§ 71 — Rules for distribution

New York § 71

• Jurisdiction: New York
• Law PTR: Partnership
• Art. 6: Dissolution and Winding Up

Text

§ 71. Rules for distribution. In settling accounts between the\npartners after dissolution, the following rules shall be observed,\nsubject to any agreement to the contrary:\n (a) The assets of the partnership are:\n I. The partnership property,\n II. The contributions of the partners specified in paragraph (d) of\nthis subdivision.\n (b) The liabilities of the partnership shall rank in order of payment,\nas follows:\n I. Those owing to creditors other than partners,\n II. Those owing to partners other than for capital and profits,\n III. Those owing to partners in respect of capital,\n IV. Those owing to partners in respect of profits.\n (c) The assets shall be applied in the order of their declaration in\nclause (a) of this paragraph to the satisfaction of the liabilities.\n (d) Except as provided in subdivision (b) of section twenty-six of\nthis section: (1) partners shall contribute, as provided by section\nforty, subdivision one, the amount necessary to satisfy the liabilities;\nand (2) if any, but not all, of the partners are insolvent, or, not\nbeing subject to process, refuse to contribute, the other partners shall\ncontribute their share of the liabilities, and, in the relative\nproportions in which they share the profits, the additional amount\nnecessary to pay the liabilities.\n (e) An assignee for the benefit of creditors or any person appointed\nby the court shall have the right to enforce the contributions specified\nin paragraph (d) of this subdivision.\n (f) Any partner or his legal representative shall have the right to\nenforce the contributions specified in paragraph (d) of this\nsubdivision, to the extent of the amount which he has paid in excess of\nhis share of the liability.\n (g) The individual property of a deceased partner shall be liable for\nthe contributions specified in paragraph (d) of this subdivision.\n (h) When partnership property and the individual properties of the\npartners are in the possession of a court for distribution, partnership\ncreditors shall have priority on partnership property and separate\ncreditors on individual property, saving the rights of lien or secured\ncreditors as heretofore.\n (i) Where a partner has become bankrupt or his estate is insolvent the\nclaims against his separate property shall rank in the following order:\n I. Those owing to separate creditors,\n II. Those owing to partnership creditors,\n III. Those owing to partners by way of contribution.\n