Vermont § 3261 - Purchase of dissociated partner’s interest

§ 3261. Purchase of dissociated partner’s interest

• (a) If a partner is dissociated from a partnership without resulting in a dissolution
  and winding up of the partnership business under section 3271 of this title, the partnership shall cause the dissociated partner’s interest in the partnership
  to be purchased for a buyout price determined pursuant to subsection (b) of this section. (b) The buyout price of a dissociated partner’s interest is the amount that would have
  been distributable to the dissociating partner under subsection 3277(b) of this title, 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. (c) Damages for wrongful dissociation under subsection 3252(b) of this title, 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. (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 3262 of this title. (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 must 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
  must be adequately secured and bear interest. (i) A dissociated partner may maintain an action against the partnership, pursuant to
  subdivision 3235(b)(2)(B) of this title, 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 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, 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 may be based on the partnership’s failure to tender payment or an offer to
  pay or to comply with subsection (g) of this section. (Added 1997, No. 149 (Adj. Sess.), § 1, eff. Jan. 1, 1999.)