Question: Jake Coombs Yemi Ogarra and Wade Stram formed a financial

Jake Coombs, Yemi Ogarra, and Wade Stram formed a financial services consulting partnership. The partnership's ordinary business was to provide investment advice to businesses with assets between $500,000 and $40,000,000. The partnership operated from a small building that was owned by the partnership, even though title was held in the name of Yemi Ogarra, who had transferred the building to the partnership as her capital contribution. Because the partnership quickly became profitable, the partners chose to retain some of the earnings of the business and to invest it in commercial real estate in the community.
Such investments, however, were not part of the partnership's regular business, which remained financial consulting. Title to investment property purchased by the partnership was held in the partnership's name. After a few years, the partners had a falling out. Ogarra wanted the partnership to move its offices to a bigger, more impressive building. She also believed that the commercial real estate market was in a bubble and that the partnership should sell some of its investment property. Without obtaining approval from her partners, Ogarra sold the building in which the partnership did its business to CFC Financial LLC. Because the building was titled only in Ogarra's name, CFC believed that she was the only person with an interest in the building. Ogarra also sold to CFC a commercial shopping mall that had been held by the partnership for investment. Title in the mall had been recorded in the partnership's name. Coombs and Stram sued to void the sales of the building and mall to CFC on the grounds that Ogarra had no authority to sell the properties. Were they right?

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  • CreatedJuly 16, 2014
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