2006 Nebraska Revised Statutes - § 67-340 — Dissolution; accounts between partners; rules.

Section 67-340
Dissolution; accounts between partners; rules.

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; and

(II) The contributions of the partners specified in subdivision (d) of this section;

(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; and

(IV) Those owing to partners in respect of profits;

(c) The assets of the partnership shall be applied in the order of their declaration in subdivision (a) of this section to the satisfaction of the liabilities;

(d) Except as provided in subsection (2) of section 67-315:

(I) The partners shall contribute, as provided by subdivision (a) of section 67-318, the amount necessary to satisfy the liabilities; and

(II) 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 subdivision (d) of this section;

(f) Any partner or his or her legal representative shall have the right to enforce the contributions specified in subdivision (d) of this section, to the extent of the amount which he or she has paid in excess of his or her share of the liability;

(g) The individual property of a deceased partner shall be liable for the contributions specified in subdivision (d) of this section;

(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; and

(i) If a partner has become bankrupt or his or her estate is insolvent, the claims against his or her separate property shall rank in the following order:

(I) Those owing to separate creditors;

(II) Those owing to partnership creditors; and

(III) Those owing to partners by way of contribution.

Source:

Laws 1943, c. 143, § 40, p. 501

R.S.1943, § 67-340

Laws 1996, LB 681, § 211

Termination date January 1, 2001

Annotations:

A partner is entitled under subsection (c) of this section to have the assets of the partnership applied against the liabilities of the partnership before calculating his share of additional contribution. Robertson v. Southwood, 233 Neb. 685, 447 N.W.2d 616 (1989).

It is a general rule that capital furnished by any partner, in the absence of an agreement to the contrary, is a debt owing by the firm to the contributing partner, and necessarily is to be repaid him, if the firm's assets are sufficient after paying the firm's liabilities to outsiders. Upon dissolution, where one has contributed capital and another services, the one contributing the capital is entitled to withdraw its value. Badran v. Bertrand, 214 Neb. 413, 334 N.W.2d 184 (1983).

Under the facts of this case, the undistributed net profits constituted a debt of the partnership to the partners herein. Bass v. Dalton, 213 Neb. 360, 329 N.W.2d 115 (1983).

~Reissue Revised Statutes of Nebraska