Certificates of Limited Partnership
The Black Squirrel limited partnership has been in operation for many years, but has recently fallen on hard times. The partners have decided to dissolve, although there are few assets remaining in the partnership. Shortly after the partnership filed its certificate of limited partnership, the partners had the foresight to incorporate into their partnership agreement a provision that, in the event of dissolution, the assets would be distributed in payment of claims first to limited partners, then to general partners, then to creditors. Hilda is a limited partner and feels relieved that she will receive at least a portion of her capital. Henry, one of the general partners said that this provision is void and unenforceable. Which of the following best describe this situation?
a. The provision placing the partners ahead of creditors in not enforceable, but the priority of limited partners over general partners is enforceable.
b. The distribution as called for in the agreement is enforceable even though it was not included in any filing associated with the limited partnership.
c. The distribution of assets in the event of dissolution is one of the few provisions where the Revised Uniform Limited Partnership Act does not allow modification.
d. The provision placing limited partners ahead of general partners in unenforceable, thus all partners would be on equal footing and ahead of creditors.
e. The distribution as called for in the agreement would be enforceable if it had been included in any fillings related to the limited partnership.