KRS 362.1-932: Circumstances preventing distribution -- Liability for unlawful

distribution.

(1) A limited liability partnership shall not make a distribution to the extent that at the

time of and after giving effect to the distribution, all liabilities of the lim ited

liability partnership exceed the fair value of the assets of the limited liability

partnership, other than liabilities to partners or transferees on account of their

transferable interest in liabilities for which the recourse of creditors is limited t o

specified property. The fair value of property that is subject to a liability for which

the recourse of partners is limited shall be included in the assets of the limited

liability partnership only to the extent that the fair value of that property excee ds

that liability.

(2) A partner or transferee of a limited liability partnership who receives a distribution

in violation of subsection (1) of this section is liable to the partnership for the

amount of that distribution. A proceeding under this section shall be barred unless it

is commenced within two (2) years of the date on which the distribution is paid to

the partner or transferee.

(3) This section does not affect any obligation or liability of a partner or transferee of a

limited liability partnershi p under an agreement or other applicable law for the

amount of a distribution.

(4) For purposes of this section, the term "distribution" does not include amounts

constituting reasonable compensation for present or past services or reasonable

payments made in the ordinary course of business pursuant to a bona fide retirement

plan or other benefits program.