38. evs Bartolo Partnership was formed in 2000; Loretta vasv ed $1 the partners,

Question

38. evs Bartolo Partnership was formed in 2000; Loretta vasv ed $1 the partners,a on 15 August 2005 Bartolo Pa million from Bank of California. ;Loretta was one of from the partnership.On 3 March 2006 Loreta filed a notice withdrawal from Bartolo Partnership with the office of the California Secretary of State. On 5 May 2006 Bartolo borrowed $1 om Bank of America.mOn 16 July 2006 Bartolo borrowed S of Wells Fargo Bank. On 5 November 2006 Bank of Califormia, Bank o America and Wells Fargo Bank all filed suit against Bartolo Partnership, the partners in the partnership and Loretta to amounts still owed to them fr On 2 March 2006 Loretta withdrew from million from p e othe shigainst eni recover the om the loans pr ously mentioned Which of these creditors of the partnership will be able to hold Loretta personally liable for re-payment of the debts owed by Bartolo Partnership? a. Bank of California, Bank of America and Wells Fargo Bank. b. Bank of California only c. Bank of California; Bank of America will also be able to hold Loretta personally liable if on 5 May 2006 Bank of America reasonably believed that Loretta was still a partner in Bartolo Partnership d. Bank of California; Bank of America will also be able to hold Loretta personally liable if on 5 May 2006 it reasonably believed that Loretta was still a partner in Bartolo Partnership; and Wells Fargo Bank will be able to hold Loretta personally liable if on 16 July 2006 it reasonably believed that Loretta was still a partner in Bartolo Partnership e. None of these creditors can successfully hold Loretta personally liable for debts owed by Bartolo Partnership.

Explanation / Answer

D. It is very important for Loretta to ensure that public is well aware of its resignation. Loretta should have informed Bank of California of its exit. Also Loretta should have ensured that the existing partners form a new partnership contract. If there is reasonable reason to believe that Loretta is an existing partner then she shall be liable to all banks

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