Legal Question in Business Law in Maine

General Partnership Law

I was apart of two General Partnerships which owned two motels. One of the partnerships had four partners involved and one had two. When the motels could not pay their debt service to the bank, the bank began pursuing me under my limited guarantee. The other partners had a full guarantee. To make a long process short, I became the bank. I bought the bank out at a discount and through a separate corporation assumed all the paper and the bank's debt balance and documentations, maintaining the full guarantees on my partners. Since that time I have sold the two properties under my new corporation to other buyers. Can I pursue my old partners on this original debt or at least on the discounted portion I purchased from the bank? I also had many out of pocket expenses that I incurred during this nightmare to pay atty. fees, property taxes, vendors, etc. I assume I have to pay my percentage share of these costs, but can I go after my other partners for theirs?


Asked on 2/27/05, 11:05 am

1 Answer from Attorneys
Jerome Gamache Ainsworth Thelin & Raftice, P.A.

Re: General Partnership Law

Thank you for the question. So long as your corporation received properly documented assignments of the Bank's rights with respect to the defaulted obligations, I cannot see any legal reason as to why you cannot then pursue the assets of the general partnerships and/or the assets of the partners. With respect to your ability to recover costs of collection, legal fees, etc., your right to do so will be based upon the language of the original lending documents between the partnerships and the Bank. Since virtually ever Bank document I have ever seen provides for the full ability of the Bank to be reimbursed for reasonable costs of collection and legal fees, then it is likely that you also have the right to do so as the Bank's assignee. However, the fees must be on account of pursuit of the debt collection and not the legal efforts undertaken to initially fight the Bank or obtain the assignment.

I would be willing to consult with you on this matter further if you wish to call me at 767-4824.

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Answered on 2/27/05, 5:29 pm


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