When capital or profits distribution need to be refunded by a Limited Partner in Limited Partnership (LP) Firm?

Any distribution of capital or profits to the limited partners must be refunded if the following conditions are present:

1. every general partner of the LP was insolvent at the time of the distribution or became insolvent as a result of the distribution;
2. the limited partner knew or ought to have known at the time of the distribution that every general partner was insolvent or would become insolvent as a result of the distribution; and
3. every general partner is adjudicated bankrupt or is ordered to be wound up within one year after the date of the distribution.