Promissory Note for a Loan
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Clinton William executed a promissory note as general partner on behalf of Monica West Office Condos, Ltd. (the partnership). He also executed a guarantee written by the Bank which limited his liability to 25% of the indebtedness. This note was for a loan issued by Congress Bank. The loan was also secured by a deed of trust for the partnership's real property.
The partnership defaulted on the note. After the property was sold, a deficiency of $920,000 was left.
These events took place in Texas. Under Texas law general partners of a limited partnership are personally liable to creditors for the limited partnership's debts the same as a partner in a general partnership.
Clinton argues that because the guarantee limits his liability to 25% of the indebtedness, his liability as general partner is similarly limited. How do you think the court should rule?
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The solution creates a promissory notes for a loan for Monica West Office Condos.
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I think that the court will rule in favor of the bank. The guarantee made by Clinton William for Monica West Office Condos, Ltd.'s ...
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