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Alaska Statutes.

Title 32. Partnership

Chapter 6. Uniform Partnership Act

Section 701. Purchase of Dissociated Partner's Interest.

AS 32.06.701. Purchase of Dissociated Partner's Interest.

(a) If a partner is dissociated from a partnership without resulting in a dissolution and winding up of the partnership business under AS 32.06.801, the partnership shall cause the dissociated partner's interest in the partnership to be purchased for a buy-out price determined under (b) of this section.

(b) The buy-out price of a dissociated partner's interest is the amount that would have been distributable to the dissociating partner under AS 32.06.807 (b) if, on the date of dissociation, the assets of the partnership were sold at a price equal to the greater of the liquidation value or the value based on a sale of the entire business as a going concern without the dissociated partner and if the partnership were wound up as of that date. Interest must be paid from the date of dissociation to the date of payment.

(c) Damages for wrongful dissociation under AS 32.06.602 (b), and all other amounts owing, whether or not presently due, from the dissociated partner to the partnership must be offset against the buy-out price. Interest must be paid from the date the amount owed becomes due to the date of payment.

(d) A partnership shall indemnify against all partnership liabilities a dissociated partner whose interest is being purchased, whether the liabilities are incurred before or after the dissociation, except liabilities incurred by an act of the dissociated partner under AS 32.06.702.

(e) If an agreement for the purchase of a dissociated partner's interest is not reached within 120 days after a written demand for payment, the partnership shall pay, or cause to be paid, in cash to the dissociated partner the amount the partnership estimates to be the buy-out price and accrued interest, reduced by any offsets and accrued interest under (c) of this section.

(f) If a deferred payment is authorized under (h) of this section, the partnership may tender a written offer to pay the amount it estimates to be the buy-out price and accrued interest, reduced by any offsets under (c) of this section, stating the time of payment, the amount and type of security for payment, and the other terms and conditions of the obligation.

(g) The payment or tender required by (e) or (f) of this section must be accompanied by

(1) a statement of partnership assets and liabilities as of the date of dissociation;

(2) the latest available partnership balance sheet and income statement, if any;

(3) an explanation of how the estimated amount of the payment was calculated; and

(4) written notice that the payment is in full satisfaction of the obligation to purchase unless, within 120 days after the written notice, the dissociated partner commences an action to determine the buy-out price, any offsets under (c) of this section, or other terms of the obligation to purchase.

(h) A partner who wrongfully dissociates before the expiration of a definite term or the completion of a particular undertaking is not entitled to payment of any portion of the buy-out price until the expiration of the term or completion of the undertaking unless the partner establishes to the satisfaction of a court that earlier payment will not cause undue hardship to the business of the partnership. A deferred payment must be adequately secured and bear interest.

(i) A dissociated partner may maintain an action against the partnership under AS 32.06.405 (b)(2)(B) to determine the buy-out price of that partner's interest, any offsets under (c) of this section, or other terms of the obligation to purchase. The action must be commenced within 120 days after the partnership has tendered payment or an offer to pay or within one year after written demand for payment if a payment or offer to pay is not tendered. The court shall determine the buy-out price of the dissociated partner's interest, any offset due under (c) of this section, and accrued interest and enter judgment for any additional payment or refund. If deferred payment is authorized under (h) of this section, the court shall also determine the security for payment and other terms of the obligation to purchase. The court may assess attorney fees and costs under its court rules.

Note to HTML Version:

This version of the Alaska Statutes is current through December, 2004. The Alaska Statutes were automatically converted to HTML from a plain text format. Every effort has been made to ensure their accuracy, but this can not be guaranteed. If it is critical that the precise terms of the Alaska Statutes be known, it is recommended that more formal sources be consulted. For statutes adopted after the effective date of these statutes, see, Alaska State Legislature If any errors are found, please e-mail Touch N' Go systems at E-mail. We hope you find this information useful.

Last modified 9/3/2005