Donald Fisk is a limited partner of Sparta Oil Development. He paid $10,000 for his limited-partnership interest. In addition, he lent Sparta $7,500. Sparta failed to find oil and is in financial difficulty. Upon dissolution and liquidation,
A. Fisk and all outside general creditors will receive repayment of their loans prior to any other distributions.
B. Fisk will receive repayment, along with the other limited partners, in respect to his capital and loan after all other creditors have been satisfied.
C. The last distribution, if anything remains, is to the general partners in respect to capital.
D. If Fisk holds partnership property as collateral, he may resort to it to satisfy any deficiency if other partnership assets are insufficient to meet creditors' claims.
Answer: A. Fisk and all outside general creditors will receive repayment of their loans prior to any other distributions.
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