§1367.__Right to distribution

When a partner or transferee becomes entitled to receive a distribution, the partner or transferee has the status of, and is entitled to all remedies available to, a creditor of the limited partnership with respect to the distribution. However, the limited partnership's obligation to make a distribution is subject to offset for any amount owed to the limited partnership by the partner or dissociated partner on whose account the distribution is made.

§1368.__Limitations on distribution

1.__In violation of partnership agreement.__A limited partnership may not make a distribution in violation of the partnership agreement.

2.__Unable to pay debts or satisfy superior preferential rights.__A limited partnership may not make a distribution if after the distribution:

A.__The limited partnership would not be able to pay its debts as they become due in the ordinary course of the limited partnership's activities; or

B.__The limited partnership's total assets would be less than the sum of its total liabilities plus the amount that would be needed, if the limited partnership were to be dissolved, wound up and terminated at the time of the distribution, to satisfy the preferential rights upon dissolution, winding up and termination of partners whose preferential rights are superior to those of persons receiving the distribution.

3.__Basis for determination that distribution not prohibited.__ A limited partnership may base a determination that a distribution is not prohibited under subsection 2 on financial statements prepared on the basis of accounting practices and principles that are reasonable in the circumstances or on a fair valuation or other method that is reasonable in the circumstances.

4.__Measuring effect of distribution.__Except as otherwise provided in subsection 7, the effect of a distribution under subsection 2 is measured:

A.__In the case of distribution by purchase, redemption or other acquisition of a transferable interest in the limited