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In re Keck, Mahin & Cate

274 B.R. 740 (Bkrtey. N.D. Ill. 2002)

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In re Keck, Mahin & Cate

United States Bankruptcy Court for the Northern District of Illinois

274 B.R. 740 (Bkrtey. N.D. Ill. 2002)

Facts

Keck, Mahin & Cate (Keck) (debtor) was an Illinois partnership engaged in the practice of law. Keck’s creditors filed an involuntary bankruptcy petition against Keck, and the bankruptcy court converted the case to a chapter 11 case. The court confirmed the chapter 11 plan and appointed a plan administrator (creditor). The plan administrator sued two former Keck partners named Barbara Billauer and Thomas Ho’okano (debtors), seeking to hold Billauer and Ho’okano jointly and severally liable for some of Keck’s debts. The plan administrator argued that the claims arose while Billauer and Ho’okano were still Keck partners. Billauer and Ho’okano argued that the claims did not accrue until after they had already withdrawn from the Keck partnership. Billauer and Ho’okano argued that when they withdrew, a newly formed partnership assumed all of Keck’s debts, including those being asserted against Billauer and Ho’okano. The bankruptcy court held a trial on the merits.

Rule of Law

Issue

Holding and Reasoning (Doyle, J.)

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