Opinion ID: 2284361
Heading Depth: 4
Heading Rank: 2

Heading: Unfinished Business Under Election to Liquidate Partnership

Text: If a partner insists on liquidation, then the line of demarcation for determining the amount owing to the respective partners, D.C.Code § 41-137(a), is not dissolution but completion of winding up the partnership's business. Between dissolution and that point, the fiduciary obligation of each partner to account to the partnership for any benefit, and hold as a trustee for it any profits derived by him without the consent of the other partners from any transaction connected with the ... conduct, or liquidation of the partnership, continues in force. Id. § 41-120 (emphasis added). The Partnership Act specifically grants a winding up partner the power to bind the partnership after dissolution by any act appropriate for ... completing transactions unfinished at dissolution. Id. § 41-134(a)(1). It follows that any profits derived from completion of such unfinished business inure to the partnership's benefit, even if received after dissolution. On the basis of these principles, other courts confronted with dissolution of law partnerships have held that pending cases are uncompleted transactions requiring winding up after dissolution, and are therefore assets of the partnership subject to post-dissolution distribution. See, e.g., Ellerby v. Speizer, 138 Ill.App.3d 77, 80-81, 92 Ill.Dec. 602, 605, 485 N.E.2d 413, 416 (1985); Jewel v. Boxer, 156 Cal.App.3d 171, 178-79, 203 Cal.Rptr. 13, 18 (1984); Rosenfeld, Meyer & Susman v. Cohen, 146 Cal. App.3d 200, 216-17, 194 Cal.Rptr. 180, 189-90 (1983); Resnick v. Kaplan, 49 Md.App. 499, 508, 434 A.2d 582, 587 (1981); In re Mondale & Johnson, 150 Mont. 534, 437 P.2d 636 (1968); Frates v. Nichols, 167 So.2d 77, 81 (Fla.Dist.Ct.App.1964). The reason is that dissolution does not terminate or discharge pre-existing contracts between the partnership and its clients, and ex-partners who perform under such contracts do so as fiduciaries for the benefit of the dissolved partnership. See Ellerby, supra, 138 Ill.App.3d at 80-81, 92 Ill.Dec. at 605, 485 N.E.2d at 416; Resnick, supra, 49 Md.App. at 506-07, 434 A.2d at 587; Rosenfeld, supra, 146 Cal.App.3d at 216-17, 194 Cal.Rptr. at 190-91. Fees received are to be shared regardless of which former partner provides services in the case after dissolution. Jewel, supra, 156 Cal.App.3d at 174, 203 Cal.Rptr. at 15.