Part 9- Partnerships, Chapter 39: Partners’ Dissociation and Partnerships’ Dissolution and Winding Up, Doc 5

Here are summaries and key analyses for the partnership law issues raised: 1. Horizon/CMS Healthcare Corp. Dissolution Request  Horizon sought judicial dissolution of its partnership with Southern Oaks Health Care, citing irreconcilable differences. Generally, courts may grant dissolution if differences substantially impair the ability to operate. If a court views Horizon’s claim as a proper ground for judicial dissolution, it likely won’t be seen as wrongful dissociation. Otherwise, Horizon could be liable for damages due to wrongful dissociation. 2. Costa vs. Borges Partnership Breach  Costa alleged that Borges breached their oral partnership by stopping work on a land development project. For Costa’s claim to succeed, the court would need to find that Borges breached his agreed obligations. Given Borges’s failure to contribute labor or hire replacement help, Costa may have a valid claim. However, oral agreements and partnership terms may complicate the enforcement. 3. Shoemaker Partnership Buyout and Payment Delay  Harley Shoemaker requested his buyout following withdrawal. Although their partnership agreement allowed appraisal for value, Don’s failure to pay within 90 days violated the agreement. The court may rule that Don owes Harley the appraised value, potentially with accrued interest or a share of post-withdrawal profits, as the delay impacted Harley’s rightful financial interests. 4. Korda's Liability on Mortgage After Dissociation  After Korda’s dissociation from K2 Solutions, she notified Commerce Bank, but Kim’s new LLC defaulted on the mortgage. Since Commerce Bank did not respond or release Korda, her liability could persist due to implied continuation of her financial responsibility. The bank’s acceptance of KOne’s payments doesn’t necessarily release Korda unless explicitly acknowledged. 5. Seehousen, Herbst, and Hilly’s Liability Post-Withdrawal  The former partners of Labrum & Doak LLP did not notify creditors of their withdrawal, exposing them to liability under Pennsylvania law, which holds partners accountable for partnership obligations until proper notice is given. Consequently, they might be liable for malpractice claims against the LLP that arose post-withdrawal due to insufficient notification. 6. Barnes’ Liability on NMB’s Bank Loans  Although Barnes retired from NMB Associates LLP, he remains liable for pre-retirement obligations, including bank loans, because neither the LLP nor the bank released him from this debt. His liability would be similar in a general partnership, where retiring partners typically retain liability for prior debts unless expressly released by creditors. 7. Senatre and Lewellen’s Lease Liability After Relocation  When they moved the bar and formed Tavern Associates II LLC, Senatre and Lewellen remained liable on the original lease, as transferring assets to a new LLC did not terminate their obligations under the original lease with Graham Financial. Therefore, their personal liability likely continued unless they negotiated a formal release with the landlord. 8. Creel's Partnership Interest Valuation After Death  Upon Joe Creel’s death, his wife is entitled to the value of his partnership interest, calculated as 52% of the partnership’s value. Given the partnership valuation and debts to be settled, Creel’s interest would be calculated from the net partnership assets after creditor obligations. 9. Seth Weinberg’s Liability on the Times Square Stationers Lease  As an LLP partner, Seth would generally not be liable for the lease obligations incurred before his entry. However, his liability may differ in a general partnership where new partners sometimes inherit prior obligations. In an LLP, Seth’s liability is limited, but he may still assume personal liability for lease obligations if he signed a guarantee upon joining. 10. Lemon, Clarkson, and Boysen’s Liability Arrangements for New and Retiring Partners  To avoid liability issues for new and retiring partners, they should draft provisions in their partnership agreement, including: o A clause limiting new partners’ liability for pre-existing debts. o A clear release procedure for departing partners from future obligations. o Buyout terms that address valuation and payout timing. Research Task: Complex Partnership Agreements on Dissociation and Dissolution  Review of partnership agreements on platforms like Onecle reveals detailed provisions on dissociation and dissolution, often more specific and less ambiguous than RUPA’s default rules. Many agreements outline precise valuation methods for partner buyouts, such as fixed multipliers of profits or asset appraisals, reducing disputes over valuation and improving clarity for all partners involved.