N.Y. Partnership Law § 71: Rules for distribution

§ 71. Rules for distribution. 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,

II. The contributions of the partners specified in paragraph (d) of

this subdivision.

(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,

IV. Those owing to partners in respect of profits.

(c) The assets shall be applied in the order of their declaration in

clause (a) of this paragraph to the satisfaction of the liabilities.

(d) Except as provided in subdivision (b) of section twenty-six of

this section: (1) partners shall contribute, as provided by section

forty, subdivision one, the amount necessary to satisfy the liabilities;

and (2) 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 paragraph (d) of this subdivision.

(f) Any partner or his legal representative shall have the right to

enforce the contributions specified in paragraph (d) of this

subdivision, to the extent of the amount which he has paid in excess of

his share of the liability.

(g) The individual property of a deceased partner shall be liable for

the contributions specified in paragraph (d) of this subdivision.

(h) When partnership property and the individual properties of the

partners are in the 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 as heretofore.

(i) Where a partner has become bankrupt or his estate is insolvent the

claims against his separate property shall rank in the following order:

I. Those owing to separate creditors,

II. Those owing to partnership creditors,

III. Those owing to partners by way of contribution.