This is a standard limited-partnership structure.
I am not surprised that you don't understand limited partnerships, but in light of the fact that Krugman is a Ph.D. economist who is also a bloviating pundit about all things financial and economic, he is apparently in the dark about how limited partnerships are structured.
I assume you know that if you own a corporation, and that corporation has a liability, like a business debt or maybe a judgment in favor of some injured person, you are not personally liable. There are exceptions but very rare.
If, on the other hand, you are a sole proprietor or a general partner in a partnership, you have full unlimited personal liability for business obligations.
In a limited partnership, the limited partners do not have full unlimited personal liability. However, the general partners do.
Bush was a general partner. He and the other general partner were both fully, personally liable for the Rangers business debts. If someone suffered catastrophic injury at a baseball game due to negligence, Bush would have been legally obligated to personally compensate that person out of his own money. If the Rangers went bankrupt, Bush personally would have had to give everything he owned to the creditors.
Next time you think you are an entrepreneur, ask yourself whether you are personally liable for any debt of the university or any judgment against the university.
Bush was personally liable as a general partner. If you take extra risk, you get a better deal. That's standard business practice. Lucky for him, it worked out. Not all business deals work out. |
