Tennessee § 48-249-620 - Disposition upon liquidation.

§ 48-249-620. Disposition upon liquidation.

Distribution of Assets. Upon the winding up of an LLC, the assets shall be distributed as follows: First, to creditors, including members and holders of financial rights who are creditors, to the extent otherwise permitted by law, in satisfaction of liabilities of the LLC, whether by payment or the making of reasonable provisions for payment of such liabilities, other than liabilities: For which reasonable provision for payment has been made; and For distributions to members and holders of financial rights under § 48-249-305; Second, to members, former members and holders of financial rights, in satisfaction of liabilities for distributions under § 48-249-305; and Third, to members and holders of financial rights, first, for the return of their contributions that have not previously been returned, and, second, respecting the membership interests of members and the financial rights of holders of financial rights, as applicable, in the proportions in which the members and holders of financial rights, as applicable, share in distributions under § 48-249-305. Any distributions in any form other than cash shall be subject to § 48-249-305(d). Provisions for claims. An LLC that has dissolved shall pay, or make reasonable operating provision to pay, all claims and obligations, including all contingent, conditional or unmatured claims and obligations, known to the LLC, regardless of whether the identity of the claimant is known. If there are sufficient assets, such claims and obligations shall be paid in full, and any such provision for payment made shall be made in full. If there are insufficient assets, such claims and obligations shall be paid or provided for according to their priority, and, among claims and obligations of equal priority, ratably, to the extent of assets available for payment. Any remaining assets shall be distributed as provided in this chapter. Any receiver or custodian winding up an LLC's affairs who has complied with this section shall not be personally liable to the claimants of the dissolved LLC by reason of the receiver's or custodian's actions in winding up the LLC. Debts incurred during winding up. All known contractual debts, obligations, and liabilities incurred in the course of winding up and terminating the LLC's affairs shall be paid or provided for by the LLC before the distribution of assets to a member or holder of financial rights. A person to whom this kind of debt, obligation, or liability is owed but not paid may pursue any remedy, before the expiration of the applicable statute of limitations, against the members, directors, managers or officers of the LLC, as applicable, who are responsible for, but who fail to cause, the LLC to pay or make provision for payment of the debts, obligations, and liabilities, or against members or holders of financial rights to the extent permitted under § 48-249-307. This subsection (c) does not apply to dissolution, winding up or termination of the existence of the LLC under the supervision or order of a court. Acts 2005, ch. 286, § 1.