4.__Contribution for losses after settlement.__After the settlement of accounts, each partner shall contribute, in the proportion in which the partner shares partnership losses, the amount necessary to satisfy partnership obligations that were not known at the time of the settlement and for which the partner is personally liable under section 1034.

5.__Deceased partner's estate liable.__The estate of a deceased partner is liable for the partner's obligation to contribute to the partnership.

6.__Enforcement for creditors.__An assignee for the benefit of creditors of a partnership or a partner, or a person appointed by a court to represent creditors of a partnership or a partner, may enforce a partner's obligation to contribute to the partnership.

Comment

(This is Section 807 of the Uniform Partnership Act (1997).)

1. Section 807 provides the default rules for the settlement of accounts and contributions among the partners in winding up the business. It is derived in part from UPA Sections 38(1) and 40.

2. Subsection (a) continues the rule in UPA Section 38(l) that, in winding up the business, the partnership assets must first be applied to discharge partnership liabilities to creditors. For this purpose, any required contribution by the partners is treated as an asset of the partnership. After the payment of all partnership liabilities, any surplus must be applied to pay in cash the net amount due the partners under subsection (b) by way of a liquidating distribution.

RUPA continues the "in-cash" rule of UPA Section 38(1) and is consistent with Section 402, which provides that a partner has no right to receive, and may not be required to accept, a distribution in kind, unless otherwise agreed. The in-cash rule avoids the valuation problems that afflict unwanted in-kind distributions.

The partnership must apply its assets to discharge the obligations of partners who are creditors on a parity with other