Francis, Ricky, and Andrew had opened a bakery in partnership. During the course of their partnership, Ricky had taken a loan of $25,000 from Ryan for personal purposes which he defaulted. Ryan could obtain a(n) _____ from the court to secure his loan, directing the partnership to pay Ryan the distribution that Ricky would normally receive.
A) doctrine of estoppel
B) charging order
C) order of relief
D) proof of claim
E) performance bond

Question

Quizplus · Accepted Answer

A charging order is a court order that directs a partnership to pay the creditor (Ryan) the distribution that a defaulting partner (Ricky) would normally receive. The other options do not apply to this scenario. The doctrine of estoppel pertains to the legal principle where a party is prevented from taking a contrary position to one that has been established as true. Order of relief is a term used in bankruptcy proceedings. Proof of claim is the document that a creditor submits to claim a share of the assets of a debtor. A performance bond is a type of guarantee issued by a third party to ensure the completion of a project.

Francis, Ricky, and Andrew Had Opened a Bakery in Partnership