Section 38Part 8 — Foreign Limited Liability Companies
Distribution of assets
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Subject to subsection
, the assets of the limited liability company shall be applied in the following order of priority as between creditors and members in a winding up —
first, pari passu to creditors whose status as such is not derived from their membership, if any, of the limited liability company; and
unless otherwise provided in the LLC agreement —
secondly, to persons who have become entitled to a distribution from the limited liability company in connection with a LLC interest, in order of priority of the time of such entitlement and to the extent thereof (and pari passu where entitlements are of e qual priority); and
thirdly, to members in connection with and according to the rights of their LLC interest. ( 2 ) The collection in and application of the property of the limited liability company referred to in subsection (1) is without prejudice to and after taking into account and giving effect to the rights of preferred and secured creditors and to any agreement between the limited liability company and any creditors that the claims of such creditors shall be subordinated or otherwise deferred to t he claims of any other creditors and to any contractual rights of set - off or netting of claims between the limited liability company and any person or persons (including without limita tion any bilateral or any multi lateral set - off or netting arrangements b etween the limited liability company and any person or persons) and subject to any agreement between the limited liability company and any person or persons to waive or limit the same.
In the absence of any contractual right of set - off, non - set - off or netting, an account shall be taken of what is due from each party to the other in respect of their mutual dealings and the sums due from one party shall be set - off against the sums due from the other.