Each question is hypothetical and needs to be in the IRAC method. There is no other data or graphic link and is not an "incomplete question"

1. John Hawk is a limited partner and Norman Costello is a general partner of Silk, LP (Limited Partnership), which owned a nightclub in Groton, Connecticut, called Silk Stockings. Anthony Sulls went drinking there one night and drank heavily. Although he was obviously drunk, employees at Silk Stockings continued to serve him. Giordano, a management employee of Silk Stockings, and Costello were working there that night. When Sulls left the nightclub at 1:45 a.m. with two friends, he drove off the highway at high speed, killing himself and one of his passengers, William Ridgeway. Ridgeway's estate has sued Hawk and Costello personally and Silk, LP.

A.What are the liabilities of Silk, LP in this lawsuit? Explain.

B.Are Hawk and Costello personally liable? Explain.

[Hint: limited partnerships and liability of partners]

2.Tommy is the CEO of Callahan Auto, Inc., a Delaware corporation. Tommy wants to give $100,000 to a charitable organization in which a friend of his is involved. The organization operates a private school for poor minority children. Callahan Auto's pre-tax profits for the current year will be $100 million. Tommy says he is besieged by requests for charitable donations. To avoid creating ill will with people seeking funds for other causes (some of whom are important customers), Tommy wants the corporation's gift to the school to be anonymous.

A. Tommy wants to know whether Callahan Auto can make the anonymous $100,000 gift. Please analyze. [Hint: business judgement rule; fiduciary duties; safe harbor rule]