(805 ILCS 215/1111)
Sec. 1111. Liability of general partner after conversion or merger.
(a) A conversion or merger under this Article does not discharge any liability under Sections 404 and 607 of a person that was a general partner in or dissociated as a general partner from a converting or constituent limited partnership, but:
(1) the provisions of this Act pertaining to the
collection or discharge of the liability continue to apply to the liability;
(2) for the purposes of applying those provisions,
the converted or surviving organization is deemed to be the converting or constituent limited partnership; and
(3) if a person is required to pay any amount under
this subsection:
(A) the person has a right of contribution from
each other person that was liable as a general partner under Section 404 when the obligation was incurred and has not been released from the obligation under Section 607; and
(B) the contribution due from each of those
persons is in proportion to the right to receive distributions in the capacity of general partner in effect for each of those persons when the obligation was incurred.
(b) In addition to any other liability provided by law:
(1) a person that immediately before a conversion or
merger became effective was a general partner in a converting or constituent limited partnership that was not a limited liability limited partnership is personally liable for each obligation of the converted or surviving organization arising from a transaction with a third party after the conversion or merger becomes effective, if, at the time the third party enters into the transaction, the third party:
(A) does not have notice of the conversion or
merger; and
(B) reasonably believes that:
(i) the converted or surviving business is
the converting or constituent limited partnership;
(ii) the converting or constituent limited
partnership is not a limited liability limited partnership; and
(iii) the person is a general partner in the
converting or constituent limited partnership; and
(2) a person that was dissociated as a general
partner from a converting or constituent limited partnership before the conversion or merger became effective is personally liable for each obligation of the converted or surviving organization arising from a transaction with a third party after the conversion or merger becomes effective, if:
(A) immediately before the conversion or merger
became effective the converting or surviving limited partnership was not a limited liability limited partnership; and
(B) at the time the third party enters into the
transaction less than two years have passed since the person dissociated as a general partner and the third party:
(i) does not have notice of the dissociation;
(ii) does not have notice of the conversion
or merger; and
(iii) reasonably believes that the converted
or surviving organization is the converting or constituent limited partnership, the converting or constituent limited partnership is not a limited liability limited partnership, and the person is a general partner in the converting or constituent limited partnership.
(Source: P.A. 93-967, eff. 1-1-05.)
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Last modified: February 18, 2015