Partner's
Dissociation When



Business Not
Wound Up



 



§425-133  Purchase of dissociated partner's
interest.  (a)  If a partner is dissociated from a partnership without
resulting in a dissolution and winding up of the partnership business under
section 425-138, the partnership shall cause the dissociated partner's interest
in the partnership to be purchased for a buyout price determined pursuant to
subsection (b).



(b)  The buyout price of a dissociated
partner's interest is the amount that would have been distributable to the
dissociating partner under section 425-144(b) if, on the date of dissociation,
the assets of the partnership were sold at a price equal to the greater of the
liquidation value or the value based on a sale of the entire business as a going
concern without the dissociated partner and the partnership were wound up as of
that date.  Interest shall be paid from the date of dissociation to the date of
payment.



(c)  Damages for wrongful dissociation under
section 425-131(b), and all other amounts owing, whether or not presently due,
from the dissociated partner to the partnership, shall be offset against the
buyout price.  Interest shall be paid from the date the amount owed becomes due
to the date of payment.



(d)  A partnership shall indemnify a
dissociated partner whose interest is being purchased against all partnership
liabilities, whether incurred before or after the dissociation, except
liabilities incurred by an act of the dissociated partner under section
425-134.



(e)  If no agreement for the purchase of a
dissociated partner's interest is reached within one hundred twenty days after
a written demand for payment, the partnership shall pay, or cause to be paid,
in cash to the dissociated partner the amount the partnership estimates to be the
buyout price and accrued interest, reduced by any offsets and accrued interest
under subsection (c).



(f)  If a deferred payment is authorized under
subsection (h), the partnership may tender a written offer to pay the amount it
estimates to be the buyout price and accrued interest, reduced by any offsets
under subsection (c), stating the time of payment, the amount and type of
security for payment, and the other terms and conditions of the obligation.



(g)  The payment or tender required by
subsection (e) or (f) shall be accompanied by the following:



(1)  A statement of partnership assets and liabilities
as of the date of dissociation;



(2)  The latest available partnership balance sheet
and income statement, if any;



(3)  An explanation of how the estimated amount of the
payment was calculated; and



(4)  Written notice that the payment is in full
satisfaction of the obligation to purchase unless, within one hundred twenty
days after the written notice, the dissociated partner commences an action to
determine the buyout price, any offsets under subsection (c), or other terms of
the obligation to purchase.



(h)  A partner who wrongfully dissociates
before the expiration of a definite term or the completion of a particular
undertaking is not entitled to payment of any portion of the buyout price until
the expiration of the term or completion of the undertaking, unless the partner
establishes to the satisfaction of the court that earlier payment will not
cause undue hardship to the business of the partnership.  A deferred payment
must be adequately secured and bear interest.



(i)  A dissociated partner may maintain an
action against the partnership, pursuant to section 425-124(b)(2), to determine
the buyout price of that partner's interest, any offsets under subsection (c),
or other terms of the obligation to purchase.  The action must be commenced
within one hundred twenty days after the partnership has tendered payment or an
offer to pay or within one year after written demand for payment if no payment
or offer to pay is tendered.  The court shall determine the buyout price of the
dissociated partner's interest, any offset due under subsection (c), and
accrued interest, and enter judgment for any additional payment or refund.  If
deferred payment is authorized under subsection (h), the court shall also
determine the security for payment and other terms of the obligation to
purchase.  The court may assess reasonable attorney's fees and the fees and
expenses of appraisers or other experts for a party to the action, in amounts
the court finds equitable, against a party that the court finds acted
arbitrarily, vexatiously, or not in good faith.  The finding may be based on
the partnership's failure to tender payment or an offer to pay or to comply
with subsection (g). [L 1999, c 284, pt of §1]