Common use of Priority on Liquidation Clause in Contracts

Priority on Liquidation. Upon dissolution of the Partnership, the General Partner shall, to the extent feasible, proceed to wind up the affairs and liquidate the assets of the Partnership, allowing a reasonable time for the process of winding up and liquidation so as to minimize the losses that would normally be incidental to such a process. The proceeds of such liquidation shall be applied first, to the payment of the matured debts and liabilities of the Partnership (other than amounts owing in respect of Partner Loans) and the costs and expenses of dissolution and liquidation of the Partnership; second, to the payment of amounts owing in respect of Partner Loans; third, to the setting up of any reserves which the General Partner may deem reasonably necessary for contingent, unmatured or unforeseen liabilities of the Partnership; and fourth, to pay distributions to the Partners in proportion and to the extent of any positive balances in their Capital Accounts (after crediting or charging each Partner's Capital Account for the Partner's share of all Profit or Loss and Gain or Loss on Disposition accrued through the date of such payment).