District Of Columbia § 29-1206.15 - Limitations on distributions.
Full text of District Of Columbia D.C. Code § 29-1206.15 — Limitations on distributions., with citation guidance and answers to common questions.
§ 29-1206.15. Limitations on distributions.
29-1206.15A statutory trust may not make a distribution, including a distribution under , if after the distribution:
The trust would not be able to pay its debts as they become due in the ordinary course of the trust’s activities and affairs; or
The trust’s total assets would be less than the sum of its total liabilities plus, unless the governing instrument permits otherwise, the amount that would be needed, if the trust were to be dissolved and wound up at the time of the distribution, to satisfy the preferential rights upon dissolution and winding up of beneficial owners and transferees whose preferential rights are superior to the right to receive distributions of the persons receiving the distribution.
A trustee may base a determination that a distribution is not prohibited under subsection (a) of this section on:
Financial statements prepared on the basis of accounting practices and principles that are reasonable in the circumstances; or
A fair valuation or other method that is reasonable under the circumstances.
Except as otherwise provided in subsection (e) of this section, the effect of a distribution under subsection (a) of this section is measured:
In the case of a distribution by purchase, redemption, or other acquisition of a beneficial interest, as of the earlier of the date:
Money or other property is transferred or debt is incurred by the trust; or
The person entitled to the distribution ceases to own the interest or rights being acquired by the trust in return for the distribution;
In the case of any other distribution of indebtedness, as of the date the indebtedness is distributed; and
In all other cases, as of the date:
The distribution is authorized, if the payment occurs not later than 120 days after that date; or
The payment is made, if the payment occurs more than 120 days after the distribution is authorized.
A statutory trust’s indebtedness to a beneficial owner or transferee incurred by reason of a distribution made in accordance with this section is at parity with the trust’s indebtedness to its general, unsecured creditors, except to the extent subordinated by agreement.
A statutory trust’s indebtedness, including indebtedness issued as a distribution, is not a liability for purposes of subsection (a) of this section if the terms of the indebtedness provide that payment of principal and interest are made only if and to the extent that payment of a distribution could then be made under this section. If indebtedness is issued as a distribution, each payment of principal or interest is treated as a distribution, the effect of which is measured on the date the payment is actually made.
In measuring the effect of a distribution under , the debts, obligations, and other liabilities of a dissolved statutory trust do not include any claim that has been disposed of under , 29-1208.05, or 29-1208.06.
Annotations
Source: official District Of Columbia text · Last verified 2026-08-27
Frequently Asked Questions About District Of Columbia § 29-1206.15
What does D.C. Code § 29-1206.15 cover?
Section 29-1206.15 ("Limitations on distributions.") is part of the D.C. Code, the codified statutory law of District Of Columbia. It sets out the legal rule or procedure described in the text above. Statutes are amended regularly, so always verify against the official source.
How do I cite District Of Columbia § 29-1206.15?
A common citation format is "D.C. Code § 29-1206.15" (District Of Columbia). Legal writing may require the code abbreviation, section number, and year or edition. Match the style required by your court, professor, or publisher.
Is this the official text of District Of Columbia law?
No. This page is for research and education and may not include the most recent amendments. For official current law, check the District Of Columbia official source linked on this page or consult a licensed District Of Columbia attorney.
How does District Of Columbia § 29-1206.15 apply to my situation?
Statutes are interpreted in context, and application depends on your specific facts. Only a licensed attorney in District Of Columbia can advise on how this section applies to you. Contact your state or local bar association for a referral.
Sources & Verification
Not legal advice. Verify against the official source and consult a licensed attorney in District Of Columbia.