Alicia Tompkins sells Blackacre to the PRS partnership. PRS paid Tompkins $300,000 in cash and...
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Alicia Tompkins sells Blackacre to the PRS partnership. PRS paid Tompkins $300,000 in cash and executed a $1,200,000 note payable to Tompkins. Each of the partners, assumed personal liability for repayment of the amount owed Tompkins. In addition, PRS enters into an agreement with Tompkins under which she is to manage Blackacre in return for compensation equal to 1 percent of PRS's net revenue from Blackacre.
To what extent are the partners of PRS "at risk" in connection with the purchase of Blackacre from Tompkins? Explain your answer.
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