John Palmer and Henry Morrison formed the limited partnership of Palmer & Morrison for the management of the Huntington Hotel. The limited partnership agreement provided that Palmer would contribute $400,000 and be a general partner and that Morrison would contribute $300,000 and be a limited partner. Palmer was to manage the dining and cocktail rooms, and Morrison was to manage the rest of the hotel.

Nanette, a popular French singer who knew nothing of the limited partnership affairs, appeared for four weeks in the Blue Room at the hotel and was not paid her fee of $8,000. Subsequently, the limited partnership became insolvent. Nanette sued Palmer and Morrison for $8,000.

a. For how much, if anything, are Palmer and Morrison liable?

Explain.

b. If Palmer and Morrison had formed a limited liability limited partnership, for how much, if anything, would Palmer and Morrison be liable? Explain.

c. If Palmer and Morrison had formed a limited liability company with each as a member, explain for how much, if anything, would Palmer and Morrison be liable.

d. If Palmer and Morrison had formed a limited liability partnership with each as a general partner, explain for how much, if anything, would Palmer and Morrison be liable.