Identifying the Facts and Issues

Partnerships are a

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association of individuals and are formed by

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of the partners. When Short signed the lease agreement with IKON for office equipment, Short, Gonzaga, and Baker

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still a partnership.

Assessment question

When a partnership becomes

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to operate, because it can only be operated at a loss,

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of the partnership may be appropriate. Winding up is the process of collecting, liquidating, and distributing the partnership assets. The obligations of winding up includes

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and accounting to each partner for the value of his or her interest in the partnership. Generally, partners are

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for all partnership obligations.

Assessment question

All partners in a partnership

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be held liable even if a particular partner did not participate in$,$ know about, or ratify the conduct that gave rise to a lawsuit against the partnership. A judgment against one partner severally

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extinguish the others$$ liability. Therefore, Short

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recover the amount equal to Gonzaga$$s share of the debt to IKON.

Assessment question

In addition to debts and obligations, a partner

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receive reimbursement for expenses incurred in the process of winding up a partnership. Settling debts

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a part of winding up a partnership. Short

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be able to recover Gonzaga$$s share of the attorney$$s fees related to settling the IKON debt.

Assessment question

What If the Facts Were Different?

Assume that Dwayne Short used partnership assets to lease IKON office equipment for his own personal trucking business and not for the general partnership named $$Relo Now.$$ While the $$Relo Now$$ partnership was winding up$,$ Short sought partial reimbursement from Serkan Gonzaga for the lease.

The lease

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signed in furtherance of the $$Relo Now$$ partnership. Short will be liable

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for the lease. As a result, Short

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be able to recover costs from Gonzaga.