ASSIGNMENT
1.In January, Dr. Vidricksen contributed $250,000 to become a limited partner in a Chevrolet car agency business with Thom, the general partner. Articles of limited partnership were drawn up, but no effort was made to comply with the State’s statutory requirement of recording the certificate of limited partnership. In March, Vidricksen learned that because of the failure to file, he might not have formed a limited partnership. At this time, the business developed financial difficulties and went into bankruptcy on September 1. Eight days later, Vidricksen filed a renunciation of the business’s profits. Is Dr. Vidricksen a general partner? Why or why not?
2. Dale Fullerton was chairman of the board of Enviro-search and the sole stockholder in Westover Hills Management. James Anderson was president of AGFC. Fullerton and Anderson agreed to form a limited partnership to purchase certain property from WYORCO, a joint venture of which Fullerton was a member. The parties intended to form a limited partnership with Westover Hills Management as the sole general partner and AGFC and Envirosearch as limited partners. The certificate filed with the Wyoming Secretary of State, however, listed all three companies as both general and limited partners of Westover Hills Ltd. Anderson and Fullerton later became aware of this error and filed an amended certificate of limited partnership, which correctly named Envirosearch and AGFC as limited partners only. Subsequently, Westover Hills Ltd. became insolvent. What is the liability of Envirosearch and AGFC to creditors of the limited partnership?
3. Namvar Taghipour, Danesh Rahemi, and Edgar Jerez formed a limited liability company (the LLC) to pur- chase and develop a parcel of real estate. The LLC’s articles of organization designated Jerez as the LLC’s manager. In addition, the written operating agreement among the members of the LLC provided: “No loans may be contracted on behalf of the [LLC] … unless authorized by a resolution of the members.” On the next day, the LLC acquired the intended real estate. Two years later, Jerez, without the knowledge or consent of the LLC’s other members, entered into a loan agreement on behalf of the LLC with Mount Olympus. According to the loan agreement, Mount Olympus lent the LLC $25,000, and as security for the loan, Jerez executed and delivered a trust deed on the LLC’s real estate property. Mount Olympus then disbursed $20,000 to Jerez and retained the $5,000 balance to cover various fees. In making the loan, Mount Olympus did not investigate Jerez’s authority to enter into the loan agreement beyond determining that Jerez was the manager of the LLC. Jerez absconded with the $20,000. The LLC never made payments on the loan, since it was unaware of the loan. Mount Olympus then foreclosed on the LLC’s property, giving notice of the default and pending fore- closure sale to only Jerez. Explain whether the foreclo- sure was valid.
4. Carolinian is a closely held, manager-managed limited liability company organized under the laws of South Carolina. Carolinian owns and manages various hotel and rental properties in South Carolina. In February 2014, the Levys obtained a judgment against Patel, a member of the Carolinian, in the amount of $2.5 million. Thereafter, the Levys obtained a charging order in the circuit court, which constituted a lien against Patel’s distributional interest in Carolinian. Subsequently, the Levys filed a petition to foreclose the charging lien, and the foreclosure sale was held in April 2016. The Levys were the successful bidders, purchasing Patel’s distributional interest for $215,000. Carolinian was represented at the foreclosure sale by its registered agent and its attorney, who unsuccessfully bid $190,000 on Carolinian’s behalf. Carolinian’s Operating Agreement provides that a member’s financial rights can be redeemed at any time up until foreclosure sale. But neither Carolinian nor any of the remaining members redeemed Patel’s interest prior to the foreclosure sale, and the Levys did not thereafter seek to be admitted as members of Carolinian. Following the foreclosure sale, Carolinian asserted it was entitled to purchase Patel’s distributional interest from the Levys pursuant to Article 11 of the Operating Agreement, which provides that if a member attempts to transfer all or a portion of his membership share without obtaining the other members’ consent, such member is deemed to have offered to the LLC all of his membership share. Carolinian contended that since the Levys failed to obtain the consent required under Section 11.1 of the Operating Agreement, their distributional interest was deemed to have been offered to Carolinian, and Carolinian was entitled to purchase that interest under Section 11.2. The Levys objected to Carolinian’s attempt to force them to sell their interest, arguing they were not subject to the terms of Article 11 of the Operating Agreement. Explain who should prevail
