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| Subsection (4)(iv) is the partnership analogue of paragraph (iii) | | and is suggested by RULPA Section 402(8). It provides that a | | partnership that is a partner may be expelled if it has been | | dissolved and its business is being wound up. It is intended that | | the right of expulsion not be triggered solely by the dissolution | | event, but only upon commencement of the liquidation process. |
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| | | 6. Section 601(5) empowers a court to expel a partner if it | | determines that the partner has engaged in specified misconduct. | | The enumerated grounds for judicial expulsion are based on the | | UPA Section 32(1) grounds for judicial dissolution. The | | application for expulsion may be brought by the partnership or | | any partner. The phrase "judicial determination" is intended to | | include an arbitration award, as well as any final court order or | | decree. |
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| | | Subsection (5)(i) provides for the partner's expulsion if the | | court finds that the partner has engaged in wrongful conduct that | | adversely and materially affected the partnership business. That | | language is derived from UPA Section 32(1)(c). |
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| | | Subsection (5)(ii) provides for expulsion if the court | | determines that the partner willfully or persistently committed a | | material breach of the partnership agreement or of a duty owed to | | the partnership or to the other partners under Section 404. That | | would include a partner's breach of fiduciary duty. Paragraph | | (ii), together with paragraph (iii), carry forward the substance | | of UPA Section 32(1)(d). |
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| | | Subsection (5)(iii) provides for judicial expulsion of a | | partner who engaged in conduct relating to the partnership | | business that makes it not reasonably practicable to carry on the | | business in partnership with that partner. Expulsion for such | | misconduct makes the partner's dissociation wrongful under | | Section 602(a)(ii) and may also support a judicial decree of | | dissolution under Section 801(5)(ii). |
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| | | 7. Section 601(6) provides that a partner is dissociated upon | | becoming a debtor in bankruptcy or upon taking or suffering other | | action evidencing the partner's insolvency or lack of financial | | responsibility. |
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| | | Subsection (6)(i) is derived from UPA Section 31(5), which | | provides for dissolution upon a partner's bankruptcy. Accord | | RULPA § 402(4)(ii). There is some doubt as to whether UPA | | Section 31(1) is limited to so-called "straight bankruptcy" under | | Chapter 7 or includes other bankruptcy relief, such as Chapter | | 11. Under RUPA Section 101(2), however, "debtor in bankruptcy" |
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