Reference no: EM131626245

Adam is a limited partner and Steve and Mimi are general partners of Total Financial Management, LP. Adam believes he could do a better job than Steve and Mimi based on his financial acumen. Adam abstains from active involvement but sometimes offers Steve and Mimi general advice, in private, in all aspects of the partnership business.

The partnership is in default of a bank loan. When the bank learns of this arrangement, it sues Adam individually, along with the partnership, Steve, and Mimi and attempts to hold Adam personally liable for his financial loss based on an alleged breach of contract.

Under these facts, can Adam be found personally liable for the loss or is there a legal principle, which affords him a degree of protection?

Assume Steve is sued on a personal, non-partnership line of credit, but his personal assets are shielded to such an extent that he cannot (and will not) pay the judgment. Is there a method by which the Bank can use Steve's partnership interest to satisfy the judgment?

What filing requirements are required for a limited partnership? How is this different from general partnership formation?

Partnerships

Assume that Mimi brought her seven-year-old daughter, Beelzebub, into the office one day, after day care, because no one but Mimi was available to interview a client. Beelzebub went out on an unsecured deck and fell off it due to a loose railing and sustained back and leg injuries.
Does Mimi's husband (suing as Beelzebub's guardian) have valid claim on behalf of Beelzebub against the partnership?

Assuming a judgment was entered against the partnership in favor of Beelzebub, what are the chances of a successful partnership indemnification claim against Mimi?