exceeds the amount that could have been distributed without violating section 4056 of this title, the articles of organization, or a written operating agreement if it is established that the member or manager did not perform the member’s or manager’s duties in compliance with section 4059 of this title.
(b) A member of a manager-managed limited liability company who knew a distribution was made to such member in violation of section 4056 of this title is personally liable to the limited liability company, but only to the extent that the distribution received by such member exceeded the amount that could properly have been paid under section 4056 of this title.
(c) A member or manager against whom an action is brought under this section may implead in the action all:
(1) other members or managers who voted for or assented to the distribution in violation of subsection (a) of this section and may compel contribution from them; and
(2) members who received a distribution in violation of subsection (b) of this section and may compel contribution from the member in the amount received in violation of subsection (b) of this section.
(d) A proceeding under this section is barred unless it is commenced within two years after the distribution. (Added 2015, No. 17, § 2.)