What happens to Aseron's liability after generating profits for ACE?

The correct choice indicates that Aseron will still retain liability for damages to ACE, although the amount of that liability may be reduced due to the increased revenues generated. In partnership law, profits do not automatically absolve a partner from liability for previous actions or damages incurred during the partnership's operations. The principle that a partner's liability persists regardless of profit generation is rooted in the understanding that partnerships entail shared risks and responsibilities, which remain in place until specifically resolved.

In scenarios where profits are made, these may be considered when assessing damages and determining liability's financial aspects. For example, if Aseron's actions led to damages that affected ACE's operations, the profits may be factored into a legal discussion about how much Aseron should pay in damages, but they do not eliminate his obligation entirely.

The other options do not accurately depict the reality of Aseron's situation. For instance, assuming the liability is extinguished simply because profits were made would overlook the fundamental nature of partnership obligations, which persist unless legally discharged. Sharing damages equally does not consider the specifics of liability and fault, as the degree of responsibility may vary among partners based on their actions. Thus, the nuanced perspective on liability in this case is crucial for understanding how damages and profits intersect