Four years ago, Mr. Bates purchased 1,000 shares of UPF Inc. for $10,000. These shares represent a 30 percent equity interest in UPF, which is an S corporation. This year, UPF defaulted on a $120,000 unsecured debt to a major creditor.
a. To what extent can the creditor demand repayment of the debt from Mr. Bates?
b. Would your answer change if UPF is a partnership in which Mr. Bates is a 30 per-cent general partner?
c. Would your answer change if UPF is a partnership in which Mr. Bates is a 30 per-cent limited partner?
d. Would your answer change if UPF is an LLC in which Mr. Bates is a 30 percent member?