The Salinas-Milliken partnership is terminated when creditor claims exceed partnership assets by $80000. Salinas is a millionaire and Milliken has no personal assets. Milliken's partnership interest is 75% and Salinas's is 25%. Creditors
A) must collect their claims equally from Milliken and Salinas.
B) may collect the entire $80000 from Salinas.
C) must collect their claims 75% from Milliken and 25% from Salinas.
D) may not require Salinas to use his personal assets to satisfy the $80000 in claims.

Question

Quizplus · Accepted Answer

Since Milliken has no personal assets to pay off the creditor claims, the entire $80000 must be collected from Salinas who has personal assets as well as a 25% partnership interest. Salinas may have to use his personal assets to satisfy the claims. Therefore, option B is correct.

The Salinas-Milliken Partnership Is Terminated When Creditor Claims Exceed Partnership