Opinion ID: 2634486
Heading Depth: 3
Heading Rank: 3

Heading: It Was Error To Permit a Buyout Without Objective Evidence of the Value of Disotell's Partnership Interest.

Text: Although it was not error to grant Stiltner the option to buy out Disotell's partnership interest, it was error to permit the buyout without requiring some objective determination of the value of all of the partnership assets, particularly the land and building Stiltner contributed. The superior court used tax appraisals to establish the value of the hotel property and parking lot. The court relied on a report by an expert witness who, to explain the accounting methodology set out in AS 32.05.350, assume[d], for illustrative purposes only, that the hotel property and parking lot would sell for their tax-appraised values. The tax appraisals were not introduced into evidence. The expert discussed them only hypothetically to illustrate an entirely different point, not as support for an opinion of property values. Neither party introduced evidence of any appraisal. Disotell and Stiltner both acknowledge that neither offered any evidence of value of the partnership assets. Because a buyout is appropriate only if it is for fair market value, and there was no admissible evidence of fair market value, we must remand. It will be necessary on remand to determine the value of the assets before Stiltner attempts to buy out Disotell. The parties may offer any evidence relevant to the value of the partnership property. [10] The partnership assets include both the hotel property and the parking lot. Contemporaneous appraisals of both will be necessary so that neither party is prejudiced by a fluctuation in the value of one asset. On appeal, Disotell claims that he had no pretrial notice that the superior court would establish a value for the partnership property. The remand will provide Disotell full opportunity to introduce evidence or otherwise address the issue.