CONSOLIDATED AMALGAMATED DEVELOPMENTS, LTD., A FLORIDA LIMITED PARTNERSHIP, AND JERALD P. KING, INDIVIDUALLY AND AS SOLE GENERAL PARTNER OF CONSOLIDATED AMALGAMATED DEVELOPMENTS, LTD., APPELLANTS,
v.
ALEX GUP, SAMUEL D. GILLESPIE AND F. NORBERT HECTOR, APPELLEES
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A Florida court affirmed the dissolution of a limited partnership and the priority of limited partners' claims over those of general partners for return of contributions. The court held that under the Uniform Limited Partnership Act, general partners are not entitled to creditor priority in post-dissolution distribution of partnership assets.
General partners are not entitled to creditor priority. Under § 620.23, Florida Statutes, limited partners have priority for return of their contributions over general partners, and this distribution order is mandatory and not subject to contrary agreement by the parties.
[1] Under the Uniform Limited Partnership Act, general partners are not considered creditors entitled to priority over limited partners for the return of contributions upon d…
[2] The statutory order of distribution of partnership assets upon dissolution prioritizes creditors, then limited partners for profits and capital contributions, and finally…
Previewing 2 of 4 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.
Join FLexlaw to unlock all legal intelligence“The plain language of subsection (l)(a) excepts general partners from those creditors entitled to priority.”
Establishes that the statute explicitly excludes general partners from creditor priority, resolving the core dispute
Previewing 1 of 3 key quotes on this case — the court’s exact language, pinpointed for members.
Join FLexlaw to unlock all legal intelligenceConsolidated Amalgamated Developments was a limited partnership formed under Florida law. By 1979, all partnership assets had been sold and a mortgage…
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WENTWORTH, Judge.
This is an appeal from an order dissolving the parties’ limited partnership and granting the limited partner (appellee) priority over the general partner for the return of their contributions. We affirm.
Appellants and appellees entered into a limited partnership agreement pursuant to the Uniform Limited Partnership Act. Section 620, Florida Statutes. By 1979, all of the partnership assets had been sold and a mortgage payable to the partnership was paid in full. Appellees filed a complaint seeking dissolution of the partnership, an accounting, and return of their contributions to the partnership together with their share of any profits. Appellants agreed that appellees were entitled to an accounting, but contested the dissolution and distribution. Pursuant to appellees’ motion for summary judgment, a final order was entered ordering dissolution and granting the limited partner priority over the general partner for the return of their contribution.
Appellants contend that the trial court erred in summarily deciding that they were not creditors, entitled to priority consideration in the distribution of the dissolved partnership assets under § 620.23, Florida Statutes. That section provides:
620.23 Distribution of assets.—
(1) In settling accounts after dissolution the liabilities of the partnership shall be entitled to payment in the following order:
(a) Those to creditors, in the order of priority as provided by law, except those to limited partners on account of their contributions, and to general partners,
(b) Those to limited partners in respect to their share of the profits and other compensation by way of income on their contributions,
(c) Those to limited partners in respect to the capital of their contributions,
(d) Those to general partners other than for capital and profits,
(e) Those to general partners in respect to profits,
(f) Those to general partners in respect to capital.
(2) Subject to any statement in the certificate or to subsequent agreement, limited partners share in the partnership assets in respect to their claims for profits or for compensation by way of income on their contributions respectively in proportion to the respective amounts of such claims. (e.s.)
The plain language of subsection (l)(a) excepts general partners from those creditors entitled to priority. In addition, subsection one is not subject to contrary agreement by the parties. Appellants’ contention therefore has no merit.
Affirmed.
SHIVERS and JOANOS, JJ., concur.
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Pine Grove Dev. Corp. v. Dade Sav. & Loan Ass'n, 478 So. 2d 80 (Fla. 3d DCA 1985)…a contract which establishes priorities in the [*81] distribution of limited partnership assets, as between limited and general partners, inconsistent with the statutory scheme. In accordance with Consolidated Amalgamated Developments, Ltd. v. Gup, 428 So. 2d 750 (Fla. 1st DCA), rev. denied, 438 So. 2d 832 (Fla.1983), the trial court held that section 620.23(1), Florida Statutes (1983) controls the priority of distribution of limited partnership assets among partners upon dissolution notwithstanding an agree…