N.Y. Limited Liability Company Law § 502: Liability for contributions

§ 502. Liability for contributions. (a) Except as provided in the

operating agreement, a member is obligated to the limited liability

company to perform any promise to contribute cash or property or to

perform services that is otherwise enforceable in accordance with

applicable law, even if he or she is unable to perform because of death,

disability or any other reason. Except as provided in the operating

agreement, if a member does not make any required contribution of

property or services, he or she is obligated at the option of the

limited liability company to contribute cash equal to that portion of

the value, as stated in the records of the limited liability company, if

so stated, of the contribution that he or she has not made. The

foregoing option shall be in addition to, and not in lieu of, any other

rights, including the right to specific performance, that the limited

liability company may have against such member under the operating

agreement or applicable law.

(b) Unless otherwise provided in the operating agreement and except as

provided in section six hundred five of this chapter, the obligation of

a member to make a contribution or to return money or other property

paid or distributed in violation of this chapter may be compromised only

by consent of all the members. Notwithstanding the compromise, a

creditor of a limited liability company who extends credit in reliance

on the obligation of any member may enforce the original obligation to

the extent he or she reasonably relied on such obligation after the

member signed a writing which reflects the obligation and the creditor

extended credit before the compromise. A conditional obligation of a

member to make a contribution or return money or other property to a

limited liability company may not be enforced unless the conditions to

the obligation have been satisfied or waived as to or by such member.

Conditional obligations include contributions payable upon a

discretionary call of a limited liability company or a member prior to

the time the call occurs.

(c) The operating agreement may provide that the membership interest

of any member who fails to make any required contribution shall be

subject to specified consequences of such failure. Such consequences may

include, but are not limited to, reduction or elimination of the

defaulting member's interest, subordination of the defaulting member's

interest to that of nondefaulting members, a forced sale of the

defaulting member's interest, forfeiture of the defaulting member's

interest, the lending by the other members of the amount necessary to

meet the defaulting member's commitment, a fixing of the value of the

defaulting member's interest by appraisal or by formula and redemption

or sale of such member's interest at such value, or other consequences.