Issue: The court must determine the dissolution of partnership?

Rules:

Under Louisiana Law, a partnership in commendam consists of one or more general partners who have the

1. powers,

2. rights, and

3. obligations of partners;

And one or more partners in commendam, or limited partners, whose

1. powers,

2. rights, and

3. obligation of a limited partnership.

Under Louisiana Law, a contract of partnership in commendam must be in writing and filed for registry with the secretary of state as provided by law.

Until the contract is filed for registry, partners in commendam are liable to third parties in the same manner as general partners.

According to Barksdale, the court held that 1. General Partner owes fiduciary duty to the limited partners and to the

partnership.2. A partner has not a right to prefer his own interest to that of the firm, not

deprive the partnership of a profitable bargain by taking to his own account.

3. The rule is especially true when considering a general partner’s duty to its limited partners since the general partner has complete authority to deal with the partnership business.

4. The general partner acting in complete control stands in the same fiduciary capacity to the limited partners as a trustee stands to the beneficiaries of a trust.

According to Manheim, the court held that

A partnership in commendam consists of one or more general partners who have the powers, rights, and obligation of partners.

A general partner, unlike a partner in commendam, may bind the partnership, participate in management or administration of the partnership, and conduct any business with third parties on behalf of the partnership.

A partnership in commendam terminates by the death of the General Partner unless it was continue with the consent of the remaining general partners or unless, within ninety days of his death, all the remaining partners agreed in writing to continue the partnership and appoint at least one general partner.

According to La Chomette, a partner in commendam is responsible for the capital contribution promised in regard to debt and liability. A partner in commendam can not withdraw capital contribution until all partnership debts are paid.

According to Black Coll., a line of credit from the limited partner can be considered as a capital contribution. The withdrawal of the line of credit is considered the withdrawal of the capital contribution. Limited partners can not withdrawal capital contribution until partnership is insolvent.

According to Marshall, 1. If a partner withdraws from a partnership, and yet suffers his name to continue

and stand as part of the firm, he will be held liable notwithstanding his retirement. 2. If a name is used in the partnership and the one of the partner withdrawal from the

partnership and when an article is properly advertise in the newspaper of the partner withdraw, the withdrawal partner is no long liable.