Nevada § 87.4346 - Purchase of dissociated partner's interest

§ 87.4346. 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 NRS 87.4351 , the partnership shall cause the dissociated partner's interest in the partnership

to be purchased for a buyout price determined pursuant to subsection 2. 2. The buyout price of a dissociated partner's interest is the amount that would have

been distributable to the dissociating partner under subsection 2 of NRS 87.4357 if, on the date of dissociation, the assets of the partnership were sold at a price

equal to the greater of the liquidation value or the value based on a sale of the

entire business as a going concern without the dissociated partner and the partnership

were wound up as of that date. Interest must be paid from the date of dissociation to the date of payment. 3. Damages for wrongful dissociation under subsection 2 of NRS 87.4344 , 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 NRS 87.4347 . 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. 6. If a deferred payment is authorized under subsection 8, the partnership may 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, stating the time of payment,

the amount and type of security for payment and the other terms and conditions of

the obligation. 7. The payment or tender required by subsection 5 or 6 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 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 must be adequately secured and bear interest. 9. A dissociated partner may maintain an action against the partnership, pursuant

to subparagraph (2) of paragraph (b) of subsection 2 of NRS 87.4337 , to determine the buyout price of that partner's interest, any offsets under subsection

3 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 1 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,

any offset due under subsection 3 and accrued interest, and enter judgment for any

additional payment or refund. If deferred payment is authorized under subsection 8, the court shall also determine

the security for payment and other terms of the obligation to purchase. The court may assess reasonable attorney's 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.