Legal Question in Business Law in New York

Re: surety bond

It is not entirely clear to me what you are asking, and some more facts would be helpful. What is the surety bond for? I hate to speculate, but here are some scenarios.

(1) Perhaps you are selling the property and there is a lien or lis pendens that won't be resolved until they expire or a litigation is resolved. In that case, the partnership, or one of its partners, might post a bond to serve as collateral in the event the lienholder or litigant suing you prevails. This will ensure that the party making a claim against the property will be satisfied monetarily and the purchaser of the property will be protected and unaffected by the outcome. It really doesn't matter who posts the collateral in this instance, so long as they understand that if they pledge assets such as a bank account to the surety company, those assets cannot be touched and are potentially at risk.

(2) Another frequent scenario is if you are trying to develop the property, and the municipality is requiring a bond to be posted to guarantee the satisfactory completion of improvements, such as a road in a subdivision. Again, it doesn't matter who posts the bond, but if they pledge collateral to the surety company such as a bank account, they won't be able to touch it until the bond is released.

(3) On the other hand, if you are stating that the managing partner has arranged to post a bond without consulting with the other partners, that is an issue related to that partner's authority and a completely different issue.

Please post your question again with more details.

The terms and conditions to obtain a surety bond will vary from company to company and depend on several factors, such as what the issue is that requires the posting of a bond, and the ability of the party to pay the bond premiums, likelihood of sucess on the underlying issue, and source of collateral if any that the surety company may require to be assigned to them until the bond is released.