Hedge Fund Business Models

holders) can't be held liable for losses greater than their capital. This C cor-
poration is bankrupt and the liability holders have effectively become the
equity owners of the company.
Limited Partnership
In contrast to a C corporation, the general partners are held liable for the
obligations of the partnership. Further, all partners remain liable for all the
FIGURE 5.2
Balance Sheets after Loss
FIGURE 5.3
Balance Sheet after Loss Exceeding Capital
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HEDGE FUND COURSE
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