A provisional distribution made by a partnership or limited partnership before its dissolution and winding up. The partnership must decide to make the distribution. Dissociation alone creates no right to receive one.
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How its tested
Common Examples
6
Limited Partnership Withholds Distribution
Ivy Investments, a limited partnership, receives a large cash payment from a successful project. The general partner decides against any distribution until after the project closes. Limited partner Idris Ives dissociates from the firm. Ives demands an immediate payout. The partnership refuses because it never decided to make an interim distribution.
General Partnership Declines Early Payout
Iris Energy, a general partnership, earns quarterly profits. The partners vote against any distribution while they negotiate a new contract. Partner Ines Ibarra leaves the firm. Ibarra claims a right to her share of the profits. The remaining partners correctly deny the claim because no interim distribution was authorized.
Isaiah Ishikawa owns coastal property. A state statute bars all development for an interim period while regulators study erosion. Ishikawa sues claiming a taking. The court examines whether the temporary restriction denies all economically viable use during that period.
Lucas v. South Carolina Coastal Council505 U.S. 1003 (1992)
In 1986, petitioner David H. Lucas purchased two residential lots on the Isle of Palms in Charleston County, South Carolina, for $975,000. He intended to construct single-family homes on the parcels, which at the time were zoned for such use and required no building permit for development. No portion of the lots qualified as a critical area under then-existing coastal zone legislation.
Subsequently, in 1988, the South Carolina Legislature enacted the Beachfront Management Act. The legislation established a baseline and prohibited construction of occupable improvements seaward of a line drawn 20 feet landward of that baseline, directly affecting Lucas's parcels by barring any permanent habitable structures.
Lucas filed an action in the Court of Common Pleas alleging that the Act's restrictions effected a taking of his property without just compensation. Following a bench trial, the court determined that the prohibition rendered the lots valueless and ordered the state to pay just compensation in the amount of $1,232,387.50.
The Supreme Court of South Carolina reversed the trial court's judgment. It accepted the legislature's findings that new construction threatened public resources and concluded that a regulation designed to prevent serious public harm could not constitute a taking.
The United States Supreme Court granted certiorari to review the South Carolina Supreme Court's decision.
Ilana Isaacs and her partner marry in one state. While litigation over nationwide recognition proceeds, the couple lives in a state that withholds full marital benefits. The court later extends recognition retroactively, resolving the interim denial of rights.
Obergefell v. Hodges576 U.S. 644 (2015)
The petitioners were fourteen same-sex couples and two men whose same-sex partners were deceased. They lived in Michigan, Kentucky, Ohio, and Tennessee. Those states defined marriage as a union between one man and one woman under their constitutions and statutes.
The petitioners filed suits in federal district courts in their home states. They sought marriage licenses or recognition of marriages lawfully performed elsewhere. James Obergefell and John Arthur traveled from Ohio to Maryland to marry aboard a medical transport plane because Arthur suffered from ALS; Obergefell later sought to be listed as surviving spouse on Arthur's death certificate. April DeBoer and Jayne Rowse, Michigan nurses, adopted three children but could not both serve as legal parents under state adoption rules. Army Reserve Sergeant Ijpe DeKoe and Thomas Kostura married in New York before DeKoe's deployment to Afghanistan and later settled in Tennessee.
Each district court ruled in the petitioners' favor. The respondents appealed. The Sixth Circuit consolidated the cases and reversed the district court judgments. The petitioners sought certiorari, which the Supreme Court granted.
Same-sex couples had begun establishing families after substantial cultural and political developments in the late twentieth century. Earlier litigation had addressed the legal status of gays and lesbians, including challenges that reached the Supreme Court in Bowers v. Hardwick and Lawrence v. Texas.
Irene Ingalls is tried on criminal charges. The prosecution offers a statement whose admissibility remains unsettled under the confrontation clause. The trial court admits the statement on an interim basis. The appellate court later clarifies the standard and remands for a new determination.
Crawford v. Washington541 U.S. 36 (2004)
On August 5, 1999, Michael Crawford stabbed Kenneth Lee in the torso during a confrontation at Lee's apartment.
Crawford and his wife Sylvia had gone there after Sylvia alleged that Lee had attempted to rape her several weeks earlier. Lee was taken to the hospital and later died from his wounds. Police arrested both Crawford and Sylvia that night.
Detectives gave Miranda warnings and interrogated Sylvia twice at the station house. In her recorded statement Sylvia initially denied involvement but eventually admitted she had led Crawford to Lee's apartment and had seen the stabbing. Crawford also gave police a statement describing the events and his belief that Lee may have reached for something before the stabbing. At trial Crawford asserted self-defense, but Sylvia did not testify because of Washington's marital privilege.
The State offered Sylvia's tape-recorded statement as evidence that the stabbing was not in self-defense and invoked the hearsay exception for statements against penal interest. The trial court admitted the statement after finding it bore particularized guarantees of trustworthiness. The jury convicted Crawford of assault. The Washington Court of Appeals reversed after applying a nine-factor test and concluding the statement lacked sufficient indicia of reliability.
The Washington Supreme Court reinstated the conviction. It determined that Sylvia's statement interlocked with Crawford's statement and therefore bore adequate guarantees of trustworthiness, noting that both accounts were ambiguous on whether Lee had possessed a weapon. The United States Supreme Court granted certiorari.
Idina Iverson challenges a nuclear plant licensing procedure. The agency issues an interim rule while it develops a final regulation. The court reviews whether the interim measure satisfies statutory requirements during the period before the permanent rule takes effect.
Vermont Yankee Nuclear Power Corp. v. Nat. Res. Def. Council, Inc.467 U.S. 837, 843, 104 S. Ct. 2778, 2781, 81 L. Ed. 2d 694 (1984)
In 1967 the Atomic Energy Commission granted Vermont Yankee a construction permit for a nuclear power plant in Vernon, Vermont, after the required adjudicatory hearing and reviews. Vermont Yankee later applied for an operating license; NRDC intervened and objected to exclusion of fuel-reprocessing and waste-disposal impacts from the hearing. In November 1972 the Commission opened a separate rulemaking proceeding on those fuel-cycle issues, noticed two alternative approaches based on its Environmental Survey, and conducted a February 1973 hearing at which more than forty participants submitted comments but no discovery or cross-examination occurred. In April 1974 the Commission adopted a rule assigning numerical values to fuel-cycle impacts and applied it prospectively.
In January 1969 Consumers Power applied for permits to build two nuclear reactors in Midland, Michigan. After staff and ACRS review, Saginaw and Mapleton intervened and raised 119 environmental contentions, including seventeen on energy conservation. The Licensing Board held hearings on radiological issues, the staff issued a final environmental impact statement in March 1972, and further hearings occurred in May and June 1972; Saginaw declined to participate in the later hearings or submit proposed findings. The Licensing Board granted the construction permit, the Appeal Board affirmed, and the Commission declined further review. In November 1973 the Commission ruled in another case that energy-conservation evidence meeting threshold tests could be considered, but it later refused Saginaw's motion to reopen the Consumers Power record.
NRDC appealed the Vermont Yankee license and rule to the D.C. Circuit; Saginaw and others appealed the Consumers Power permit. In 1976 the Court of Appeals remanded both matters, holding the fuel-cycle rulemaking procedures inadequate, the Consumers Power environmental impact statement defective for omitting energy conservation, and the ACRS report insufficiently explained. The Supreme Court granted certiorari in 1977.
The Commission is the successor agency to the Atomic Energy Commission under the Energy Reorganization Act of 1974. All licensing proceedings followed the two-stage process of construction permit followed by operating license under the Atomic Energy Act of 1954, with NEPA environmental reviews added after 1969.
Does dissociation alone give a partner the right to demand a distribution?
No. Under the uniform acts, a partner's dissociation does not entitle the person to a distribution. The partnership must separately decide to make an interim distribution before any right arises.
Supporting sources
When may a partnership make an interim distribution?
A partnership may make an interim distribution only when it decides to do so before dissolution and winding up. The decision triggers the right to receive the distribution in accordance with the applicable sharing rules.
Supporting sources
What remedies does a partner have once entitled to an interim distribution?
Once entitled to receive the distribution, the partner or transferee obtains the status of a creditor of the partnership with respect to that distribution and may pursue all creditor remedies.
Supporting sources
410 U.S. 113 (1973)
…have regarded that event with less interest and have tended to focus either upon conception, upon live birth, or upon the interim point at which the fetus becomes "viable," that is, potentially able to live outside the mother's womb, albeit with artificial aid. Viability is usually placed at about seven…