2017 Arizona Revised Statutes
Title 29 - Partnership
§ 29-373 Effect of transaction; definition

Universal Citation: AZ Rev Stat § 29-373 (2017)

29-373. Effect of transaction; definition

A. If the post-transaction entity is a domestic limited partnership, a partner of the post-transaction entity is liable for:

1. All obligations of an entity that is a party to or otherwise undertakes the transaction for which the partner was personally liable before the transaction.

2. All other obligations of the post-transaction entity incurred before the transaction by an entity that is a party to or otherwise undertakes the transaction, but those obligations may be satisfied only out of property of the post-transaction entity.

3. All obligations of the post-transaction entity incurred after the transaction takes effect, but those obligations may be satisfied only out of property of the entity if the partner is a limited partner.

B. If the obligations incurred before the transaction by a domestic limited partnership that is a party to or otherwise undertakes the transaction are not to be satisfied out of the property of the post-transaction entity pursuant to the plan, the general partners of that partnership immediately before the effective date of the transaction shall contribute the amount necessary to satisfy that partnership's obligations to the post-transaction entity in the manner provided in section 29-1077, as if that partnership were dissolved.

C. A partner of a domestic limited partnership that is a party to or otherwise undertakes a transaction who does not become a partner or other interest holder of the post-transaction entity is dissociated, as provided in section 29-1051, from the domestic limited partnership of which that partner was a partner, as of the date the transaction takes effect. If the dissociated partner was a general partner before the transaction, the post-transaction entity shall cause the partner's interest in the limited partnership to be purchased under section 29-334, subsection C or section 29-1061, as applicable, or another statute specifically applicable to that partner's interest with respect to a transaction. If the dissociated partner was a general partner before the transaction, the post-transaction entity is bound under section 29-1062 by an act of a general partner dissociated under this subsection and the partner is liable under section 29-1063 for transactions entered into by the post-transaction entity after the transaction takes effect.

D. For the purposes of this section, " post-transaction entity" means any of the following, as applicable:

1. The surviving entity in a merger.

2. The converted entity in a conversion.

3. The domesticated entity in a domestication.

4. Each resulting entity in a division, jointly and severally.

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