Question

A client of the CPA firm of Harston and Mendez is a medical practice of seven local doctors. One doctor has been sued for several million dollars as the result of a recent operation. Because of what appears to be this doctor's very poor judgment, a patient died. Although that doctor was solely involved with the patient in question, the lawsuit names the entire practice as a defendant. Originally, four of these doctors formed this business as a general partnership. However, five years ago, the partners converted the business to a limited liability partnership based on the laws of the state in which they operate.

Read the following articles as well as any other published information that is available on partner and partnership liability:

“Partners Forever? Within Andersen, Personal Liability May Bring Ruin,” The Wall Street Journal, April 2, 2002, p. C1.

“Collapse: Speed of Andersen's Demise Amazing,” Milwaukee Journal Sentinel, June 16, 2002, p. D1.

Required

Based on the facts presented in this case, answer these questions:

1.	What liability do the other six partners in this medical practice have in connection with this lawsuit?
2.	What factors will be important in determining the exact liability (if any) of these six doctors?

Answer 1

1)

Liability of the Partners in Limited Liability Partnership:

Limited liability partnership is a form of partnership in which partners are only responsible for their own act or act of the individuals under their supervision. Under the given situation, a patient died due to negligence of one doctor.As it is a limited liability partnership now, only that doctor and not all six will suffer lawsuit.

2)

In order to determine the exact liability of six partners, the following factors should be considered:

• The responsibility of the act of negligence need to be determined
• The partnership should be clearly converted into limited liablity form the grneral partnership.
• In that case, only the partner who was responsible for the act will face lawsuit.