New Jersey § 42:1a-34

§ 42:1a-34.

a. If a partner is dissociated from a partnership without resulting in a dissolution

and winding up of the partnership business under section 39 of this act, 1 except as otherwise provided in the partnership agreement, the partnership shall

cause the dissociated partner's interest in the partnership to be purchased for a

buyout price as determined pursuant to subsection b. of this section. b. As used in subsection a. of this section, “ buyout price ” means the fair value as of the date of withdrawal based upon the right to share

in distributions from the partnership unless the partnership agreement provides for

another fair value formula. c. Damages for wrongful dissociation under subsection b. of section 32 of this act, 2 and all other amounts owing, whether or not presently due, from the dissociated partner

to the partnership, shall be offset against the buyout price. Interest shall be paid from the date the amount owed becomes due to the date of

payment. d. 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 section 35

of this act. 3 e. 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 c. of this section. f. If a deferred payment is authorized under subsection h. of this section, 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 c. of this section, stating

the time of payment, the amount and type of security for payment, and the other terms

and conditions of the obligation. g. The payment or tender required by subsection e. or f. of this section shall be

accompanied by the following: (1) a statement of partnership assets and liabilities as of the date of dissociation; (2) the latest available partnership balance sheet and income statement, if any; (3) an explanation of how the estimated amount of the payment was calculated; and (4) 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 c. of this section,

or other terms of the obligation to purchase. h. 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 shall be adequately secured and bear interest. i. A dissociated partner may maintain an action against the partnership, pursuant

to subparagraph (b) of paragraph (2) of subsection b. of section 25 of this act, 4 to determine the buyout price of that partner's interest, any offsets under subsection

c. of this section, or other terms of the obligation to purchase. The action shall 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,

any offset due under subsection c. of this section, and accrued interest, and enter

judgment for any additional payment or refund. If deferred payment is authorized under subsection h. of this section, 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 shall be based on the partnership's failure to tender payment or an

offer to pay or to comply with subsection g. of this section. 1

N.J.S.A. § 42:1A-39. 2

N.J.S.A. § 42:1A-32. 3

N.J.S.A. § 42:1A-35. 4

N.J.S.A. § 42:1A-25.