March 10, 1994
Digest: A newly elected full-time judge may not continue to retain an interest in a partnership which operates a commercial enterprise and owns the building and land. The judge should terminate the partnership relationship as soon as possible and should not actively participate in partnership business.
Rules: 22 NYCRR §100.5(c)(2); Opinions 89-108; 90-101
A newly elected full-time judge who was a general partner in a partnership which owned a building and a retail business operated therein prior to his/her election, inquires if there is a specific period of time in which to dispose of the real property and business.
The judge and partner have been attempting to sell both the building and business for six or seven months but without success. The judge has not participated in either management of the building or operation of the business since becoming a judge and will continue to refrain from participation until liquidation of the partnership. The judge also is personally liable on outstanding debts of the partnership.
Rule 100.5(c)(2) of the Rules of the Chief Administrator provides in part that no full-time judge:
shall be a managing or active participant in any form of business enterprise organized for profit nor shall he or she serve as an officer, director, trustee, partner, advisory board member or employee of any corporation, company, partnership or other association organized for profit or engaged in any form of banking or insurance.
Opinion 89-108, Vol. IV, of this Committee provides that a judge of a county-level court may continue to own commercial realty as a tenant-in-common so long as the judge takes no active role in the management or operation of the premises.
Opinion 90-101, Vol. VI, similarly provides that a newly elected full-time judge may continue to manage a small rental property he/she owns where the management involved is strictly limited to what is necessary and incidental to maintain
However, neither of these opinions governs the situation presented. For in the instant matter, the judge is a partner in a partnership organized for profit under Rule 100.5 (c)(2), and that status is forbidden. Accordingly, the judge should terminate the partnership relationship as soon as possible, and should not actively participate in partnership business.