Business Law

Business Law News 2020, ISSUE 1

Han v. Hallberg: Playing Pick-up Sticks with Presta Logic

Layton L. Pace

Layton L. Pace is a tax and closely-held-business attorney practicing in Hermosa Beach, California. He is a past chair of the Corporate and Pass-Through Entities Committee of the Taxation Sections of the State Bar of California (now part of the California Lawyers Association) and Los Angeles County Bar Association. He has served on the LLC Committee of the Business Law Section of the CLA. He represents partnerships, limited liability companies, and their managers and owners, but has no stake in the outcome of, relationship to, or financial interest in, the Han v. Hallberg litigation.

Can a trust be a partner in a partnership? Does the death of a partner who has transferred a partnership interest into a trust trigger buy-out provisions of a partnership agreement? In May 2019, the Second Appellate District of the Court of Appeal of California in Han v. Hallberg concluded yes and no to those questions. That result conflicts with the November 2009 decision reached by the Fourth Appellate District in Presta v. Tepper. In August 2019, the California Supreme Court granted review in Han v. Hallberg to decide those questions. This article sets out the issues.


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