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Archive for for August, 2017

Does Texas Hold a Partner Liable for a Partnership Debt? (Part II)

August 31, 2017

In American Star Energy and Minerals Corporation v. Stowers, [1] four partners formed a general partnership called S & J Investments (“S&J”) to invest in oil and gas properties.  S & J contracted with American Star Energy and Minerals Corporation (“American”) to operate these properties.  Later, American sued S & J for breach of contract, which resulted in a final judgment in the amount of $227,884.46 against S & J in 2008.

S & J was undercapitalized and unable to satisfy the judgment debt.… Read the rest

Does Texas Hold a Partner Liable for a Partnership Debt? (Part I)

August 30, 2017

You might have seen in our previous blog series on general partnership, where we talked about what general partnership is and why it is vital for business owners to know about it.  In essence, we wrote that, despite the advent of limited liability companies (LLCs), business owners frequently form a general partnership, oftentimes without even realizing it.  Generally, partners in a general partnership are jointly and severally liable, and each partner is personally and individually liable for the entire amount of all partnership obligations.Read the rest

Can Others Hold Me Liable as a Partner, When I Am Not a Partner? (Part III)

August 29, 2017

Branscome v. Schoneweis

In Branscome v. Schoneweis, Schoneweis and Woodrum, who were brothers-in-law, were associated with the operation of a live stockyard called Tallula Cattle Company (“Tallula”). [1] Schoneweis was the owner since he provided the initial working capital and Woodrum was the manager who was entitled to an equal share of commissions on the sale of all cattle of the live stockyard which was a market agency business. At the same time, both men continued as individuals in the business of buying and selling livestock in commerce (dealer business).… Read the rest

Can Others Hold Me Liable as a Partner, When I Am Not a Partner? (Part II)

August 28, 2017

Cox Enterprises, Inc. v. Filip

In Cox Enterprises, Inc. v. Filip, Filip was the owner of Trans Texas Properties and Elliott was not. [1] One of its employees filled out a credit application to obtain newspaper advertising services for the business and falsely listed Elliott as an owner. [2] The employee had no authority to make such representation and Elliott did not hold himself out to the advertising company as having any ownership interest. [3] The advertising company relied on the employee’s representation that Elliott was an owner and rendered its services to the business on credit, but made no effort to verify the accuracy of the representation.… Read the rest

Can Others Hold Me Liable as a Partner, When I Am Not a Partner? (Part I)

August 25, 2017

This blog will discuss the challenges of Partnership by Estoppel.

Partner refers to a variety of business relationships such as co-owners, collaborators, coworkers, business associates, and even suppliers and customers, etc.  We explained in our previous blog on general partnership, it is not the label, but the intent to do what in law creates a partnership (agreement to share profits, right to participate in the control of the business, etc.), that controls the question of whether there is a general partnership. … Read the rest

The Dangers of Joint Representation Part 3

August 24, 2017

In today’s blog, we will address conflict of interest in a joint representation.

If you and your business partner still plan on hiring the services of one lawyer, you will be pleased to know that the existence of a conflict of interest does not necessarily disqualify a lawyer from representing more than one client in the same transaction.  But it is something that needs to be addressed by considering all the facts and circumstances.

# 1 The lawyer needs to determine whether a conflict of interest exists and, if so, whether it can be waived by the clients’ informed consent.Read the rest

The Dangers of Joint Representation (Part 2)

August 23, 2017

In this post, we will discuss why every client needs to have his or her own lawyer.

It may not be readily apparent to most non-lawyers (and even some lawyers), but in every case or matter where a lawyer represents more than one person, there is potential for a conflict of interest. This means the representation of one client will be directly adverse to another client or there is a significant risk that the representation will be materially limited by the lawyer’s responsibilities to another client.… Read the rest

The Dangers of Joint Representation (Part 1)

August 22, 2017

Are you getting the best counsel?  Who is looking out for you and your best interest?  If you are involved in a multi-party business transaction, the lawyer involved may or may not be looking out for you and your economic interest.  Read on to learn more.

Previously we discussed in our blogs about business divorce and we pointed to some of the most common situations that lead to a business break-up, including divorce, disability, death, and disagreement. In addition, we discussed what business owners can do to protect their businesses in the event of a business breakup.… Read the rest

All postings are intended to be planning tools to familiarize readers with some of the high-level issues discussed therein. No posting is intended to be a comprehensive discussion and additional details should be discussed with your transaction planners including attorneys, accountants, consultants, bankers and other business planners who can provide advice for your circumstances. This article should not be treated as legal advice to any person or entity.