Legal Question in Bankruptcy in District of Columbia

Re: s croporation /bankruptcy

As to your partner's bankruptcy filing, the corporation still owes the debts - your partner is just no longer liable (if he ever was). To remedy it, the corp. will have to honor its debts if it can. If it can't and you are liable (you are not generally liable for corporate debts unless you guaranteed them, with some exceptions), then you will unless you file bankruptcy too. If you have taken out more in distributions, that will be dischargeable (absent fraud) if you file bankruptcy. To figure out the details, you need to consult with a competent bankruptcy lawyer.

Re: s croporation /bankruptcy

First, don't use the term "partner" in your writing, or thinking, about this subject. Co-owning shares of a corporation does not make you partners, and the liability of co-general partners for business debts is entirely different than that of co-shareholders.

The bankruptcy filing is almost certainly erroneous. Not only are the corporation's creditors probably not creditors of the bankrupt, improperly listing them as such is harmful to the creditors and to the business.

Your co-shareholder and his attorney should file amended papers with the bankruptcy court (if indeed this is appropriate, as I would guess from the facts given), and the business creditors should be reassured that the corporation is in sound financial health (if in fact it is).