8580 - Effect of division.
§ 8580. Effect of division. (a) Multiple resulting limited partnerships.--Upon the division becoming effective, the dividing limited partnership shall be subdivided into the distinct and independent resulting limited partnerships named in the plan of division, and, if the dividing limited partnership is not to survive the division, the existence of the dividing limited partnership shall cease. The resulting limited partnerships, if they are domestic limited partnerships, shall not thereby acquire authority to engage in any business or exercise any right that a limited partnership may not be organized under this chapter to engage in or exercise. Any resulting foreign limited partnership that is stated in the certificate of division to be a qualified foreign limited partnership shall be a qualified foreign limited partnership under Subchapter K (relating to foreign limited partnerships), and the certificate of division shall be deemed to be the application for registration as a foreign limited partnership of the limited partnership. (b) Property rights; allocations of assets and liabilities.-- (1) (i) All the property, real, personal and mixed, of the dividing limited partnership, and all debts due on whatever account to it, including subscriptions for partnership interests or other causes of action belonging to it, shall, except as otherwise provided in paragraph (2), to the extent allocations of assets are contemplated by the plan of division, be deemed without further action to be allocated to and vested in the resulting limited partnerships on such a manner and basis and with such effect as is specified in the plan, or per capita among the resulting limited partnerships, as tenants in common, if no specification is made in the plan, and the title to any real estate or interest therein vested in any of the limited partnerships shall not revert or be in any way impaired by reason of the division. (ii) Upon the division becoming effective, the resulting limited partnerships shall each thenceforth be responsible as separate and distinct limited partnerships only for such liabilities as each limited partnership may undertake or incur in its own name but shall be liable for the liabilities of the dividing limited partnership in the manner and on the basis provided in subparagraphs (iv) and (v). (iii) Liens upon the property of the dividing limited partnership shall not be impaired by the division. (iv) To the extent allocations of liabilities are contemplated by the plan of division, the liabilities of the dividing limited partnership shall be deemed without further action to be allocated to and become the liabilities of the resulting limited partnerships on such a manner and basis and with such effect as is specified in the plan; and one or more but less than all of the resulting limited partnerships shall be free of the liabilities of the dividing limited partnership to the extent, if any, specified in the plan if in either case: (A) no fraud of partners or violation of law shall be effected thereby; and (B) the plan does not constitute a fraudulent transfer under 12 Pa.C.S. Ch. 51 (relating to fraudulent transfers). (v) If the conditions in subparagraph (iv) for freeing one or more of the resulting limited partnerships from the liabilities of the dividing limited partnership, or for allocating some or all of the liabilities of the dividing limited partnership, are not satisfied, the liabilities of the dividing limited partnership as to which those conditions are not satisfied shall not be affected by the division nor shall the rights of creditors thereunder or of any person dealing with the limited partnership be impaired by the division, and any claim existing or action or proceeding pending by or against the limited partnership with respect to those liabilities may be prosecuted to judgment as if the division had not taken place, or the resulting limited partnerships may be proceeded against or substituted in place of the dividing limited partnership as joint and several obligors on those liabilities, regardless of any provision of the plan of division apportioning the liabilities of the dividing limited partnership. (vi) The conditions in subparagraph (iv) for freeing one or more of the resulting limited partnerships from the liabilities of the dividing limited partnership and for allocating some or all of the liabilities of the dividing limited partnership shall be conclusively deemed to have been satisfied if the plan of division has been approved by the Pennsylvania Public Utility Commission in a final order issued after August 21, 2001, that has become not subject to further appeal. (2) (i) The allocation of any fee or freehold interest or leasehold having a remaining term of 30 years or more in any tract or parcel of real property situate in this Commonwealth owned by a dividing limited partnership (including property owned by a foreign limited partnership dividing solely under the law of another jurisdiction) to a new limited partnership resulting from the division shall not be effective until one of the following documents is filed in the office for the recording of deeds of the county, or each of them, in which the tract or parcel is situated: (A) A deed, lease or other instrument of confirmation describing the tract or parcel. (B) A duly executed duplicate original copy of the certificate of division. (C) A copy of the certificate of division certified by the Department of State. (D) A declaration of acquisition setting forth the value of real estate holdings in the county of the limited partnership as an acquired company. (ii) The provisions of 75 Pa.C.S. § 1114 (relating to transfer of vehicle by operation of law) shall not be applicable to an allocation of ownership of any motor vehicle, trailer or semitrailer to a new limited partnership under this section or under a similar law of any other jurisdiction, but any such allocation shall be effective only upon compliance with the requirements of 75 Pa.C.S. § 1116 (relating to issuance of new certificate following transfer). (3) It shall not be necessary for a plan of division to list each individual asset or liability of the dividing limited partnership to be allocated to a new limited partnership so long as those assets and liabilities are described in a reasonable and customary manner. (4) Each new limited partnership shall hold any assets and liabilities allocated to it as the successor to the dividing limited partnership, and those assets and liabilities shall not be deemed to have been assigned to the new limited partnership in any manner, whether directly or indirectly or by operation of law. (c) Taxes.--Any taxes, interest, penalties and public accounts of the Commonwealth claimed against the dividing limited partnership that are settled, assessed or determined prior to or after the division shall be the liability of any of the resulting limited partnerships and, together with interest thereon, shall be a lien against the franchises and property, both real and personal, of all the limited partnerships. Upon the application of the dividing limited partnership, the Department of Revenue, with the concurrence of the Office of Employment Security of the Department of Labor and Industry, shall release one or more, but less than all, of the resulting limited partnerships from liability and liens for all taxes, interest, penalties and public accounts of the dividing limited partnership due the Commonwealth for periods prior to the effective date of the division if those departments are satisfied that the public revenues will be adequately secured. (d) Certificate of limited partnership of surviving limited partnership.--The certificate of limited partnership of the surviving limited partnership, if there be one, shall be deemed to be amended to the extent, if any, that changes in its certificate of limited partnership are stated in the plan of division. (e) Certificates of limited partnership of new limited partnerships.--The statements that are set forth in the plan of division with respect to each new domestic limited partnership and that are required or permitted to be set forth in a restated certificate of limited partnership of limited partnerships organized under this chapter, or the certificate of limited partnership of each new limited partnership set forth therein, shall be deemed to be the certificate of limited partnership of each new limited partnership. (f) Disposition of partnership interests.--Unless otherwise provided in the plan, the partnership interests and other securities or obligations, if any, of each new limited partnership resulting from the division shall be distributable to: (1) the surviving limited partnership if the dividing limited partnership survives the division; or (2) the partners of the dividing limited partnership in the proportions in which the partners share in distributions, in any other case. (g) Conflict of laws.--It is the intent of the General Assembly that: (1) The effect of a division of a domestic limited partnership shall be governed solely by the laws of this Commonwealth and any other jurisdiction under the laws of which any of the resulting limited partnerships is organized. (2) The effect of a division on the assets and liabilities of the dividing limited partnership shall be governed solely by the laws of this Commonwealth and any other jurisdiction under the laws of which any of the resulting limited partnerships is organized. (3) The validity of any allocations of assets or liabilities by a plan of division of a domestic limited partnership, regardless of whether or not any of the new limited partnerships is a foreign limited partnership, shall be governed solely by the laws of this Commonwealth. (4) In addition to the express provisions of this subsection, this subchapter shall otherwise generally be granted the protection of full faith and credit under the Constitution of the United States. (June 22, 2001, P.L.418, No.34, eff. 60 days) 2001 Amendment. Act 34 amended subsecs. (b) and (c) and added subsec. (g).