The courts could not step in and force a distribution and would not allow the

The courts could not step in and force a distribution

This preview shows page 45 - 48 out of 51 pages.

The courts could not step in and force a distribution and would not allow the members to force Lieberman to sell his interests. They recognized his dissociation but left his interest in the company intact.AACSB: Reflective ThinkingBloom's: AnalyzeBloom's: ApplyDifficulty: HardLearning Objective: 14-04 D etermine the rights of principals upon withdrawal from an LLC.Topic: Case 14.114-45
Background image
Chapter 14 - Limited Liability Partnerships, Limited Liability Companies, and Other Business ArrangementsEssay Questions71.(p. 369)Clark and Kent are attorneys and have formed an LLP. They take on various debts and obligations to operate the firm including an installment contract to purchase computers and copy machines for the office. The LLP law in their state provides for liability protection for innocent partners should another partner cause liability through a tortious act. Clark is sued by Lois for civil assault and battery after Clark improperly touches her during an office meeting to discuss her divorce in which Clark is representing her. The amount of her judgment exceeds the assets of the LLP and the LLP dissolves. What is Clark and Kent's liability for the judgment and other firm debts? State LLP laws frequently vary with respect to liability of the partners and in some states innocent partners are protected when another partner causes liability due to a tort as is the case here. Lois may sue Clark, the tortfeasor, for any part of the judgment remaining after dissolution however she cannot sue Kent as he is shielded from liability due to state LLP law. Both Clark and Kent will remain liable for any contractual debt still owed after dissolution because Kent's protections are for Clark's tortious conduct but the limits on liability do not protect him from contractual obligations.AACSB: Reflective ThinkingBloom's: AnalyzeBloom's: ApplyDifficulty: HardLearning Objective: 14-05 A rticulate the legal protections from personal liability afforded to the principals in an LLC and LLP.Topic: Liability72.(p. 371)Name some of the usual terms and conditions that a typical franchise agreement would address. The franchise agreement will usually address: (1) the term of the agreement; (2) franchise feesand payment terms; (3) territorial rights granted to the franchisee; (4) franchisor commitmentsregarding training, management support and advertising; (5) franchisee commitments to follow operating protocol; (6) royalties and fees required from the franchisee; and (7) termination and cancellation policies.AACSB: Reflective ThinkingBloom's: ApplyDifficulty: HardLearning Objective: 14-08 Recognize the utility of other business arrangements including franchise relationships and business trusts.Topic: Franchise Agreements14-46
Background image
Chapter 14 - Limited Liability Partnerships, Limited Liability Companies, and Other Business Arrangements73.(p. 369)Stop Now LLP manufactures brake linings and sells their product to repair and maintenance shops for use as replacements for worn brakes. When Stop Now approaches Coastal Garage, they offer a very good price for their products. Coastal is a nationwide company and the order would be very large. The management at Coastal is very interested in
Background image
Image of page 48

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture