Unformatted text preview: Court of Appeals, Plaintiff wins; Ruling Reversed Supreme Court, Defendant wins, Ruling from appellate court Reveresed Reason: An incoming partner is not liable at all for preexisting debt. When an new partner is allowed in, the old partnership is terminated and a new one is created. The creditors of the new partnership take precedence over all the old creditors. As a result of Doris Leibowitz not signing or guaranteeing payment of the note, she is not liable to having to pay the note back. She cannot be liable as an incoming partner for a preexisting debt. The interest that had accrued on the account was interest on a note that was a preexisting debt. Rule of Law: A new partner is not personally liable for preexisting debt including interest on a preexisting note. Ms. Leibowitz was an incoming partner which left made her not liable to cover all the charges from the note and the interest that had accrued....
View Full Document
This note was uploaded on 05/06/2010 for the course BUAD Buad 381 taught by Professor Proctor during the Spring '10 term at Morgan.
- Spring '10
- Business Law