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Cengage Advantage Books: Law for Business 19th Edition by John Ashcroft,Katherine Ashcroft,Martha Patterson
Edition 19ISBN: 978-1305654921Cengage Advantage Books: Law for Business 19th Edition by John Ashcroft,Katherine Ashcroft,Martha Patterson
Edition 19ISBN: 978-1305654921 Exercise 20
Business Organization
Gary Beach and Paul Touradji formed a limited partnership called Playa Oil and Gas, LP for the purpose of exploring oil and gas prospects. Touradji's company, DeepRock Venture Partners, LP held an 80 percent ownership interest in the partnership and contributed the start-up capital. Beach controlled the remaining 20 percent through two different entities, and contributed his rights to titles and interests in certain gas and oil leases and exploration opportunities to the partnership. After an unsuccessful drilling attempt, each partner began to feel the other was missing good business opportunities and withholding information. As their business relationship fell apart, Beach proposed making a distribution to all partners, which DeepRock opposed. Despite this, Beach took approximately half of Playa Oil and Gas's cash on hand and distributed it to the partners. The distribution made it difficult for Playa Oil and Gas to meet its financial obligations and effectively made the company insolvent. DeepRock sued Beach on behalf of Playa Oil and Gas, alleging among other things, that Beach breached his fiduciary duty to the partnership. Did Beach act in the best interest of the partnership by making the distribution? [ Beach Capital Partnership, LP v. DeepRock Venture Partners, LP , 442 S.W.3d 609 (Tex. App.)]
Gary Beach and Paul Touradji formed a limited partnership called Playa Oil and Gas, LP for the purpose of exploring oil and gas prospects. Touradji's company, DeepRock Venture Partners, LP held an 80 percent ownership interest in the partnership and contributed the start-up capital. Beach controlled the remaining 20 percent through two different entities, and contributed his rights to titles and interests in certain gas and oil leases and exploration opportunities to the partnership. After an unsuccessful drilling attempt, each partner began to feel the other was missing good business opportunities and withholding information. As their business relationship fell apart, Beach proposed making a distribution to all partners, which DeepRock opposed. Despite this, Beach took approximately half of Playa Oil and Gas's cash on hand and distributed it to the partners. The distribution made it difficult for Playa Oil and Gas to meet its financial obligations and effectively made the company insolvent. DeepRock sued Beach on behalf of Playa Oil and Gas, alleging among other things, that Beach breached his fiduciary duty to the partnership. Did Beach act in the best interest of the partnership by making the distribution? [ Beach Capital Partnership, LP v. DeepRock Venture Partners, LP , 442 S.W.3d 609 (Tex. App.)]
Explanation
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Partnership:
A partnership firm is crea...
Cengage Advantage Books: Law for Business 19th Edition by John Ashcroft,Katherine Ashcroft,Martha Patterson
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