BUSINESS LAW "Michael Sark operated a loggingbusiness as a sole proprietorship. To acquire equipment for thebusiness, Sark and his wife, Paula, borrowed funds from Quality Car& Truck Leasing, Inc. When his business encountered financialdifficulties, Sark was unable to pay his creditors, includingQuality. The Sarks sold their house (valued at $203,500) to theirson, Michael, Jr., for one dollar, but they continued to live init.

Three months later, Quality obtained a judgment in an Ohio statecourt against the Sarks for $150,481.85 and then filed a claim toset aside the transfer of the house to Michael, Jr., as afraudulent conveyance. From a decision in Quality’s favor, theSarks appealed, arguing that they did not intend to defraud Qualityand that they were not actually Quality’s debtors."

Given that Paula jointly borrowed funds from QualityCare & Truck for the benefit of the business, could it beargued that she was a partner of the logging business with herhusband Michael? Why or why not?

If you were the attorney advising Michael Sark (we willassume this would have taken place prior to the businessencountering financial difficulty), what advice might you havegiven him about ways in which he could prevent the loss of hisfamily home?