Question 1

An investor, a writer, an actor, a professional athlete, and a food critic formed a general partnership to own and operate a high-end bistro. Each partner made a capital contribution. The investor contributed $250,000 cash. The writer, actor, and athlete each contributed $50,000 cash, respectively. The food critic contributed $30,000 cash. The written partnership agreement did not address the allocation of management authority among the partners. Soon after forming the partnership, the partners sought to hire a general manager to run the bistro. After taking applications and conducting interviews, the partners narrowed the field down to four candidates: a business-school graduate, a bartender, an executive chef, and a mixologist. The partners could not agree which of the four to hire, so they held a meeting and took a vote. The investor voted to hire the business-school graduate. The writer, actor, and athlete all voted to hire the mixologist. The food critic voted to hire the executive chef. These events occurred in a jurisdiction that follows the Uniform Partnership Act.

Which candidate will be the bistro's new general manager?

Question 2 

A graphic-design firm was organized as a general partnership with five partners. At one point, the founding partner sold her transferable interest in the partnership to an investor. Among the firm's employees was one junior designer, who had worked on various projects for all five partners. One day, the partners held a meeting to decide whether to admit the junior designer as a partner of the firm. The investor also attended the meeting. The firm's partnership agreement did not address admission of a new partner to the firm. The five partners all agreed that the junior designer should be made a partner in exchange for an equity buy-in at a favorable price, which the junior designer was ready, willing, and able to pay. The investor, however, was opposed to making the junior designer a partner. These events occurred in a jurisdiction that follows the Uniform Partnership Act.

May the junior designer be made a partner of the firm?

Question 3

A retired mine foreman and an investor formed a limited partnership with each other to own and operate a coal mine. The foreman was the general partner, and the investor was the limited partner. The foreman oversaw all aspects of the coal mine's operations; the investor simply shared in the mine's profits and losses and made capital contributions. The limited partnership's primary coal customer was a nearby coal-fired power plant. The limited partnership was so profitable that the investor purchased a second coal mine in a neighboring state. The investor's new coal mine solicited orders from many of the same buyers who purchased coal from the limited partnership, including the coal-fired power plant. These events occurred in a jurisdiction that follows the Uniform Limited Partnership Act.

Which fiduciary duty to the limited partnership has the investor violated, if any?

Question 4

An investor and a real-estate developer formed a general partnership to purchase, improve, and sell real estate. The governing partnership agreement provided that no partner could purchase or sell real estate on the partnership's behalf without the other partner's consent. This restriction was set forth in a statement of partnership authority filed with the appropriate state official. A certified copy of the statement was properly recorded in the appropriate office for land records. Sometime later, without the investor's knowledge, the developer contracted to sell a parcel of the partnership's real estate to a buyer. The buyer did not know of the partnership agreement's contents.

Is the developer's contract with the buyer binding on the partnership?

Question 5

After several business losses, a partnership made up of 12 partners voted for dissolution. One of the partners, an accountant, wanted judicial supervision of the partnership's winding up, but most of the others disagreed. The accountant spoke to an heir, who had been the recipient of a retired partner's transferable interests in the partnership. The accountant also spoke to the personal representative of an engineer, another partner in the business. The heir stated that he favored judicial supervision. The engineer's representative said that the engineer also favored judicial supervision. The relevant jurisdiction followed the 1997 version of the Uniform Partnership Act.

In general, who has standing to petition a court for judicial supervision of the partnership's winding up?

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Question 1 Based on the scenario provided the bistros new general manager would be the businessschoo... View the full answer