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Question $5(10$ points$)$

Bob is in a bad place financially, so he decides to take out a $$50,000$ loan under his business, Bob Mifflin Paper Factory, in order to pay the default on his mortgage and other expenses. Bob Mifflin Paper Factory is a business that was started by Bob and his best friend, Mifflin, $5$ years ago. When the business first started Bob invested $$30,000$ while Mifflin worked at the business for the first $6$ months without paying himself. Now they share all the profits from the business. Bob and Mifflin do not have a formal partnership agreement because they are friends and did not think they needed one. Mifflin has no idea that Bob took out the loan under their business and after $5$ months, Bob defaults on the loan and the lender threatens to go after not only Bob's but also Mifflin's assets to pay for the loan.

Can the lender do this? Why or why not? Does Mifflin have legal recourse against Bob? $(10$ POINTS$)$