Initially, upon the filing of the bankruptcy petition, the debtor partner's transferable interest in the partnership will pass to the bankruptcy trustee as property of the estate under Section 541(a)(1) of the Bankruptcy Code, notwithstanding any restrictions on transfer provided in the partnership agreement. In most Chapter 7 cases, that will result in the eventual buyout of the partner's interest.

The application of various provisions of the federal Bankruptcy Code to Section 601(6)(i) is unclear. In particular, there is uncertainty as to the validity of UPA Section 31(5), and thus its RUPA counterpart, under Sections 365(e) and 541(c)(1) of the Bankruptcy Code. Those sections generally invalidate so- called ipso facto laws that cause a termination or modification of the debtor's contract or property rights because of the bankruptcy filing. As a consequence, RUPA Section 601(6)(i), which provides for a partner's dissociation by operation of law upon becoming a debtor in bankruptcy, may be invalid under the Supremacy Clause. See, e.g., In the Matter of Phillips, 966 F.2d 926 (5th Cir. 1992); In re Cardinal Industries, Inc., 105 B.R. 385 (Bankr. S.D. Ohio 1989), 116 B.R. 964 (Bankr. S.D. Ohio 1990); In re Corky Foods Corp., 85 B.R. 903 (Bankr. S.D. Fla. 1988). But see, In re Catron, 158 B.R. 629 (E.D. Va. 1993) (partnership agreement could not be assumed by debtor under Bankruptcy Code § 365(c)(1) because other partners excused by UPA from accepting performance by or rendering performance to party other than debtor and buyout option not invalid ipso facto clause under Code § 365 (e)), aff'd per curiam, 25 F.3d 1038 (4th Cir. 1994). RUPA reflects the policy choice, as a matter of state partnership law, that a partner be dissociated upon becoming a debtor in bankruptcy.

Subsection (6)(ii) is new and provides for dissociation upon a general assignment for the benefit of a partner's creditors. The UPA says nothing about an assignment for the benefit of creditors or the appointment of a trustee, receiver, or liquidator. Subsection (6)(iii) and (iv) cover the latter and are based substantially on RULPA Section 402(4) and (5).

8. UPA Section 31(4) provides for the dissolution of a partnership upon the death of any partner, although by agreement the remaining partners may continue the partnership business. RUPA Section 601(7)(i), on the other hand, provides for dissociation upon the death of a partner who is an individual, rather than dissolution of the partnership. That changes existing law, except in those States previously adopting a similar non-uniform provision, such as California, Georgia, and