HRS §425E-1112
When old partners' actions still bind the business after a conversion or merger
This section says that after a limited partnership converts or merges into another business, actions taken by its former general partners can still legally bind the new business in certain situations. This only applies if the third party did not know about the change and reasonably believed the old partner was still acting for the old business. If a partner who knew about the change causes the new business to be bound, that partner must pay for any resulting damages.
businesses
The statute, as written — Power of general partners and persons dissociated as general partners to bind organization after conversion or merger
(a) An act of a person that immediately before a conversion or merger became effective was a general partner in a converting or constituent limited partnership binds the converted or surviving organization after the conversion or merger becomes effective, if: (1) Before the conversion or merger became effective, the act would have bound the converting or constituent limited partnership under section 425E-402; and (2) At the time the third party enters into the transaction, the third party: (A) Does not have notice of the conversion or merger; and (B) Reasonably believes that the converted or surviving business is the converting or constituent limited partnership and that the person is a general partner in the converting or constituent limited partnership. (b) An act of a person that before a conversion or merger became effective was dissociated as a general partner from a converting or constituent limited partnership binds the converted or surviving organization after the conversion or merger becomes effective, if: (1) Before the conversion or merger became effective, the act would have bound the converting or constituent limited partnership under section 425E-402 if the person had been a general partner; and (2) At the time the third party enters into the transaction, less than two years have passed since the person dissociated as a general partner and the third party: (A) Does not have notice of the dissociation; (B) Does not have notice of the conversion or merger; and (C) Reasonably believes that the converted or surviving organization is the converting or constituent limited partnership and that the person is a general partner in the converting or constituent limited partnership. (c) If a person having knowledge of the conversion or merger causes a converted or surviving organization to incur an obligation under subsection (a) or (b), the person shall be liable: (1) To the converted or surviving organization for any damage caused to the organization arising from the obligation; and (2) If another person is liable for the obligation, to that other person for any damage caused to that other person arising from the liability.
Sections this one refers to
§425E-402 General partner acts for the limited partnership
LawTrove is not legal advice. The summary above is a computer-generated restatement — the authoritative text is the official version linked above.