Limitation on distributions

(1) A limited liability company shall not make a distribution to a member to the extent that at the time of the distribution, after giving effect to the distribution, all liabilities of the limited liability company would exceed the fair value of the assets of the limited liability company, (a) liabilities to members and former members under sections 43 and 47 of this Act shall be excluded; (b) liabilities for which the recourse of creditors is limited to specified property shall be excluded, provided the fair value of such recourse property is reduced by the recourse liability; and (c) contingent liabilities shall be excluded. (2) The limited liability company may base a determination that a distribution is not prohibited under subsection (1) of this section on any of the following, (a) financial statements prepared on the basis of generally acceptable accounting practices (GAAP) and principles that are reasonable in the circumstances; (b) a fair valuation or other method that is reasonable in the circumstances; (c) an analysis of contingencies that is reasonable in the circumstances. (3) The effect of a distribution under subsection (1) of this section is measured either as of the date the distribution is authorised if the payment occurs within one hundred twenty days after the date of authorisation or as of the date the payment is made if it occurs more than one hundred twenty days after the date of authorisation. (4) If a member receives a distribution with respect to his interest in a limited liability company in violation of this Act 44 or an operating agreement, he or it is liable to the limited liability company for a period of two years thereafter for the amount of the wrongful distribution. An action to recover a wrongful distribution under this section may be brought in any court of competent jurisdiction so long as it is commenced within the said period.