Partnership Pitfalls In Bankruptcy

courtroomFile 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.

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About the Author
 
 
Northern California bankruptcy lawyer Cathy is a 30+ year veteran of bankruptcy practice in the Silicon Valley. She is known for energetic representation of clients and her command of bankruptcy law.