The Existence and Amount of Partnership Liabilities: California Business Law

Written by Adam Peck Category: Injury Law January 15th, 2013 1 min read

The existence and the amount of the partnership liabilities are factors in setting the purchase price of the partner’s interest. Deciding how to treat unknown liaibilities e.g.an asserted tort or breach of warranty claim, that cannot specificallly be taken into account in the valuation can be problematic. This problem is compounded by the fact that the decision on whether to indemnify against unknown liabilities must be made whrn the buy-sell agreement is drafted, perhaps years before any sale or liquidation of partnership interest occurs.

Assumption of the unknown liabilities by the remaining partners may result in windfall to the withdrawing partner. However the partnership also may benefit from future windfall profits, such as the award of large contract shortly after withdrawal when work on the contract had been in process before the partner’s withdrawal or an unexpected increase in the value of fixed assets.

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Written by Adam Peck

Expertise: Personal Injury

Adam J. Peck, ESQ is a principal with Peck Law Group, APC. In 2008, Mr. Adam Peck received his Juris Doctorate from Whittier Law School where he graduated Cum Laude. His practice is primarily dedicated to representing Elders, Dependent Adults, along with their loved ones and family members, who have suffered horrific personal injuries.