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    summie's Avatar
    summie Posts: 1, Reputation: 1
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    #1

    Feb 22, 2012, 05:24 PM
    Partner Resigned
    A partner in the company has resigned and is filing bankruptcy. The problem is that the company is in serious financial distress. My question is can he just walk away from the company and not be responsible for the debt by filing bankruptcy? How should the owner go about making sure the partner is responsible even though he has resigned and is filing? The company was in debt before he left. The other partner is also considering filing bankruptcy but would like to know what if any responsibility the other partner has.
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
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    #2

    Feb 22, 2012, 05:25 PM
    What is the structure of the company?
    AK lawyer's Avatar
    AK lawyer Posts: 12,592, Reputation: 977
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    #3

    Feb 22, 2012, 07:44 PM
    Quote Originally Posted by summie View Post
    A partner in the company has resigned and is filing bankruptcy. The problem is that the company is in serious financial distress. My question is can he just walk away from the company and not be responsible for the debt by filing bankruptcy? How should the owner go about making sure the partner is responsible even though he has resigned and is filing? The company was in debt before he left. The other partner is also considering filing bankruptcy but would like to know what if any responsibility the other partner has.
    Although the terms can be mis-applied (by, for example calling a co-owner of a corporation a "partner"), from your use of the term "partner" I will assume it is a partnership and not a limited liability company or a corporation. With that assumption, the bankrupt parther would probably be entitled to walk away from the company debt, unless the debt is determined to be non-dischargeable. In the mean time, when the first partner files bankruptcy, doing anything to collect from him or do anything against his assets is automatically stayed by the bankruptcy.

    What bankruptcy chapter is he filing under? If he is filing under chapters 13 or 11, he will have to file a plan which will specify what responsibilities he has as far as the company debt.

    I suggest that the other partner consult with a bankruptcy attorney.
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