48-1-37 - Rules for distribution.
48-1-37. Rules for distribution.
In settling accounts between the partners after dissolution the following rules shall beobserved, subject to any agreement to the contrary:
(1) The assets of the partnership are:
(a) partnership property; and
(b) contributions of the partners specified in Subsection (4).
(2) The liabilities of the partnership shall rank in order of payment, as follows:
(a) those owing to creditors other than partners;
(b) those owing to partners other than for capital and profits;
(c) those owing to partners in respect of capital; and
(d) those owing to partners in respect of profits.
(3) The assets shall be applied in the order of their declaration in Subsection (1) to thesatisfaction of the liabilities.
(4) Except as provided in Subsection 48-1-12(2), the partners shall contribute asprovided by Subsection 48-1-15(1) the amount necessary to satisfy the liabilities; but if any, butnot all, of the partners are insolvent, or, not being subject to process, refuse to contribute, theother partners shall contribute their share of the liabilities, and in the relative proportions inwhich they share the profits the additional amount necessary to pay the liabilities.
(5) An assignee for the benefit of creditors, or any person appointed by the court, shallhave the right to enforce the contributions specified in Subsection (4).
(6) Any partner or his legal representative shall have the right to enforce thecontributions specified in Subsection (4) to the extent of the amount that he has paid in excess ofhis share of the liability.
(7) The individual property of a deceased partner shall be liable for the contributionsspecified in Subsection (4).
(8) When partnership property and the individual properties of the partners are in thepossession of a court for distribution, partnership creditors shall have priority on partnershipproperty and separate creditors on individual property, saving the rights of lien or securedcreditors as heretofore.
(9) When a partner has become bankrupt or his estate is insolvent, the claims against hisseparate property shall rank in the following order:
(a) those owing to separate creditors;
(b) those owing to partnership creditors; and
(c) those owing to partners by way of contribution.
Amended by Chapter 61, 1994 General Session