(1) In settling accounts between the partners after dissolution, the following rules shall be observed, subject to any agreement to the contrary:
(a) The assets of the partnership are:
The partnership property;
The contributions of the partners, as limited by paragraph (d) of this subsection (1),necessary for the payment of all the liabilities specified in paragraph (b) of this subsection (1).
(b) The liabilities of the partnership shall rank in order of payment, as follows:
Those owing to creditors other than a partner;
Those owing to partners other than for capital and profits;(III) Those owing to partners in respect of capital; (IV) Those owing to partners in respect of profits.
The assets shall be applied in the order of their declaration in paragraph (a) of thissubsection (1) to the satisfaction of the liabilities.
The partners shall contribute the amount necessary to satisfy the liabilities as provided by section 7-60-118 (1)(a) and as limited by said section and sections 7-60-115 and 760-134; but if any but not all of the partners are insolvent or, not being subject to process, refuse to contribute, the other partners shall contribute their share of the liabilities and, in the relative proportions in which they share the profits, the additional amount necessary to pay the liabilities.
An assignee for the benefit of creditors or any person appointed by the court shallhave the right to enforce the contributions specified in paragraph (d) of this subsection (1).
Any partner or legal representative of a partner shall have the right to enforce thecontributions specified in paragraph (d) of this subsection (1), to the extent of the amount that the partner has paid in excess of the partner's share of the liability.
The individual property of a deceased partner shall be liable for the contributionsspecified in paragraph (d) of this subsection (1).
When partnership property and the individual properties of the partners are in possession of a court for distribution, partnership creditors shall have priority on partnership property and separate creditors on individual property, saving the rights of lien or secured creditors as heretofore.
Where a partner has become bankrupt or the estate of a partner is insolvent, the claims against the partner's separate property shall rank in the following order:
Those owing to separate creditors;
Those owing to partnership creditors;
Those owing to partners by way of contributions.
Source: L. 31: p. 669, § 40. CSA: C. 123, § 40. CRS 53: § 104-1-40. C.R.S. 1963: § 104-1-40. L. 95: (1)(a) and (1)(d) amended, p. 781, § 9, effective May 24. L. 2004: (1)(f) and IP(1)(i) amended, p. 1430, § 95, effective July 1.