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TexLaw
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I signed a dissolution agreement with my ex-partners and it

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I signed a dissolution agreement with my ex-partners and it went into affect on 12/31/2011.
They are now in a legal battle with a client and my name has been added to the paper work. The claims have all been made after the dissolution agreement, but the claim deals with work done while I was still a part owner. Am I still legally responsible for this?
Submitted: 2 years ago.
Category: Legal
Expert:  TexLaw replied 2 years ago.

Zachary D. Norris :

Hi,

Zachary D. Norris :

Thank you for your question.

Zachary D. Norris :

Did the dissolution agreement have any language regarding the assumption of liability after the dissolution?

TexLaw, Attorney
Category: Legal
Satisfied Customers: 4258
Experience: Lead trial/International commercial attorney licensed 11 yrs
TexLaw and 10 other Legal Specialists are ready to help you
Expert:  TexLaw replied 2 years ago.
Hi,

Since I didn't hear back from you I switched to the Q&A format. it allows us to communicate, just not instantly.

Generally, you will remain liable for claims which accrue while you were still a partner. You may have indemnity from this liability if you were provided with such from the dissolution agreement. However, in general, simply leaving the partnership does not shield you from claims against the partnership for something that happened while you were still working there. Unfortunately, if this was a general partnership, you personal assets remain exposed.

Please let me know if you need further information.

Best Regards,
Zachary D. Norris
TexLaw, Attorney
Category: Legal
Satisfied Customers: 4258
Experience: Lead trial/International commercial attorney licensed 11 yrs
TexLaw and 10 other Legal Specialists are ready to help you
Customer: replied 2 years ago.
Below is the text regarding obligations and indemnification from the dissolution agreement. It is my understanding that this relieves me of any responsibilities. It was a legal LLC in arizona and not a general partner ship.

Thank you,
Ben

"2. ASSUMPTION OF OBLIGATIONS
The Purchasing Partners shall and do assume and agrees to pay all of the outstanding debts and obligations of the partnership business and to perform all of the covenants of the lease on the premises, and to perform all the outstanding contracts and agreements required to be performed by the partnership and agrees to save and hold harmless Selling Partner against any claim or claims that may arise by reason of such debts, obligations, or covenants, or any other claims except those specifically mentioned in this agreement.
3. INDEMNIFICATION
The Selling Partner warrants and represents that it has incurred no debts, nor contracted any obligations, nor incurred any liability in the name of the partnership or for which the partnership would be liable, other than those debts, obligations, or liabilities as are disclosed in the partnership books of which Selling Partner has advised the Purchasing Partners. The Selling Partner agrees to indemnify and save and hold harmless the Purchasing Partners on account of any claims that may be made against the partnership because of any debt, obligation, or liability which the Selling Partner incurred in the partnership name or for which the partnership became liable on account of any of Ben Meek’s actions and of which Selling Partners failed to inform the Purchasing Partner."
Expert:  TexLaw replied 2 years ago.
Thank you for your response and clarification. As a member of an LLC, your liability is generally limited to your membership interest unless you are being sued for breach of the LLC agreement by other members of the LLC.

The dissolution agreement does grant you indemnity. This means that they are supposed to handle the defense for you on this.

It also means that any claim against you for which you may be liable will be covered by the indemnity agreement.

However, you also agree to indemnify the LLC for any claim that is based on your actions.

So, whether you are liable or not depends on the outcome of the case and what the claim is for. If the liability came about because of your doing, then you may be liable for more than your LLC interest because you have agreed to indemnify the company.

You will need to answer the lawsuit. It's probably a good idea to retain a defense attorney to help you through this and make the necessary pleading claims for indemnity, etc.

If the claim is not based on your actions, then you need to file a general denial with the court and then ask the LLC to assume your defense.

Please let me know if you need clarification.

Best Regards,
Zachary D. Norris

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