Joe R Notified His Partners in Writing That He Would Be

question 134

Multiple Choice

Joe R. notified his partners in writing that he would be retiring from the business partnership at the end of 2011. It was acknowledged and agreed upon and, at year end, the remaining partners paid him for his interest in the partnership. In February of 2012, one of the remaining partners misapplied some trust funds that a long-time client had placed in the care of the partnership for the purchase of a hotel. The partnership was sued, but the assets of the partnership were not sufficient to satisfy the judgment. The successful plaintiff went against the personal assets of the partners, including those of Joe R. What is the likely outcome?

• A) Joe R. is only liable for his share of the losses even if the other partners don't have the assets to pay.
• B) Joe R. is not liable since he was not a partner when the misapplication happened.
• C) Joe R. is not liable because he had retired from the partnership at year end and had properly notified his partners.
• D) Joe R. is not liable because he had had nothing whatsoever to do with the misapplication of the trust money.
• E) Joe R. is liable if he failed to give proper notice to outsiders, namely, the long-time client whose funds were misapplied.

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Definitions:

Roosevelt Administration

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A period in the 1930s characterized by severe dust storms that damaged the ecology and agriculture of the US and Canadian prairies.

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A term originally used to describe residents of Oklahoma during the Dust Bowl era, it now refers broadly to people who migrated from the central United States during economic hardships.

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A decade marked by the Great Depression, affecting economies worldwide with severe economic downturns, high unemployment rates, and significant social and political impacts.