John, Samuel, and Jim are general partners in the development of an electric car. Jim pours all his money into the project, but it never seems to work out. Eventually the partnership and Jim cannot meet their daily obligations, and the partnership is dissolved. Jim files for bankruptcy. If the partnership assets are insufficient to pay all claims against the partnership:
A) the trustee in bankruptcy must seek recovery of the deficiency first from John and Samuel.
B) Jim is released from liability because of the bankruptcy proceedings.
C) Jim's personal assets are not available for the partnership debts because he has limited liability.
D) the bankruptcy court must follow the doctrine of marshaling of assets.

Question

Quizplus · Accepted Answer

In a general partnership, all partners are personally liable for the debts of the partnership. If the partnership assets are insufficient, creditors can seek recovery from any of the partners, including John and Samuel.

John, Samuel, and Jim Are General Partners in the Development