Directions: Read the fact pattern below.

Read the questions following the facts and answer both in approximately 250 words, Make sure you explain and defend your answers. Look at all alternative viewpoints prior to answering the questions. You may use your textbook and any other outside research you see necessary to completely answer the questions.

Facts: Eric Forman formed a limited partnership with his father-in-law, Bob Pinciotti, to open a fondue restaurant in the town of Point Place. Eric was the general partner and owned 75% of the business. Mr. Pinciotti, with 25% ownership, was the limited partner and invested $100,000. After one year, difficulties in the restaurants operation caused business to drop off, and Eric called Mr. Pinciotti for advice. After hearing of the difficulties, Mr. Pinciotti became concerned with the security of his investment. He took off of work and spent two days observing the restaurant operations. The two partners then decided to launch a large and expensive television ad campaign to increase flagging sales. Mr. Pinciotti designed the campaign with the help of Groovy Advertising, a local ad agency. There was an immediate increase in sales when the commercials first aired; however, volume quickly and significantly declined once again. Finally, three months after the ad campaign was launched, the restaurant closed its doors. The restaurant closed with debts totaling $400,000 and assets of only $200,000. The debt included $150,000 owed to Groovy Advertising, who sought payment directly from Mr. Pinciotti since the partnership did not have sufficient cash or other assets to pay the debt. Mr. Pinciotti claimed that his liability was limited to the $100,000 invested in the restaurant and refused to pay any additional money. Groovy Advertising sued the limited partnership, as well as Eric Forman and Bob Pinciotti individually Questions:

1. Did Mr. Pinciotti forfeit his limited partnerstatus by hiring Groovy Advertising?

2. Is Mr. Pinciotti liable for the outstanding debts of the limited partnership