Corporate Finance

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Joint and Several Liability in Partnerships

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You enter into a partnership with your brother, each investing \$50,000 into the partnership. Unbeknownst to you, your brother stops paying all of the suppliers, empties the bank account and runs away to Bolivia. The suppliers sue the partners and win a judgment for \$300,000. How much is your personal liability?

A

$50,000

B

$0 - it is all your brother's doing

C

$300,000 - the entire judgment

D

$150,000 - 50% of the judgment