File bankruptcy for a partnership and you invite the bankruptcy trustee to sue the partners personally for the partnership debts.
In a partnership’s Chapter 7 case, the trustee can sue the general partners of the partnership if the partnership’s assets are insufficient to pay all claims.
The partners, after all, are liable for the debts of the partnership.
Section 723 empowers the trustee to collect any shortfall from the partners.
As a result, partners may be facing a suit by a well funded trustee suing for the benefit of all creditors of the partnership.
Get good advice before contemplating a partnership bankruptcy.
shutting down a failing business.
does this business have a future?
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