[§425-140] Rules for distribution. [Repealed July 1, 2000. For new provision, see below.] In settling accounts between the partners after dissolution, the following rules shall be observed, subject to any agreement to the contrary:
(a) The assets of the partnership are:
(I) The partnership property,
(II) The contributions of the partners necessary for the payment of all the liabilities specified in clause (b) of this paragraph.
(b) The liabilities of the partnership shall rank in order of payment as follows:
(I) Those owing to creditors other than partners,
(II) Those owing to partners other than for capital and profits,
(III) Those owing to partners in respect of capital,
(IV) Those owing to partners in respect of profits.
(c) The assets shall be applied in order of their declaration in clause (a) of this paragraph to the satisfaction of the liabilities.
(d) The partners shall contribute, as provided by section 425-118(a) the amount necessary to satisfy the liabilities; but if any, but not all, of the partners are insolvent, or, not being subject to process, refuse to contribute, the other partners shall contribute their share of the liabilities, and, in the relative proportions in which they share the profits, the additional amount necessary to pay the liabilities.
(e) An assignee for the benefit of creditors or any person appointed by the court shall have the right to enforce the contributions specified in clause (d) of this paragraph.
(f) Any partner or the partner's legal representative shall have the right to enforce the contributions specified in clause (d) of this paragraph, to the extent of the amount which the partner has paid in excess of the partner's share of the liability.
(g) The individual property of a deceased partner shall be liable for the contributions specified in clause (d) of this paragraph.
(h) When partnership property and the individual properties of the partners are in possession of a court for distribution, partnership creditors shall have priority on partnership property and separate creditors on individual property, saving the rights of lien or secured creditors as heretofore.
(i) Where a partner has become bankrupt or the partner's estate is insolvent the claims against the partner's separate property shall rank in the following order:
(I) Those owing to separate creditors,
(II) Those owing to partnership creditors,
(III) Those owing to partners by way of contribution. [L 1972, c 17, §40; gen ch 1985]
§425-140 Right to wind up partnership business. [Section effective July 1, 2000. For present provision, see above.] (a) After dissolution, a partner who has not wrongfully dissociated may participate in winding up the partnership's business, but on application of any partner, partner's legal representative, or transferee, a court of competent jurisdiction for good cause shown, may order judicial supervision of the winding up.
(b) The legal representative of the last surviving partner may wind up a partnership's business.
(c) A person winding up a partnership's business may preserve the partnership business or property as a going concern for a reasonable time, prosecute and defend actions and proceedings, whether civil, criminal, or administrative, settle and close the partnership's business, dispose of and transfer the partnership's property, discharge the partnership's liabilities, distribute the assets of the partnership pursuant to section 425-144, settle disputes by mediation or arbitration, and perform other necessary acts. [L 1999, c 284, pt of §1]