Confidential information typically requires that the firm treat thatinformation as secretiveThat the information would somehow be protected by the firm and keep the information out of the hands of otherBut the information is not confidential because it could be obtained by other peopleRemoval of FilesNot breach of fiduciary duty because BAM retained copies of the files
Removal of files was customary among attorneys so this was not a breachThe files contained the attorneys’ own workPartnership agreement was silentFinancial AttributesoPartnership Accounting A capital account tracks each partner’s ownership claim against the partnership. The claim is determined by the following:Contributionsmade by each partner to the partnershipEach partner’s share of profits or lossesfrom partnership operationsAny withdrawalsof funds from the partnership and Each partner’s gains or losses upon sale of the partnership or its assets. If selling partnership: must pay out loans first, then surplus goes to partners.Capital account balance does not reflect the true value of that partner’s ownership interest in the partnershipWhat is given by the accountants has nothing to do w/the intrinsic value of the asset, almost 100% of the timeConsult an expert to get the intrinsic valueoSharing Profits and Losses Among PartnersThe allocation of profits and losses is determined by each partner’s interest in the partnership RUPA 807 :Assets of partnerships pay liabilities in following order:creditors (not partners)partner creditor$ owed to partner for repayment of capital$ owed for remaining profits. oLiability of Partners to Third PartiesIn a general partnership, the liability rules revolve around the possibility of partner a’s actions serve to bind partner b to that third partyControl feature in partnerships rests in one partner’s ability to monitor other partnersPartners therefore are assumed to a large extent to authorize their co-partner’s transactions relative to the partnership business and third partiesA partner is an agent to the partnershipIs apparently authorized to represent the partnership in ordinaryaffairsOrdinary affairsDefined by the agreementIn the scope of your partnershipLook at what it is the partnership is engaged in regularlyShould Partner B be personally liable or should the partnership be liable as an entity?
Today most people think of partnerships as separate legal entitiesAs its own business entityTwo BIG PrinciplesPersonal liability“All partners are liable jointly and severally for all obligations of the partnership unless otherwise agreed by the claimant or provided by law.”RUPA §306(a)ExhaustionThe judgment creditor of a partnership may not satisfy the judgment from a partner’s assets unless there is also a judgment against the partner