Martin, Mark, and Marvin formed a retail clothing partnership named M Clothiers and conducted a business for many years, buying most of their clothing from Hill, a wholesaler

Category:

Martin, Mark, and Marvin formed a retail clothing partnership named M Clothiers and conducted a business for many years, buying most of their clothing from Hill, a wholesaler

0
0

Martin, Mark, and Marvin formed a retail clothing partnership named M Clothiers and conducted a business for many years, buying most of their clothing from Hill, a wholesaler. On January 15, Marvin retired from the business, but Martin and Mark decided to continue it. As part of the retirement agreement, Martin and Mark agreed in writing with Marvin that Marvin would not be responsible for any of the partnership debts, either past or future. On January 15, the partnership published a notice of Marvin’s retirement in a newspaper of general circulation where the partnership carried on its business. Before January 15, Hill was a creditor of M Clothiers to the extent of $10,000, and on January 30, he extended additional credit of $5,000. Hill was not advised and did not in fact know of Marvin’s retirement and the change of the partnership. On January 30, Ray, a competitor of Hill, extended credit for the first time to M Clothiers in the amount of $3,000. Ray also was not advised and did not in fact know of Marvin’s retirement and the change of the partnership. On February 1, Martin and Mark departed for parts unknown, leaving no partnership assets with which to pay the described debts. What is Marvin’s liability, if any,
 
(a) to Hill?

Martin, Mark, and Marvin formed a retail clothing partnership named M Clothiers and conducted a business for many years, buying most of their clothing from Hill, a wholesaler. On January 15, Marvin retired from the business, but Martin and Mark decided to continue it. As part of the retirement agreement, Martin and Mark agreed in writing with Marvin that Marvin would not be responsible for any of the partnership debts, either past or future. On January 15, the partnership published a notice of Marvin’s retirement in a newspaper of general circulation where the partnership carried on its business. Before January 15, Hill was a creditor of M Clothiers to the extent of $10,000, and on January 30, he extended additional credit of $5,000. Hill was not advised and did not in fact know of Marvin’s retirement and the change of the partnership. On January 30, Ray, a competitor of Hill, extended credit for the first time to M Clothiers in the amount of $3,000. Ray also was not advised and did not in fact know of Marvin’s retirement and the change of the partnership. On February 1, Martin and Mark departed for parts unknown, leaving no partnership assets with which to pay the described debts. What is Marvin’s liability, if any,
 
(b) to Ray?

Explanation & AnswerSolution by a verified expert

Explanation

Based on Section 703(a) and Section 703(b) of the Revised Uniform Partnership Act, any debts held by the partnership before dissociation of one of the partners shall be divided with the dissociating partner as well.
It is also necessary that the lender should not have the knowledge of dissociation and believes that the partnership is continued in its original state.
Since all the conditions have been met in the case, Individual MV shall pay $15,000 to Individual H.

Verified Answer

As per Section 703(a) and 703(b) of Revised Uniform Partnership Act and Uniform Partnership Act, Individual MV is bound to pay $15,000 to Individual H.

Purchase this answer to view it. $5
Login/Sign up for free, load your wallet instantly using PayPal or cards and purchase this solution to view it.


Get Help With Your Assignments

Place your order now and get a quality plagiarism-free paper via email.

Write My Paper For Me