805 ILCS 206/701
2021 Illinois Compiled Statutes|Chapter 805 - BUSINESS ORGANIZATIONS|805 ILCS 206/ - Uniform Partnership Act (1997).|Article 7 - Partner's Dissociation When Business Not Wound Up

Sec. 701.     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 801 of this Act, 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 Section 807(b) 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 Section 602(b), 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 702.(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).(f) If a deferred payment is authorized under subsection (h), 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), 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) 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), 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 Section  405(b)(2)(ii), to determine the buyout price of that partner's interest, any  offsets under subsection  (c), 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), 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).    (Source: P.A. 92-740, eff. 1-1-03.)