§ 23-4-1-40 — Rules for distribution

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 contribution of the partners specified in clause (d) 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 the order of their declaration in
clause (a) of this paragraph to the satisfaction of the liabilities.
(d) Except as provided in section 15(2) of this chapter, the
partners shall contribute, as provided by section 18(a) of this
chapter, 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 his legal representative shall have the right to
enforce the contributions specified in clause (d) of this paragraph,
to the extent of the amount which he has paid in excess of his
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 his estate is insolvent,
the claims against his 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.
Formerly: Acts 1949, c.114, s.40. As amended by P.L.34-1987,
SEC.304; P.L.230-1995, SEC.8.