§ 23-4-1-38 — Rights of partners to application of partnership property

(1) When dissolution is caused in any way,
except in contravention of the partnership agreement, each partner, as
against his copartners 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 36(2) of this chapter, he shall receive in cash
only the net amount due him 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 specified in paragraph (1) of this section, and
(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 for the partnership and for that purpose may possess the
partnership property, provided they secure the payment by bond
approved by the court, or pay to any partner who has caused the
dissolution wrongfully, the value of his interest in the partnership
at the dissolution, less any damages recoverable under clause
(2)(a)(II) of this section, and in like manner indemnify him
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 (2)(b) all the rights of a partner under paragraph (1),
subject to clause (2)(a)(II), of this section.
(II) If the business is continued under paragraph (2)(b) of this
section the right as against his copartners and all claiming
through them in respect of their interests in the partnership, to
have the value of his interest in the partnership, less any
damages caused to his copartners by the dissolution,
ascertained and paid to him in cash, or the payment secured by
bond approved by the court, and to be released from all existing
liabilities of the partnership; but in ascertaining the value of the
partner's interest the value of the goodwill of the business shall
not be considered.
Formerly: Acts 1949, c.114, s.38. As amended by P.L.34-1987,
SEC.303.