SB566: Bill Text

SB566,143,11 (4r) The provisions of s. 179.0103 (7m) shall apply to notices under this section.

SB566,143,15 179.0807 Claims against dissolved limited partnership generally. (1) A dissolved limited partnership may publish notice of its dissolution and request persons having claims, whether known or unknown, against the partnership to present them in accordance with the notice.

SB566,143,16 (2) A notice under sub. (1) must satisfy all of the following:

SB566,143,20 (a) It must be published as a class 1 notice, under ch. 985, in a newspaper of general circulation in the county in this state in which the dissolved limited partnership's principal office is located or, if the principal office is not located in this state, in the county in which the partnership's registered office is or was last located.

SB566,143,23 (b) It must describe the information required to be contained in a claim, state that the claim must be in writing, and provide a mailing address to which the claim is to be sent.

SB566,144,3 (c) It must state that a claim against the partnership is barred unless an action to enforce the claim is commenced not later than 2 years after publication of the notice.

SB566,144,7 (d) Unless the partnership has been throughout its existence a limited liability limited partnership, it must state that the barring of a claim against the partnership will also bar any corresponding claim against any general partner or person dissociated as a general partner which is based on s. 179.0404.

SB566,144,11 (3) If a dissolved limited partnership publishes a notice in accordance with sub. (2), the claim of each of the following claimants is barred unless the claimant commences an action to enforce the claim against the partnership not later than 2 years after the publication date of the notice:

SB566,144,12 (a) A claimant that did not receive notice in a record under s. 179.0806.

SB566,144,14 (b) A claimant whose claim was timely sent to the partnership but not acted on.

SB566,144,16 (c) A claimant whose claim is contingent at, or based on an event occurring after, the date of dissolution.

SB566,144,18 (4) A claim not barred under this section or s. 179.0806 may be enforced against any of the following:

SB566,144,19 (a) A dissolved limited partnership, to the extent of its undistributed assets.

SB566,144,25 (b) Except as otherwise provided in s. 179.0808, if assets of the partnership have been distributed after dissolution, a partner or transferee to the extent of that person's proportionate share of the claim or of the partnership's assets distributed to the partner or transferee after dissolution, whichever is less, but a person's total liability for all claims under this paragraph may not exceed the total amount of assets distributed to the person after dissolution.

SB566,145,1 (c) Any person liable on the claim under s. 179.0404 or 179.0607.

SB566,145,11 179.0808 Court proceedings. (1) A dissolved limited partnership that has published a notice under s. 179.0807 may file an application with the circuit court in the county in this state where the partnership's principal office is located or, if the principal office is not located in this state, where the partnership's registered office is or was last located, for a determination of the amount and form of security to be provided for payment of claims that are contingent or are not known to the partnership or that are based on an event occurring after the effective date of dissolution but that, based on the facts known to the partnership, are reasonably expected to arise after the effective date of dissolution. Provision need not be made for any claim that is or is reasonably anticipated to be barred under s. 179.0807.

SB566,145,14 (2) Not later than 10 days after the filing of an application under sub. (1), the dissolved limited partnership shall give notice of the proceeding to each claimant holding a contingent claim whose contingent claim is known to the partnership.

SB566,145,18 (3) In any proceeding under this section, the court may appoint a guardian ad litem to represent all claimants whose identities are unknown. The reasonable fees and expenses of the guardian, including all reasonable expert witness fees, must be paid by the dissolved limited partnership.

SB566,145,24 (4) A dissolved limited partnership that provides security in the amount and form ordered by the court under sub. (1) satisfies the partnership's obligations with respect to claims that are contingent, are not known to the partnership, or are based on an event occurring after the effective date of dissolution, and such claims may not be enforced against a partner or transferee on account of assets received in liquidation.

SB566,146,4 179.0809 Liability of general partner and person dissociated as general partner when claim against limited partnership barred. If a claim against a dissolved limited partnership is barred under s. 179.0806, 179.0807, or 179.0808, any corresponding claim under s. 179.0404 or 179.0607 is also barred.

SB566,146,8 179.0810 Disposition of assets in winding up; when contributions required. (1) In winding up its activities and affairs, a limited partnership shall apply its assets, including the contributions required by this section, to discharge the partnership's obligations to creditors, including partners that are creditors.

SB566,146,11 (2) After a limited partnership complies with sub. (1), any surplus must be distributed in the following order, subject to any charging order in effect under s. 179.0703:

SB566,146,14 (a) To each person owning a transferable interest that reflects contributions made and not previously returned, an amount equal to the value of the unreturned contributions.

SB566,146,17 (b) Among persons owning transferable interests, in proportion to their respective rights to share in distributions immediately before the dissolution of the partnership.

SB566,146,20 (3) If a limited partnership's assets are insufficient to satisfy all its obligations under sub. (1), with respect to each unsatisfied obligation incurred when the partnership was not a limited liability limited partnership, the following rules apply:

SB566,147,2 (a) Each person that was a general partner when the obligation was incurred and that has not been released from the obligation under s. 179.0607 shall contribute to the partnership for the purpose of enabling the partnership to satisfy the obligation. The contribution due from each of those persons is in proportion to the right to receive distributions in the capacity of a general partner in effect for each of those persons when the obligation was incurred.

SB566,147,9 (b) If a person does not contribute the full amount required under par. (a) with respect to an unsatisfied obligation of the partnership, the other persons required to contribute by par. (a) on account of the obligation shall contribute the additional amount necessary to discharge the obligation. The additional contribution due from each of those other persons is in proportion to the right to receive distributions in the capacity of a general partner in effect for each of those other persons when the obligation was incurred.

SB566,147,12 (c) If a person does not make the additional contribution required by par. (b), further additional contributions are determined and due in the same manner as provided in that paragraph.

SB566,147,17 (4) A person that makes an additional contribution under sub. (3) (b) or (c) may recover from any person whose failure to contribute under sub. (3) (a) or (b) necessitated the additional contribution. A person may not recover under this subsection more than the amount additionally contributed. A person's liability under this subsection may not exceed the amount the person failed to contribute.

SB566,147,20 (4r) If a limited partnership does not have sufficient surplus to comply with sub. (2) (a), any surplus must be distributed among the owners of transferable interests in proportion to the value of the respective unreturned contributions.

SB566,147,21 (5) All distributions made under sub. (2) must be paid in money.

SB566,147,24 179.0811 Administrative dissolution. (1) The department may commence a proceeding under sub. (2) to dissolve a limited partnership administratively if any of the following applies:

SB566,148,2 (a) The partnership does not pay, within one year after they are due, any fees or penalties required to be paid to the department under this chapter.

SB566,148,4 (b) The partnership does not have on file with the department its annual report within one year after it is due.

SB566,148,6 (c) The partnership is without a registered agent or registered office in this state for at least one year.

SB566,148,9 (d) The partnership does not notify the department within one year that its registered agent or registered office has been changed, that its registered agent has resigned, or that its registered office has been discontinued.

SB566,148,10 (e) The partnership violates s. 940.302 (2) or 948.051 (2).

SB566,148,14 (2) If the department determines that one or more grounds exist for administratively dissolving a limited partnership, the department may give the partnership notice of the determination. The notice shall be in writing and addressed to the registered agent of the limited partnership.

SB566,148,18 (3) (a) Within 60 days after the notice under sub. (2) takes effect under s. 179.0103 (7m), the limited partnership shall, with respect to each ground for administrative dissolution, either correct it or demonstrate to the reasonable satisfaction of the department that it does not exist.

SB566,148,23 (b) If the limited partnership fails to satisfy par. (a), the department may administratively dissolve the partnership. The department shall enter a notation in its records to reflect each ground for administrative dissolution and the effective date of dissolution and shall give the partnership notice of those facts. The notice shall be in writing and addressed to the registered agent of the partnership.

SB566,149,2 (3m) (a) If a notice under sub. (2) or (3) (b) is returned to the department as undeliverable, the department shall again give notice to the limited partnership. Except as provided under par. (b), this notice shall be in writing and addressed to the principal office of the partnership.

SB566,149,6 (b) If the notice under par. (a) is returned to the department as undeliverable or if the limited partnership's principal office cannot be determined from the records of the department, the department shall give notice by posting the notice on the department's Internet site.

SB566,149,10 (4) A limited partnership that is administratively dissolved continues in existence as an entity but may not carry on any activities except as necessary to wind up its activities and affairs and liquidate its assets under ss. 179.0802, 179.0806, 179.0807, 179.0808, and 179.0810, or to apply for reinstatement under s. 179.0812.

SB566,149,12 (4m) A limited partnership's right to the exclusive use of its name terminates on the date of the administrative dissolution under sub. (3) (b).

SB566,149,14 (5) The administrative dissolution of a limited partnership does not terminate the authority of its registered agent.

SB566,149,17 179.0812 Reinstatement. (1) A limited partnership that is administratively dissolved under s. 179.0811 may apply to the department for reinstatement. The application shall include all of the following:

SB566,149,19 (a) The name of the partnership and the effective date of its administrative dissolution.

SB566,149,21 (b) A statement that each ground for dissolution either did not exist or has been cured.

SB566,149,22 (c) A statement that the partnership's name satisfies s. 179.0114.

SB566,149,24 (2) (a) Upon application, the department shall reinstate a limited partnership if the department determines all of the following:

SB566,150,2 1. That the application contains the information required by sub. (1) and the information is correct.

SB566,150,4 2. That all fees and penalties owed by the partnership to the department under this chapter have been paid.

SB566,150,10 (b) Upon reinstatement of a limited partnership under par. (a), the department shall enter a notation in its records revising the notation specified in s. 179.0811 (3) (b) to reflect cancellation of the dissolution and reinstatement of the partnership. The notation shall state both the department's determination under par. (a) and the effective date of reinstatement. The department shall provide notice of the reinstatement to the partnership or its representative.

SB566,150,12 (4) When the reinstatement under this section is effective, all of the following shall apply:

SB566,150,14 (a) Except as provided in par. (c), the reinstatement relates back to and takes effect as of the effective date of the administrative dissolution.

SB566,150,16 (b) Except as provided in par. (c), the limited partnership resumes carrying on its activities and affairs as if the administrative dissolution had never occurred.

SB566,150,18 (c) The rights of a person arising out of an act or omission in reliance on the dissolution before the person knew or had notice of the reinstatement are unaffected.

SB566,150,22 179.0813 Appeal from denial of reinstatement. (1) If the department denies a limited partnership's application for reinstatement under s. 179.0812, the department shall serve the partnership with a written notice, addressed to the registered agent of the partnership, that explains each reason for denial.

SB566,151,5 (2) The limited partnership may appeal the denial of reinstatement to the circuit court for the county where the partnership's principal office or, if none in this state, the office of its registered agent is located, within 30 days after service of the notice of denial is effective under s. 179.0103 (7m). To appeal, the partnership shall petition the court to set aside the administrative dissolution and attach to the petition copies of the department's notice of administrative dissolution under s. 179.0811 (3) (b), the partnership's application for reinstatement under s. 179.0812 (1), and the department's notice of denial under sub. (1).

SB566,151,7 (3) The court may order the department to reinstate the limited partnership or may take other action that the court considers appropriate.

SB566,151,8 (4) The court's final decision may be appealed as in other civil proceedings.

SB566,151,9 subchapter IX

SB566,151,10 ACTIONS BY PARTNERS

SB566,151,16 179.0901 Direct action by partner. (1) Subject to sub. (2), a partner may maintain a direct action against another partner or the limited partnership, with or without an accounting as to the partnership's activities and affairs, to enforce the partner's rights and protect the partner's interests, including rights and interests under the partnership agreement or this chapter or arising independently of the partnership relationship.

SB566,151,19 (2) A partner maintaining a direct action under this section must plead and prove an actual or threatened injury that is not solely the result of an injury suffered or threatened to be suffered by the limited partnership.

SB566,151,21 (3) A right to an accounting on a dissolution and winding up does not revive a claim barred by law.

SB566,151,23 179.0902 Derivative action. A partner may maintain a derivative action to enforce a right of a limited partnership if any of the following applies:

SB566,152,3 (1) The partner first makes a demand on the general partners, requesting that they cause the limited partnership to bring an action to enforce the right, and the general partners do not bring the action within a reasonable time.

SB566,152,4 (2) A demand under sub. (1) would be futile.

SB566,152,7 179.0903 Proper plaintiff. A derivative action to enforce a right of a limited partnership may be maintained only by a person that is a partner at the time the action is commenced and to which any of the following applies:

SB566,152,9 (1) The person was a partner when the conduct giving rise to the action occurred.

SB566,152,12 (2) The person's status as a partner devolved on the person by operation of law or pursuant to the terms of the partnership agreement from a person that was a partner at the time of the conduct.

SB566,152,14 179.0904 Pleading. In a derivative action under s. 179.0902, the complaint must state with particularity one of the following:

SB566,152,16 (1) The date and content of plaintiff's demand and the response to the demand by the general partners.

SB566,152,17 (2) Why demand should be excused as futile.

SB566,153,2 179.0905 Special litigation committee. (1) If a limited partnership is named as or made a party in a derivative proceeding, the partnership may appoint a special litigation committee to investigate the claims asserted in the proceeding and determine whether pursuing the action is in the best interests of the partnership. If the partnership appoints a special litigation committee, on motion by the committee made in the name of the partnership, except for good cause shown, the court shall stay discovery for the time reasonably necessary to permit the committee to make its investigation. This subsection does not prevent the court from doing any of the following:

SB566,153,3 (a) Enforcing a person's right to information under s. 179.0304 or 179.0407.

SB566,153,5 (b) Granting extraordinary relief in the form of a temporary restraining order or preliminary injunction.

SB566,153,7 (2) A special litigation committee must be composed of one or more disinterested and independent individuals, who may be partners.

SB566,153,8 (3) A special litigation committee may be appointed as follows:

SB566,153,10 (a) By a majority of the general partners not named as parties in the proceeding.

SB566,153,12 (b) If all general partners are named as parties in the proceeding, by a majority of the general partners named as defendants.

SB566,153,14 (4) After appropriate investigation, a special litigation committee may determine that any of the following is in the best interests of the limited partnership:

SB566,153,15 (a) That the proceeding continue under the control of the plaintiff.

SB566,153,16 (b) That the proceeding continue under the control of the committee.

SB566,153,17 (c) That the proceeding be settled on terms approved by the committee.

SB566,153,18 (d) That the proceeding be dismissed.

SB566,154,5 (5) After making a determination under sub. (4), a special litigation committee shall file with the court a statement of its determination and its report supporting its determination and shall serve each party with a copy of the determination and report. The court shall determine whether the members of the committee were disinterested and independent and whether the committee conducted its investigation and made its recommendation in good faith, independently, and with reasonable care, with the committee having the burden of proof. If the court finds that the members of the committee were disinterested and independent and that the committee acted in good faith, independently, and with reasonable care, the court shall enforce the determination of the committee. Otherwise, the court shall dissolve the stay of discovery entered under sub. (1) and allow the action to continue under the control of the plaintiff.

SB566,154,8 179.0906 Proceeds and expenses. (1) (a) Except as otherwise provided in sub. (2), any proceeds or other benefits of a derivative action, whether by judgment, compromise, or settlement, belong to the limited partnership and not to the plaintiff.