Chapter 16 – Partnerships: Liquidation
16–41
P16-19 Matching
1.
G
2.
D
3.
A
4.
J
5.
K
6.
C
7.
E
8.
B
9.
H
10.
I
Chapter 16 – Partnerships: Liquidation
16–42
P16-20 Partnership Agreement Issues [AICPA Adapted]
Part A:
1.
Y
The admission of a new partner requires the consent of all existing partners.
2.
Y
The withdrawal of a partner causes the dissolution of the partnership. But a
termination and liquidation can be avoided by having the other partners
agree to continue the partnership and buy out Coke’s partnership interest.
3.
Y
A third-party beneficiary is not a party to a contract, but is a beneficiary of it.
4.
N
The liability of a withdrawing partner may be limited by an agreement
between the partners, but that agreement is not binding on third parties
unless they join in on the agreement.
5.
Y
A partner may retire at any time if there is no specified term of existence or
undertaking for the partnership.
Part B:
6.
Y
A new partner is personally liable for all partnership debts incurred
subsequent to entry into the partnership.
7.
Y
Continuation of the partnership does not release the partnership from the
liabilities existing prior to the admission of the new partner.
8.
Y
White is liable for debts prior to his admission only to the extent of his capital
contribution.
9.
N
As in item 8, White is liable for pre-existing debts only to the extent of his
capital contribution.
10.
N
A partner may disassociate at any time there is no specified term of
existence for the partnership, and there is no minimum time period before a
partner is subject to personal liability for the partnership’s obligations incurred
while a partner.
Chapter 16 – Partnerships: Liquidation
16–43
Case 16-5: Mattfield v. Kramer Brothers 2005 MT 126 N
A copy of the Montana Supreme Court’s decision is on the following eight pages. Supreme
Court cases are within the public domain and can be printed verbatim without requesting
Chapter 16 – Partnerships: Liquidation
16–44
No. 03-796
IN THE SUPREME COURT OF THE STATE OF MONTANA
2005 MT 136N
GREG MATTFIELD and CLINTON KRAMER, as Permanent
Clerk
Chapter 16 – Partnerships: Liquidation
16–45
Justice Jim Rice delivered the Opinion of the Court.
¶1 Pursuant to Section I, Paragraph 3(c), of the Montana Supreme Court 1996 Internal
Operating Rules, the following decision shall not be cited as precedent. It shall be filed as a
cattle.
Chapter 16 – Partnerships: Liquidation
16–46
¶7 In 1985 Bill determined to disassociate from the Partnership, and requested distribution
of his interest under the Revised Uniform Partnership Act (RUPA).a Thereafter, Raymond,
Doug, Ray, and Don, albeit limited in his management responsibilities due to a
neuropsychological functioning impairment resulting from a car accident in 1984, continued