Doney & Associates PLC Home Page
 Doney & Associates PLC

Conditions of use ∑ Every effort has been made to reproduce the code accurately.  However there could be errors which would change the effect of the code.  Permission to use these materials is given only on the condition that the user will be solely responsible for verifying the accuracy of the information contained herein.x

Text size ∑ You may adjust the size of the text from your browser's control bar: View, Text Size.

Printing ∑ If the top menu bar stays at the top of the window as you scroll in your browser, return the browser to the top of the page before printing or the menu bar may obscure some text.  You may print selected pages of the web page by printing from File, Page Preview instead of Print.  More printing tips.

Annotations ∑ We have added notes linking to cases and other information to some sections of the code.  You may chose to or the annotations.

Redline Display ∑ The Bankruptcy Code shown is as amended by The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. You may choose to or the redline version showing the changes made by the act.

Link to the Code ∑ You may link your web page directly to this version of the code, or to any subsection.  More link information.


Chapter 7.  Liquidation

Subchapter II.  Collection, Liquidation, and Distribution of the Estate

11 USC ß 723.  Rights of partnership trustee against general partners

(a) If there is a deficiency of property of the estate to pay in full all claims which are allowed in a case under this chapter concerning a partnership and with respect to which a general partner of the partnership is personally liable, the trustee shall have a claim against such general partner to the extent that under applicable nonbankruptcy law such general partner is personally liable for such deficiency.

(b) To the extent practicable, the trustee shall first seek recovery of such deficiency from any general partner in such partnership that is not a debtor in a case under this title. Pending determination of such deficiency, the court may order any such partner to provide the estate with indemnity for, or assurance of payment of, any deficiency recoverable from such partner, or not to dispose of property.

(c) Notwithstanding section 728(c) [sic--Section 728 was deleted by BAPCPA] of this title, the trustee has a claim against the estate of each general partner in such partnership that is a debtor in a case under this title for the full amount of all claims of creditors allowed in the case concerning such partnership. Notwithstanding section 502 of this title, there shall not be allowed in such partnerís case a claim against such partner on which both such partner and such partnership are liable, except to any extent that such claim is secured only by property of such partner and not by property of such partnership. The claim of the trustee under this subsection is entitled to distribution in such partnerís case under section 726(a) of this title the same as any other claim of a kind specified in such section.

(d) If the aggregate that the trustee recovers from the estates of general partners under subsection (c) of this section is greater than any deficiency not recovered under subsection (b) of this section, the court, after notice and a hearing, shall determine an equitable distribution of the surplus so recovered, and the trustee shall distribute such surplus to the estates of the general partners in such partnership according to such determination.

[Rev. 5-20-05]