Question

Mary, Janet and Shantil formed a partnership, Brookdale Senior Care (BSC), to provide temporary housing and general care for elderly people in Memphis, Tennessee. One of the temporary residents left the stove on and burned down the house, which resulted in the loss of the entire building and contents. One of the residents, Francine, sued BSC and obtained a judgment of $ 30,000 against it, but the partnership could not pay the judgment.

• What are Francine’s options if the Brookdale partnership cannot pay the $30,000?
• Assuming Janet has the funds in her savings account, will Francine be successful if she tries to collect the entire debt from Janet?
• What are Janet’s options if Francine sues her for the entire debt?

Answer 1

Francine can sue Brookdale against its assets if partnership can not pay 30,000. She can claim for all the assets that make her get up to 30,000.

Yes, Francine can successfully collect entire debts from Janet's account as under partnership firm each partner has limited liability in the firm that is if assets of partnership falls short or other partners get insolvent or firm is not able to pay Francine then partner's private assets can be used for this purpose.

In this situation, Janet can claim to pay using firm's assets if those are available and sufficient assets aren't available then she can sue other partners and take an order against them according to which if they can not pay for their share of payment today, they will have to make complete payment Janet in installments defined over a certain time period.