1. (a) An act of a person that immediately before a conversion or merger became effective was a partner in a converting or constituent partnership binds the converted or surviving organization after the conversion or merger becomes effective, if:

   1. (1) before the conversion or merger became effective, the act would have bound the converting or constituent partnership under Section 10A-8A-3.01; and

   2. (2) at the time the third party enters into the transaction, the third party:

      1. (A) does not have notice of the conversion or merger; and
      2. (B) reasonably believes that the converted or surviving organization is the converting or constituent partnership and that the person is a partner in the converting or constituent partnership.

2. (b) An act of a person that before a conversion or merger became effective was dissociated as a partner from a converting or constituent partnership binds the converted or surviving organization after the conversion or merger becomes effective, if:

   1. (1) before the conversion or merger became effective, the act would have bound the converting or constituent partnership under Section 10A-8A-3.01 if the person had been a partner; and

   2. (2) at the time the third party enters into the transaction, the third party:

      1. (A) does not have notice of the dissociation;
      2. (B) does not have notice of the conversion or merger; and
      3. (C) reasonably believes that the converted or surviving organization is the converting or constituent partnership and that the person is a partner in the converting or constituent partnership.

3. (c) If a person having knowledge of the conversion or merger causes a converted or surviving organization to incur an obligation under subsection (a) or (b), the person is liable:

   1. (1) to the converted or surviving organization for any damage caused to the organization arising from the obligation; and
   2. (2) if another person is liable for the obligation, to that other person for any damage caused to that other person arising from the liability.

(Act 2018-125, §7.)