AB566: Bill Text

AB566,121,9 (2) A limited partnership may base a determination that a distribution is not prohibited under sub. (1) on any of the following:

AB566,121,11 (a) Financial statements prepared on the basis of accounting practices and principles that are reasonable in the circumstances.

AB566,121,13 (b) A fair valuation or other method that is reasonable under the circumstances.

AB566,121,15 (3) Except as otherwise provided in sub. (5), the effect of a distribution under sub. (1) is measured as follows:

AB566,121,17 (a) In the case of a distribution as described in s. 179.0102 (4) (a) 1. and 2., as of the earlier of the following:

AB566,121,19 1. The date money or other property is transferred or debt is incurred by the limited partnership.

AB566,121,21 2. The date the person entitled to the distribution ceases to own the interest or rights being acquired by the partnership in return for the distribution.

AB566,121,23 (b) In the case of any distribution of indebtedness other than one under par. (a), as of the date the indebtedness is distributed.

AB566,121,24 (c) In all cases other than those under par. (a) or (b), as of the following:

AB566,122,2 1. The date the distribution is authorized, if the payment occurs not later than 120 days after that date.

AB566,122,4 2. The date the payment is made, if the payment occurs more than 120 days after the distribution is authorized.

AB566,122,8 (4) A limited partnership's indebtedness to a partner or transferee incurred by reason of a distribution made in accordance with this section is at parity with the partnership's indebtedness to its general, unsecured creditors, except to the extent subordinated by agreement.

AB566,122,15 (5) A limited partnership's indebtedness, including indebtedness issued as a distribution, is not a liability for purposes of sub. (1) if the terms of the indebtedness provide that payment of principal and interest is made only if and to the extent that a payment of a distribution could then be made under this section. If the indebtedness is issued as a distribution, each payment of principal or interest is treated as a distribution, the effect of which is measured on the date the payment is made.

AB566,122,18 (6) In measuring the effect of a distribution under s. 179.0810, the liabilities of a dissolved limited partnership do not include any claim that has been disposed of under s. 179.0806, 179.0807, or 179.0808.

AB566,122,23 179.0505 Liability for improper distributions. (1) If a general partner consents to a distribution made in violation of s. 179.0504 and in consenting to the distribution fails to comply with s. 179.0409, the general partner is personally liable to the limited partnership for the amount of the distribution which exceeds the amount that could have been distributed without the violation of s. 179.0504.

AB566,123,2 (2) A person that receives a distribution knowing that the distribution violated s. 179.0504 is personally liable to the limited partnership but only to the extent that the distribution received by the person exceeded the amount that could have been properly paid under s. 179.0504.

AB566,123,5 (3) A general partner against which an action is commenced because the general partner is liable under sub. (1) with respect to a distribution may do any of the following:

AB566,123,7 (a) Implead any other person that is liable under sub. (1) with respect to the distribution and seek to enforce a right of contribution from the person.

AB566,123,10 (b) Implead any person that received the distribution in violation of sub. (2) and seek to enforce a right of contribution from the person in the amount the person received in violation of sub. (2).

AB566,123,12 (4) An action under this section is barred unless commenced not later than 2 years after the distribution.

AB566,123,13 subchapter VI

AB566,123,14 DISSOCIATION

AB566,123,17 179.0601 Dissociation as limited partner. (1) A person does not have a right to dissociate as a limited partner before the completion of the winding up of the limited partnership.

AB566,123,19 (2) A person is dissociated as a limited partner when any of the following applies:

AB566,123,22 (a) The limited partnership knows or has notice of the person's express will to withdraw as a limited partner, but, if the person has specified a withdrawal date later than the date the partnership knew or had notice, on that later date.

AB566,123,24 (b) An event stated in the partnership agreement as causing the person's dissociation as a limited partner occurs.

AB566,124,2 (c) The person is expelled as a limited partner pursuant to the partnership agreement.

AB566,124,4 (d) The person is expelled as a limited partner by the affirmative vote or consent of all the other partners if any of the following applies:

AB566,124,6 1. It is unlawful to carry on the limited partnership's activities and affairs with the person as a limited partner.

AB566,124,9 2. There has been a transfer of all of the person's transferable interest in the partnership, other than a transfer for security purposes or the entry of a charging order that is in effect under s. 179.0703 and that has not been foreclosed.

AB566,124,10 3. The person is an entity and all of the following apply:

AB566,124,15 a. The partnership notifies the person that it will be expelled as a limited partner because the person has filed a statement of dissolution or the equivalent, the person has been administratively dissolved, the person's charter or the equivalent has been revoked, or the person's right to conduct activities and affairs has been suspended by the jurisdiction of the person's governing law.

AB566,124,19 b. The statement of dissolution or the equivalent has not been withdrawn, rescinded, or revoked, the person has not been reinstated, or the person's charter or the equivalent or right to conduct activities and affairs has not been reinstated, within 90 days after the notification under subd. 3. a.

AB566,124,21 4. The person is an unincorporated entity that has been dissolved and whose activities and affairs are being wound up.

AB566,124,24 (e) On application by the limited partnership or a partner in a direct action under s. 179.0901, the person is expelled as a limited partner by judicial order because the person has done any of the following:

AB566,125,3 1. Engaged, or is engaging, in wrongful conduct that has affected adversely and materially, or will affect adversely and materially, the partnership's activities and affairs.

AB566,125,6 2. Committed willfully or persistently, or is committing willfully or persistently, a material breach of the partnership agreement or of the contractual obligation of good faith and fair dealing under s. 179.0305 (1).

AB566,125,9 3. Engaged, or is engaging, in conduct relating to the partnership's activities and affairs which makes it not reasonably practicable to carry on the partnership's activities and affairs with the person as a limited partner.

AB566,125,10 (f) In the case of an individual, the individual dies.

AB566,125,13 (g) In the case of a person that is a testamentary or living trust or is acting as a limited partner by virtue of being a trustee of such a trust, the trust's entire transferable interest in the limited partnership is distributed.

AB566,125,16 (h) In the case of a person that is an estate or is acting as a limited partner by virtue of being a personal representative of an estate, the estate's entire transferable interest in the limited partnership is distributed.

AB566,125,18 (i) In the case of a person that is not an individual, the existence of the person terminates.

AB566,125,19 (n) The limited partnership dissolves and completes winding up.

AB566,125,21 179.0602 Effect of dissociation as limited partner. (1) If a person is dissociated as a limited partner, all of the following apply:

AB566,125,23 (a) Subject to s. 179.0704, the person does not have further rights as a limited partner.

AB566,126,3 (b) The person's contractual obligation of good faith and fair dealing as a limited partner under s. 179.0305 (1) ends with regard to matters arising and events occurring after the person's dissociation.

AB566,126,6 (c) Subject to s. 179.0704 and subch. XI, any transferable interest owned by the person in the person's capacity as a limited partner immediately before dissociation is owned by the person solely as a transferee.

AB566,126,9 (2) A person's dissociation as a limited partner does not of itself discharge the person from any debt, obligation, or other liability to the limited partnership or the other partners which the person incurred while a limited partner.

AB566,126,11 179.0603 Dissociation as general partner. A person is dissociated as a general partner when any of the following applies:

AB566,126,14 (1) The limited partnership knows or has notice of the person's express will to withdraw as a general partner, but, if the person has specified a withdrawal date later than the date the partnership knew or had notice, on that later date.

AB566,126,16 (2) An event stated in the partnership agreement as causing the person's dissociation as a general partner occurs.

AB566,126,18 (3) The person is expelled as a general partner pursuant to the partnership agreement.

AB566,126,20 (4) The person is expelled as a general partner by the affirmative vote or consent of all the other partners if any of the following applies:

AB566,126,22 (a) It is unlawful to carry on the limited partnership's activities and affairs with the person as a general partner.

AB566,126,25 (b) There has been a transfer of all of the person's transferable interest in the partnership, other than a transfer for security purposes or the entry of a charging order that is in effect under s. 179.0703 and that has not been foreclosed.

AB566,127,1 (c) The person is an entity and all of the following apply:

AB566,127,6 1. The partnership notifies the person that it will be expelled as a general partner because the person has filed a statement of dissolution or the equivalent, the person has been administratively dissolved, the person's charter or the equivalent has been revoked, or the person's right to conduct its activities and affairs has been suspended by the jurisdiction of the person's governing law.

AB566,127,10 2. The statement of dissolution or the equivalent has not been withdrawn, rescinded, or revoked, the person has not been reinstated, or the person's charter or the equivalent or right to conduct its activities and affairs has not been reinstated, within 90 days after the notification under subd. 1.

AB566,127,12 (d) The person is an unincorporated entity that has been dissolved and whose activities and affairs are being wound up.

AB566,127,15 (5) On application by the limited partnership or a partner in a direct action under s. 179.0901, the person is expelled as a general partner by judicial order because the person has done any of the following:

AB566,127,18 (a) Engaged, or is engaging, in wrongful conduct that has affected adversely and materially, or will affect adversely and materially, the partnership's activities and affairs.

AB566,127,21 (b) Committed willfully or persistently, or is committing willfully or persistently, a material breach of the partnership agreement or a duty or obligation under s. 179.0409.

AB566,127,24 (c) Engaged, or is engaging, in conduct relating to the partnership's activities and affairs which makes it not reasonably practicable to carry on the activities and affairs of the limited partnership with the person as a general partner.

AB566,127,25 (6) In the case of an individual, any of the following applies:

AB566,128,1 (a) The individual dies.

AB566,128,2 (b) A guardian or general conservator for the individual is appointed.

AB566,128,5 (c) A court orders that the individual has otherwise become incapable of performing the individual's duties as a general partner under this chapter or the partnership agreement.

AB566,128,6 (7) Any of the following applies to the person:

AB566,128,7 (a) The person becomes a debtor in bankruptcy.

AB566,128,8 (b) The person signs an assignment for the benefit of creditors.

AB566,128,10 (c) The person seeks, consents to, or acquiesces in the appointment of a trustee, receiver, or liquidator of the person or of all or substantially all the person's property.

AB566,128,13 (8) In the case of a person that is a testamentary or living trust or is acting as a general partner by virtue of being a trustee of such a trust, the trust's entire transferable interest in the limited partnership is distributed.

AB566,128,16 (9) In the case of a person that is an estate or is acting as a general partner by virtue of being a personal representative of an estate, the estate's entire transferable interest in the limited partnership is distributed.

AB566,128,18 (10) In the case of a person that is not an individual, the existence of the person terminates.

AB566,128,19 (15) The limited partnership dissolves and completes winding up.

AB566,128,23 179.0604 Power to dissociate as general partner; wrongful dissociation. (1) A person has the power to dissociate as a general partner at any time, rightfully or wrongfully, by withdrawing as a general partner by express will under s. 179.0603 (1).

AB566,128,25 (2) A person's dissociation as a general partner is wrongful only if any of the following applies:

AB566,129,2 (a) The dissociation is in breach of an express provision of the partnership agreement.

AB566,129,4 (b) The dissociation occurs before the completion of the winding up of the limited partnership and any of the following applies:

AB566,129,5 1. The person withdraws as a general partner by express will.

AB566,129,7 2. The person is expelled as a general partner by judicial order under s. 179.0603 (5).

AB566,129,8 3. The person is dissociated as a general partner under s. 179.0603 (7).

AB566,129,11 4. In the case of a person that is not a trust other than a business trust, an estate, or an individual, the person is expelled or otherwise dissociated as a general partner because it willfully dissolved or terminated.

AB566,129,15 (3) A person that wrongfully dissociates as a general partner is liable to the limited partnership and, subject to s. 179.0901, to the other partners for damages caused by the dissociation. The liability is in addition to any debt, obligation, or other liability of the general partner to the partnership or the other partners.

AB566,129,17 179.0605 Effect of dissociation as general partner. (1) If a person is dissociated as a general partner, all of the following apply:

AB566,129,19 (a) The person's right to participate as a general partner in the management and conduct of the limited partnership's activities and affairs terminates.

AB566,129,22 (b) The person's duties and obligations as a general partner under s. 179.0409 end with regard to matters arising and events occurring after the person's dissociation.

AB566,130,2 (c) 1. The person may sign and deliver to the department for filing a statement of dissociation pertaining to the person and, at the request of the limited partnership, shall sign an amendment to the certificate of limited partnership which states that the person has dissociated as a general partner.

AB566,130,4 2. The statement of dissociation or amendment under subd. 1. is a limitation on the authority of a person dissociated as a partner for the purposes of s. 179.04023.