§ 7-60-138 — Application of partnership property

(1) When dissolution is
caused in any way, except in contravention of the partnership agreement, each
partner as against the other partners and all persons claiming through them in
respect of their interests in the partnership, unless otherwise agreed, may have the
partnership property applied to discharge its liabilities and the surplus applied to
pay in cash the net amount owing to the respective partners. But if dissolution is
caused by expulsion of a partner, bona fide under the partnership agreement, and if
the expelled partner is discharged from all partnership liabilities, either by payment
or agreement under section 7-60-136 (2), the expelled partner shall receive in cash
only the net amount due the expelled partner from the partnership.

(2) When dissolution is caused in contravention of the partnership
agreement, the rights of the partners shall be as follows:

(a) Each partner who has not caused dissolution wrongfully shall have:

(I) All the rights stated in subsection (1) of this section;

(II) The right, as against each partner who has caused the dissolution
wrongfully, to damages for breach of the agreement.

(b) The partners who have not caused the dissolution wrongfully, if they all
desire to continue the business in the same name either by themselves or jointly
with others, may do so during the agreed term of the partnership and for that
purpose may possess the partnership property, if they secure the payment by bond
approved by the court or pay to any partner who has caused the dissolution
wrongfully the value of such partner's interest in the partnership at the dissolution,
less any damages recoverable under subparagraph (II) of paragraph (a) of this
subsection (2), and in like manner indemnify such partner against all present or
future partnership liabilities.

(c) A partner who has caused the dissolution wrongfully shall have:

(I) If the business is not continued under the provisions of paragraph (b) of
this subsection (2), all the rights of a partner under subsection (1) of this section,
subject to paragraph (a)(II) of this subsection (2);

(II) If the business is continued under paragraph (b) of this subsection (2), the
right as against the other partners and all claiming through them, in respect of their
interests in the partnership, to have the value of such partner's interest in the
partnership, less any damages caused to the other partners by the dissolution,
ascertained and paid to such partner in cash or the payment secured by bond
approved by the court, and to be released from all existing liabilities of the
partnership; except that, in ascertaining the value of such partner's interest, the
value of the goodwill of the business shall not be considered.

Legislative History

Source: L. 31: p. 667, � 38. CSA: C. 123, � 38. CRS 53: � 104-1-38. C.R.S. 1963: � 104-1-38. L. 2003: (2)(a)(I) amended, p. 2236, � 114, effective July 1, 2004. L. 2004: (1), (2)(b), and (2)(c)(II) amended, p. 1429, � 93, effective July 1.