QUESTION

I am a partner in a corporation. The corporation as well as myself and another partner are being sued.

Asked on Sep 30th, 2012 on Business Litigation - South Carolina
More details to this question:
This lawsuit is from a lease for a property that the corporation entered into as the 2 partners signed personal guarantees for the lease. How does the suit breakdown each of the partners responsibility.
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1 ANSWER

Litigation Attorney serving Greenwich, CT
Partner at Hilary B. Miller
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Although it does not particularly matter in this context, corporations do not have partners -- they have stockholders. As a general matter, assuming that the stockholders have executed joint and several guarantees of the lease, and assuming further that the corporation cannot pay any of the liability, and finally assuming that the stockholders have no separate agreement regarding how they will allocate the liability between themselves, then they are each liable for the entire debt. This means, as a practical matter, that the lessor can decide from which stockholder it wants to collect from. It may then be up to the stockholder who pays the lion's share of the debt to sue the other stockholder for contribution. Presumptively, each stockholder may be required to contribute half of the debt, but it is possible that one stockholder may not have the money and the lessor will collect from the other. You should engage the services of an attorney to review the documents and to defend you.
Answered on Sep 30th, 2012 at 6:05 PM

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