Del. C. » Title 6 — SUBTITLE II · Commerce and Trade · Subchapter VI. Distributions and Resignation
Delaware Code

6 Del. C. § 18-607 (2026)

Limitations on distribution

✓ current as of May 2026
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(a) 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, other than liabilities to members on account of their limited liability company interests and liabilities for which the recourse of creditors is limited to specified property of the limited liability company, exceed the fair value of the assets of the limited liability company, except that the fair value of property that is subject to a liability for which the recourse of creditors is limited shall be included in the assets of the limited liability company only to the extent that the fair value of that property exceeds that liability. For purposes of this subsection (a), the term “distribution” shall not include amounts constituting reasonable compensation for present or past services or reasonable payments made in the ordinary course of business pursuant to a bona fide retirement plan or other benefits program.

(b) A member who receives a distribution in violation of subsection (a) of this section, and who knew at the time of the distribution that the distribution violated subsection (a) of this section, shall be liable to a limited liability company for the amount of the distribution. A member who receives a distribution in violation of subsection (a) of this section, and who did not know at the time of the distribution that the distribution violated subsection (a) of this section, shall not be liable for the amount of the distribution. Subject to subsection (c) of this section, this subsection shall not affect any obligation or liability of a member under an agreement or other applicable law for the amount of a distribution.

(c) Unless otherwise agreed, a member who receives a distribution from a limited liability company shall have no liability under this chapter or other applicable law for the amount of the distribution after the expiration of 3 years from the date of the distribution unless an action to recover the distribution from such member is commenced prior to the expiration of the said 3-year period and an adjudication of liability against such member is made in the said action.

68 Del. Laws, c. 434, §  1;  69 Del. Laws, c. 260, §  29;  72 Del. Laws, c. 389, §  23; 

Notes of Decisions
Cited in 9 cases (6 in the last 5 years), 2005–2026 · leading case: Faulkner v. Kornman (In Re Heritage Org., L.L.C.), 413 B.R. 438 (Bankr. N.D. Tex. 2009).
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Faulkner v. Kornman (In Re Heritage Org., L.L.C.), 413 B.R. 438 (Bankr. N.D. Tex. 2009). “See 6 Del Code § 18-607(c). While the Delaware statute does limit the liability of a member for wrongful distributions to three years, for the reasons explained more fully below, this Court concludes that the Delaware legislature cannot limit the reach of TUF-TA.”
O'Connell v. Shallo (In Re Die Fliedermaus LLC), 323 B.R. 101 (Bankr. S.D.N.Y. 2005). “LEXIS 52 at *16 (2000) that 6 Del. C. § 18-607(a), which is nearly identical to § 508, "prohibits the stripping of corporate assets so as to render an LLC insolvent, and creates a corporate cause of action against LLC members who improperly receive a distribution of those assets.”
PXP Producing Co. LLC v. MitEnergy Upstream LLC (Del. Ch. 2025). · cites it 3× “§ 18-601 (providing “a member is entitled to receive [interim distributions] before the [company’s] dissolution and winding up thereof”); 6 Del. C. § 18-607 (setting forth limitations on distribution outside of the winding up process); 6 Del.”
Paul Elton, LLC v. Rommel Delaware, LLC (Del. Ch. 2020). · cites it 2× “See 6 Del. C. § 18-607; Robert L. Symonds, Jr.”
Manhattan Chrystie St. Dev. Fund, LLC v. 215 Chrystie Invs. LLC (N.Y. Sup. Ct. 2023). · cites it 2× “In motion sequence number 001, all defendants except for Ziel Feldman move to dismiss for failure to state a cause of action, [*2]pursuant to CPLR 3211(a)(7) and 6 Del. C. §18-607(c), and based on documentary evidence, pursuant to CPLR 3211(a).”
Miller v. Mott (Bankr. D. Del. 2023). “The trustee sufficiently alleges unjust enrichment in the First Amended Complaint (Count 10). Unjust enrichment is the “unjust retention of a benefit to the loss of another, or the retention of money or property of another against the fundamental principles of justice or equity…”
Balasiano v. Borell (Bankr. D. Del. 2023). “30 6 Del. Code. §18-607(c); In re Bos. Generating LLC, 617 B.”
Furniture Factory Ultimate Holding, LP (Bankr. D. Del. 2023). “30 6 Del. Code. §18-607(c); In re Bos. Generating LLC, 617 B.”
WIA Holdings LLC, et.al. v. Scottish Am. Capital LLC, et.al. (Del. Ch. 2026). “174 WIA asserts that by doing so, SAC rendered itself unable to satisfy its indemnification obligations under the SPA, in violation of 6 Del. C. § 18-607, and Mr. Thomas received an unjust benefit.”
— 6 Del. C. § 18-607(a) — 2 cases
O'Connell v. Shallo (In Re Die Fliedermaus LLC), 323 B.R. 101 (Bankr. S.D.N.Y. 2005). “LEXIS 52 at *16 (2000) that 6 Del. C. § 18-607(a), which is nearly identical to § 508, "prohibits the stripping of corporate assets so as to render an LLC insolvent, and creates a corporate cause of action against LLC members who improperly receive a distribution of those assets.”
Miller v. Mott (Bankr. D. Del. 2023). “The trustee sufficiently alleges unjust enrichment in the First Amended Complaint (Count 10). Unjust enrichment is the “unjust retention of a benefit to the loss of another, or the retention of money or property of another against the fundamental principles of justice or equity…”
— 6 Del. C. § 18-607(b) — 1 case
Paul Elton, LLC v. Rommel Delaware, LLC (Del. Ch. 2020). “See 6 Del. C. § 18-607; Robert L. Symonds, Jr.”
— 6 Del. C. § 18-607(c) — 5 cases
Faulkner v. Kornman (In Re Heritage Org., L.L.C.), 413 B.R. 438 (Bankr. N.D. Tex. 2009). “See 6 Del Code § 18-607(c). While the Delaware statute does limit the liability of a member for wrongful distributions to three years, for the reasons explained more fully below, this Court concludes that the Delaware legislature cannot limit the reach of TUF-TA.”
Manhattan Chrystie St. Dev. Fund, LLC v. 215 Chrystie Invs. LLC (N.Y. Sup. Ct. 2023). “In motion sequence number 001, all defendants except for Ziel Feldman move to dismiss for failure to state a cause of action, [*2]pursuant to CPLR 3211(a)(7) and 6 Del. C. §18-607(c), and based on documentary evidence, pursuant to CPLR 3211(a).”
Balasiano v. Borell (Bankr. D. Del. 2023). “30 6 Del. Code. §18-607(c); In re Bos. Generating LLC, 617 B.”
Furniture Factory Ultimate Holding, LP (Bankr. D. Del. 2023). “30 6 Del. Code. §18-607(c); In re Bos. Generating LLC, 617 B.”
PXP Producing Co. LLC v. MitEnergy Upstream LLC (Del. Ch. 2025). “§ 18-601 (providing “a member is entitled to receive [interim distributions] before the [company’s] dissolution and winding up thereof”); 6 Del. C. § 18-607 (setting forth limitations on distribution outside of the winding up process); 6 Del.”
— 6 Del. C. § 18-607(d) — 1 case
PXP Producing Co. LLC v. MitEnergy Upstream LLC (Del. Ch. 2025). “§ 18-601 (providing “a member is entitled to receive [interim distributions] before the [company’s] dissolution and winding up thereof”); 6 Del. C. § 18-607 (setting forth limitations on distribution outside of the winding up process); 6 Del.”
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