Fact Pattern 3-3
Bryn, Cornell, and Duke are general partners in Equity Lending, a consumer credit, mortgage, and investment firm. Their agreement states that it is a breach of the agreement for any partner to assign his or her interest to a creditor without the consent of the other partners.
-Refer to Fact Pattern 3-3.Cornell's assignment of his interest in Equity Lending to Financial Consultants Corporation results in
A) nothing with respect to Cornell or Equity Lending.
B) the automatic termination of Equity Lending's legal existence.
C) Cornell's liability for all of Equity Lending's debts.
D) Cornell's wrongful dissociation and liability for any damages.

Question

Fact Pattern 3-3
Bryn, Cornell, and Duke are general partners in Equity Lending, a consumer credit, mortgage, and investment firm. Their agreement states that it is a breach of the agreement for any partner to assign his or her interest to a creditor without the consent of the other partners.
-Refer to Fact Pattern 3-3.Cornell's assignment of his interest in Equity Lending to Financial Consultants Corporation results in
A) ​nothing with respect to Cornell or Equity Lending.
B) ​the automatic termination of Equity Lending's legal existence.
C) ​Cornell's liability for all of Equity Lending's debts.
D) ​Cornell's wrongful dissociation and liability for any damages.

Quizplus · Accepted Answer

Cornell's assignment of his interest in Equity Lending to Financial Consultants Corporation is a breach of the partnership agreement. This breaches Cornell's duty of loyalty and can result in wrongful dissociation. As a result, Cornell is liable for any damages caused by this dissociation. Equity Lending can continue to exist unless the partnership agreement provides for automatic termination in the event of such a breach.

Fact Pattern 3-3 Bryn, Cornell, and Duke Are General Partners in Equity Lending