Purchase of dissociated partner’s interest
(1) If a partner is dissociated from a partnership without resulting in a dissolution and winding up of the partnership business under ORS 67.290 (Events causing dissolution and winding up of partnership business), the partnership shall cause the dissociated partner’s interest in the partnership to be purchased for a buyout price determined pursuant to subsection (2) of this section.
(2) The buyout price of a dissociated partner’s interest is an amount equal to the fair value of the dissociated partner’s interest in the partnership on the date of the dissociation. If the dissociated partner has a minority interest in the partnership, the buyout price of the dissociated partner’s interest shall not be discounted as a result of such minority interest. Interest must be paid from the date of dissociation to the date of payment.
(3) Damages for wrongful dissociation under ORS 67.225 (Partner’s power to dissociate) (2) and all other amounts owing, whether or not presently due, from the dissociated partner to the partnership, must be offset against the buyout price. Interest must be paid from the date the amount owed becomes due to the date of payment.
(4) A partnership shall indemnify a dissociated partner whose interest is being purchased against all partnership liabilities, whether incurred before or after the dissociation, except liabilities incurred by an act of the dissociated partner under ORS 67.255 (Dissociated partner’s power to bind and liability to partnership). On application by the partnership or a partner made within 120 days after the date of dissociation, a court may determine that indemnification of the dissociated partner against all partnership liabilities incurred before the dissociation is not equitable based on either:
(a) The financial condition of the partnership on the date of dissociation; or
(b) The dissolution of the partnership within 60 days after the date of dissociation.
(5) If no agreement for the purchase of a dissociated partner’s interest is reached within 120 days after a written demand for payment, the partnership shall pay, or cause to be paid, in cash to the dissociated partner the amount the partnership estimates to be the buyout price and accrued interest, reduced by any offsets and accrued interest under subsection (3) of this section.
(6) If a deferred payment is authorized under subsection (8) of this section, the partnership shall tender a written offer to pay the amount it estimates to be the buyout price and accrued interest, reduced by any offsets under subsection (3) of this section, stating the time of payment and the other terms and conditions of the obligation.
(7) The payment or tender required by subsection (5) or (6) of this section must be accompanied by the following:
(a) A statement of partnership assets and liabilities as of the date of dissociation;
(b) The latest available partnership balance sheet and income statement, if any;
(c) An explanation of how the estimated amount of the payment was calculated; and
(d) Written notice that the payment is in full satisfaction of the obligation to purchase unless, within 120 days after the written notice, the dissociated partner commences an action to determine the buyout price, any offsets under subsection (3) of this section or other terms of the obligation to purchase.
(8) A partner who wrongfully dissociates before the expiration of a definite term or the completion of a particular undertaking is not entitled to payment of any portion of the buyout price until the expiration of the term or completion of the undertaking, unless the partner establishes to the satisfaction of the court that earlier payment will not cause undue hardship to the business of the partnership. A deferred payment bears interest but need not be secured unless the dissociated partner demonstrates to the satisfaction of the court that security for the deferred payment is appropriate.
(9) A dissociated partner may maintain an action against the partnership, pursuant to ORS 67.160 (Actions by partnership and partners) (3)(b)(B), to determine the buyout price of that partner’s interest, any offsets under subsection (3) of this section or other terms of the obligation to purchase. The action must be commenced within 120 days after the partnership has tendered payment or an offer to pay, or within one year after written demand for payment if no payment or offer to pay is tendered. The court shall determine the buyout price of the dissociated partner’s interest and any offset due under subsection (3) of this section and accrued interest, and enter judgment for any additional payment or refund. If deferred payment is authorized under subsection (8) of this section, the court shall also determine whether security for deferred payment is appropriate and the other terms of the obligation to purchase. The court may assess reasonable attorney fees and the fees and expenses of appraisers or other experts for a party to the action, in amounts the court finds equitable, against a party that the court finds acted arbitrarily, vexatiously or not in good faith. The finding may be based on the partnership’s failure to tender payment or an offer to pay or to comply with subsection (7) of this section. [1997 c.775 §30]
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