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Frank Lanza formed a limited partnership with his father-in-law, Ray Rodriguez, to open an upscale Italian restaurant in Houston, Texas. Mr. Lanza was the general

Frank Lanza formed a limited partnership with his father-in-law, Ray Rodriguez, to open an upscale Italian restaurant in Houston, Texas. Mr. Lanza was the general partner and owned 75 percent of the business. Mr. Rodriguez, with 25 percent ownership, was the limited partner and invested $100,000. After one year, difficulties in the restaurant's operation caused business to drop off, and Mr. Lanza called Mr. Rodriguez for advice. After hearing of the difficulties, and concerned with the security of his investment, Mr. Rodriguez traveled from Arizona to Texas to visit the operation. Upon observing the operation for two days, the two partners decided to launch a large and expensive television ad campaign to increase flagging sales. Mr. Rodriguez designed the campaign with the help of Tongal Advertising and Video, a national advertising agency specializing in television commercials. Despite an immediate increase in sales, volume continued to decline, and finally, three months after the ad campaign was launched, the restaurant closed its doors. Total debts at the time the restaurant closed equaled $400,000, with assets of the partnership only being $200,000. Included in the debt was $150,000 owed to the advertising agency. The agency sought payment directly from Mr. Rodriguez. Mr. Rodriguez claimed that his liability was limited to the $100,000 he had previously invested in the business and refused to pay any additional money. The Tongal Advertising Agency sued the limited partnership, as well as Frank Lanza and Ray Rodriguez individually

1. By hiring the advertising agency, did Mr. Rodriguez forfeit his limited partner status?

2. Is Mr. Rodriguez liable for the outstanding debts of the limited partnership?

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