Hawaii Revised Statutes 425E-1112 – Power of general partners and persons dissociated as general partners to bind organization after conversion or merger
(a) An act of a person that immediately before a conversion or merger became effective was a general partner in a converting or constituent limited partnership binds the converted or surviving organization after the conversion or merger becomes effective, if:
Terms Used In Hawaii Revised Statutes 425E-1112
Constituent limited partnership: means a constituent organization that is a limited partnership. See Hawaii Revised Statutes 425E-1101
Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
Person dissociated as a general partner: means a person dissociated as a general partner of a limited partnership. See Hawaii Revised Statutes 425E-102
(1) Before the conversion or merger became effective, the act would have bound the converting or constituent limited partnership under § 425E-402; and(2) At the time the third party enters into the transaction, the third party:
(A) Does not have notice of the conversion or merger; and(B) Reasonably believes that the converted or surviving business is the converting or constituent limited partnership and that the person is a general partner in the converting or constituent limited partnership.(b) An act of a person that before a conversion or merger became effective was dissociated as a general partner from a converting or constituent limited partnership binds the converted or surviving organization after the conversion or merger becomes effective, if:
(1) Before the conversion or merger became effective, the act would have bound the converting or constituent limited partnership under § 425E-402 if the person had been a general partner; and(2) At the time the third party enters into the transaction, less than two years have passed since the person dissociated as a general partner and the third party:
(A) Does not have notice of the dissociation;(B) Does not have notice of the conversion or merger; and(C) Reasonably believes that the converted or surviving organization is the converting or constituent limited partnership and that the person is a general partner in the converting or constituent limited partnership.(c) If a person having knowledge of the conversion or merger causes a converted or surviving organization to incur an obligation under subsection (a) or (b), the person shall be liable:
(1) To the converted or surviving organization for any damage caused to the organization arising from the obligation; and(2) If another person is liable for the obligation, to that other person for any damage caused to that other person arising from the liability.
