Opinion ID: 1911789
Heading Depth: 1
Heading Rank: 3

Heading: partnership agreement

Text: In 1984, Don and Harley created D & H by oral agreement. The partnership's assets included 24 acres with improvements west of Lincoln and the right to collect rent from tenants. Harley and David owned Shoemaker's Truck Station, Inc., a truckstop and restaurant on the property. When Don and Harley created D & H, the partnership leased part of the property to the truckstop for 5 years and gave the truckstop the right to renew the lease for 4 additional terms of 5 years. At all relevant times, the truckstop was a tenant. In 1987, the partnership entered into a 99-year lease with Don on another part of the property. The parties stipulated that Don's son and daughter-in-law owned a motel on this property. In September 1989, Don and Harley signed a written partnership agreement for D & H. Don and Harley each had a 50-percent interest in D & H. The following sections are relevant: Section 3. Term of Partnership The partnership commenced by oral agreement on the 1st day of July, 1984, and shall continue until dissolved by mutual agreement or by the terms of this agreement. . . . . Section 11. Dissolution or Termination of the Partnership a. Any partner may withdraw or retire from the partnership upon 90 days prior notice to the remaining partner(s); b. The death or legal incapacity of a partner, shall immediately terminate the interest of such deceased or legally incapacitated partner in future partnership profits or losses; c. In the event of the withdrawal [or] retirement . . . of a partner, the remaining partner(s) shall have the right to continue the business of the partnership themselves or in conjunction with any other person or persons they may select, but they shall pay to the retiring partner. . . the value of such partner's interest in the partnership as provided in the following section. Section 12. Valuation of Partnership Shares The value of the interest of a withdrawing [or] retiring . . . partner, as of the date of such withdrawal [or] retirement. . . shall be determined in the following manner. In the event that the remaining partner(s) and the . . . retiring partner are unable to agree upon the value to be assigned to the partnership shares, all interested individuals shall select an appraiser and in the event they are not able to agree upon an appraiser, the remaining partner(s) and the . . . retiring partner shall be entitled to select an appraiser with the appraisers separately submitting their appraisals. If the appraisals are within ten percent of each other[,] the value shall be an average of the two appraisals. If the difference in the appraisals exceeds ten percent[,] the two appraisers shall together attempt to reach agreement on the value and if unable to do so shall obtain a third appraiser with the three appraisers together agreeing upon the value. The appraisers shall determine the value of the partnership as a going concern with all assets to be valued Cit, their fair market value. Section 13. Payment Upon Dissolution or Termination The value of the partner's interest as determined in the above section shall be paid without interest to the withdrawing or retiring partner . . . not later than 90 days after the effective date of the dissolution or termination. Section 14. Termination and Liquidation In the event the remaining partner(s) do not elect to purchase the interest of the retiring, deceased or legally incapacitated partner, or in the event the partners mutually agree to dissolve the partnership, the partnership, shall terminate and the partners shall proceed with reasonable promptness to liquidate the business of the partnership. In December 1992, Don and Harley each assigned half of their partnership interest to their wives.