Opinion ID: 1117163
Heading Depth: 1
Heading Rank: 1

Heading: Statutory Appraisal Rights

Text: The plaintiffs argue the district court erred by failing to hold that they were dissociated partners under the Kansas Uniform Partnership Act (KUPA), K.S.A. 56a-101 et seq., entitled to specific buyout rights of their interests under K.S.A. 56a-701, which provides in relevant part: (a) If a partner is dissociated from a partnership without resulting in a dissolution and winding up of the partnership business under K.S.A. 56a-801, the partnership shall cause the dissociated partner's interest in the partnership to be purchased for a buyout price determined pursuant to subsection (b). (b) The buyout price of a dissociated partner's interest is the amount that would have been distributable to the dissociating partner under subsection (b) of K.S.A. 56a-807 if, on the date of dissociation, the assets of the partnership were sold at a price equal to the greater of the liquidation value or the value based on a sale of the entire business as a going concern without the dissociated partner and the partnership were wound up as of that date. Interest must be paid from the date of dissociation to the date of payment. . . . . (i) A dissociated partner may maintain an action against the partnership, pursuant to subsection (b)(2)(ii) of K.S.A. 56a-405, to determine the buyout price of that partner's interest, any offsets under subsection (c), or other terms of the obligation to purchase. The action must be commenced within 120 days after the partnership has tendered payment or an offer to pay or within one year after written demand for payment if no payment or offer to pay is tendered. The court shall determine the buyout price of the dissociated partner's interest, any offset due under subsection (c), and accrued interest, and enter judgment for any additional payment or refund. If deferred payment is authorized under subsection (h), the court shall also determine the security for payment and other terms of the obligation to purchase. The court may assess reasonable attorney's fees and the fees and expenses of appraisers or other experts for a party to the action, in amounts the court finds equitable, against a party that the court finds acted arbitrarily, vexatiously, or not in good faith. The finding may be based on the partnership's failure to tender payment or an offer to pay or to comply with subsection (g). The defendants respond that the plaintiffs are not dissociated partners and have no statutory appraisal rights under the KUPA, the Kansas Revised Uniform Limited Partnership Act (KRULPA), K.S.A. 56-1a01 et seq., or the Mixed Entity Merger statutes, K.S.A. 17-7701 et seq., because this case involves the merger of a limited partnership and a limited liability company. As this case involves the interplay of three different statutory schemes, we will examine each one in our resolution of the issues.