Proceeds of Sale of Property After Dissolution of Partnership Not “Profits”

The Second Department determined that the appreciation in the value of commercial real estate owned by a partnership after the date of dissolution did not constitute “profits” within the meaning of Partnership Law 73:

Partnership Law § 73 provides, in relevant part, “[W]hen any partner retires or dies, and the business is continued . . . he or his legal representative . . . shall receive as an ordinary creditor an amount equal to the value of his interest in the dissolved partnership with interest, or, at his option or at the option of his legal representative, in lieu of interest, the profits attributable to the use of his right in the property of the dissolved partnership.” * *

…[T]he Appellate Division, [4th] Department, held that the plaintiff’s share of the fair market value of a parcel of real property was fixed as of the date the partnership dissolved, and thus determined that the profits the plaintiff was entitled to in that case did not include increases in the value of real property after the date of dissolution. Here, since the partnership dissolved on April 12, 2000, the plaintiffs were not entitled to a share in the appreciation of partnership assets after that date… . Breidbart v Wiesenthal, 2013 NY Slip Op 05040, 2nd Dept 7-3-13