{"data":{"id":"us-ky/krs-362.1-701","jurisdiction":"us-ky","citation":"KRS 362.1-701","heading":"Purchase of dissociated partner's interest.","body":"(1) If a partner is dissociated from a partnership without resulting in a dissolution and\nwinding up of the partnership business under KRS 362.1 -801, then the partnership\nshall cause the dissociated partner's interest in the partnership to be purchased for a\nbuyout price determined pursuant to subsection (2) of this section.\n(2) The buyout price of a dissociated partner's interest is the amount that would have\nbeen distributable to the dissociating partner under KRS 362.1-807(2) if, on the date\nof dissociation, the assets of the partnership were sold at a price equal to the greater\nof the liquidation value or the value based on a sale of the entire business as a going\nconcern without the dissociated partner and the partnership were wound up as of\nthat date. Interest shall be paid from the date of dissociation to the date of payment.\n(3) Damages for wrongful dissociation under KRS 362.1 -602(2), and all other amounts\nowing, whether or not presently due, from the dissociated partner to the partnership,\nshall be offs et against the buyout price. Interest shall be paid from the date the\namount owed becomes due to the date of payment.\n(4) A partnership shall indemnify a dissociated partner whose interest is being\npurchased against all partnership liabilities, whether inc urred before or after the\ndissociation, except liabilities incurred by an act of the dissociated partner under\nKRS 362.1-702.\n(5) If no agreement for the purchase of a dissociated partner's interest is reached within\none hundred twenty (120) days after a w ritten demand for payment, then the\npartnership shall pay, or cause to be paid, in cash to the dissociated partner the\namount the partnership estimates to be the buyout price and accrued interest,\nreduced by any offsets and accrued interest under subsection (3) of this section.\n(6) If a deferred payment is authorized under subsection (8) of this section, then the\npartnership may tender a written offer to pay the amount it estimates to be the\nbuyout price and accrued interest, reduced by any offsets under su bsection (3) of\nthis section, stating the time of payment, the amount and type of security for\npayment, and the other terms and conditions of the obligation.\n(7) The payment or tender required by subsection (5) or (6) of this section shall be\naccompanied by the following:\n(a) A statement of partnership assets and liabilities as of the date of dissociation;\n(b) The latest available partnership balance sheet and income statement, if any;\n(c) An explanation of how the estimated amount of the payment was calcul ated;\nand\n(d) Written notice that the payment is in full satisfaction of the obligation to\npurchase unless, within one hundred twenty (120) days after the written\nnotice, the dissociated partner commences an action to determine the buyout\nprice, any offset s under subsection (3) of this section, or other terms of the\nobligation to purchase.\n(8) A partner who wrongfully dissociates before the expiration of a definite term or the\ncompletion of a particular undertaking is not entitled to payment of any portion of\nthe buyout price until the expiration of the term or completion of the undertaking,\nunless the partner establishes to the satisfaction of the court that earlier payment\nwill not cause undue hardship to the business of the partnership. A deferred\npayment shall be adequately secured and bear interest.\n(9) A dissociated partner may maintain an action against the partnership, pursuant to\nKRS 362.1-405(2)(b)2., to determine the buyout price of that partner's interest, any\noffsets under subsection (3) of this section, or other terms of the obligation to\npurchase. The action shall be commenced within one hundred twenty (120) days\nafter the partnership has tendered payment or an offer to pay or within one (1) year\nafter written demand for payment if no payment or  offer to pay is tendered. The\ncourt shall determine the buyout price of the dissociated partner's interest, any offset\ndue under subsection (3) of this section, and accrued interest, and enter judgment\nfor any additional payment or refund. If deferred pay ment is authorized under\nsubsection (8) of this section, then the court shall also determine the security for\npayment and other terms of the obligation to purchase. The court may assess\nreasonable attorney's fees and the fees and expenses of appraisers or other experts\nfor a party to the action, in amounts the court finds equitable, against a party that the\ncourt finds acted arbitrarily, vexatiously, or not in good faith. The finding may be\nbased on the partnership's failure to tender payment or an offer to  pay or to comply\nwith subsection (7) of this section.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=34498","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:58:57Z","sha256":"262b84c000a88d772116352840c9027c75f89ee2117869a897077fa8ab51e6cd","source_id":"us-ky","stale":false,"prev":"us-ky/krs-362.1-603","next":"us-ky/krs-362.1-702"},"notice":"GroundRules: Original legal text. Not legal advice."}