(a) In winding up its activities and affairs, a limited partnership shall apply the limited partnership’s assets, including the contributions required by this section, to discharge the limited partnership’s obligations to creditors, including partners that are creditors.
Terms Used In Tennessee Code 61-3-810
Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
Person: means an individual, business corporation, nonprofit corporation, partnership, limited partnership, limited liability company, cooperative association, unincorporated nonprofit association, statutory trust, business trust, common-law business trust, estate, trust, association, joint venture, public corporation, government or governmental subdivision, agency, or instrumentality, or any other legal or commercial entity. See Tennessee Code 61-3-101
(b) After a limited partnership complies with subsection (a), any surplus must be distributed in the following order, subject to any charging order in effect under § 61-3-703:
(1) 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; and(2) Among persons owning transferable interests in proportion to their respective rights to share in distributions immediately before the dissolution of the limited partnership.(c) If a limited partnership’s assets are insufficient to satisfy all of its obligations under subsection (a), with respect to each unsatisfied obligation incurred when the limited partnership was not a limited liability limited partnership, the following applies:
(1) Each person that was a general partner when the obligation was incurred and that has not been released from the obligation under § 61-3-607 shall contribute to the limited partnership for the purpose of enabling the limited 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;(2) If a person does not contribute the full amount required under subdivision (c)(1) with respect to an unsatisfied obligation of the limited partnership, the other persons required to contribute by subdivision (c)(1) 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; and(3) If a person does not make the additional contribution required by subdivision (c)(2), further additional contributions are determined and due in the same manner as provided in subdivision (c)(2).(d) A person that makes an additional contribution under subdivision (c)(2) or (3) may recover from any person whose failure to contribute under subdivision (c)(1) or (2) necessitated the additional contribution. A person shall not recover under this subsection (d) more than the amount additionally contributed. A person’s liability under this subsection (d) must not exceed the amount the person failed to contribute.(e) If a limited partnership does not have sufficient surplus to comply with subdivision (b)(1), any surplus must be distributed among the owners of transferable interests in proportion to the value of the respective unreturned contributions.(f) All distributions made under subsections (b) and (c) must be paid in money.
