Legal Question in Business Law in Texas

Re: partnership and fileing bankruptcy

Yes, it is. Partners are jointly liable for partnership debts. Since the one partner has filed for bankruptcy, any partnership debts look to your brother's estate for payment.

Also partners in a general partnership are personally liable for partnership debts. That's why most businesses are corporations, LLC's or Limited Partnerships.

Re: partnership and fileing bankruptcy

The existence of a partnership (here assumed to be a fifty-fifty general partnership) makes

your brother's estate liable for any unpaid partnership obligations, this is why your

brother's estate is embroiled in the bankruptcy matter. The former partner's ownership of

another company may or may not be relevant, if the bankruptcy is a personal bankruptcy then

the ownership interest in the other company will have to be considered as an asset of the

bankruptcy estate.

If the above assumptions are correct, then the inclusion of the Minnesota company in the

bankruptcy estate may make it possible for the bankruptcy estate to pay a larger share of

the Texas partnership obligations. Under the best of circumstances, continuing to assume

a fifty-fifty general partnership, your brother's estate will still be liable for payment

of one-half of the unpaid liabilities after liquidation of and application of all of the

partnership assets. If there is an excess of assets over liabilites in the liquidation

of the partnership, then your brother's estate will be entitled to one half of the excess.

Re: partnership and fileing bankruptcy

Generally more than 50% of partners must approve a partnership bankruptcy, if the partnership agreement is silent about it. It would seem that the estate should have participated in the decision to put the partnership into bankruptcy. Also if the living partner has another company in the same business it might not be a bad idea to investigate whether business that should have been in the partnership is now directed to the remaing partners other business. I am from Minnesota and in fact have a non resident law license there as well as being licensed in Texas. If you need a Minn. lawyer I may be able to recommend one to you if the remianing partner is in the Twin Cities area. -Larry Maun 713-266-2560