Opinion ID: 2534320
Heading Depth: 1
Heading Rank: 5

Heading: The Order Authorizing the Sale of the Property

Text: Ed next contends the court erred in authorizing the dispersing agent to sell the property to Fallon because he, as a partner and family member, was the more logical buyer. He asserts that the offers he and his daughter's company produced were for more money and on terms more favorable to the Partnership. In the abstract, fairness may dictate that the property be sold to the remaining partners, particularly when the property is part of the family business and family members reside on the property. See, e.g., Maras v. Stilinovich, 268 N.W.2d 541, 544 (Minn.1978); 59A AM.JUR.2D Partnership § 720 (2003). There is, however, no general rule directing to whom partnership assets must or should be sold during the winding-up process. Nor does the limited partnership agreement create such a right in any of the partners. The Compromise specifically provided that Ed would have an option to buy Mike's interest in the partnership, but he failed to exercise the option. Once Ed's option expired, he was an ordinary offeror for the real property. Next, we turn to Ed's contention that his and his daughter's company's offers were better deals for the Partnership. Ed made two offers. The first was for $2.6 million  $80,000 more than Fallon's offer. At a hearing on the offer, though, an accountant testified that Ed's offer included credits of his and his mother's partnership interests, so it amounted to an offer to purchase the partnership interests. The accountant indicated this would have adverse tax consequences for the Partnership. Taking this testimony into account, the court ruled the Fallon offer was in the Partnership's best interests. In its order authorizing sale the court noted the pernicious tax consequences of Ed's offer and, in addition, that the precise value of the partners' respective interests had not yet been calculated and thus was not and could not then be known. Ed's second offer, the same in many respects but revised to eliminate the partnership credits, came well after the court authorized the sale to Fallon. The River Cattle Company offer  $3.5 million  also came well after the court's initial order. Nevertheless, Ed argued that since Fallon had not closed on the closing date, it should forfeit its earnest money and the court should accept one of the new offers. The testimony is in conflict as to whether Fallon then had the financing necessary to close. Other testimony reveals that Fallon would not close so long as Ed's cattle remained on the property. There was also the matter of the disruption caused by Ed's bankruptcy petitions. Again, our focus in reviewing the district court's order is not on whether we would have made the same decision, but rather on whether the court's ruling was based on substantial and competent evidence. All told, we find nothing clearly erroneous about the order authorizing the sale or the court's decision to extend the closing date. Finally, Ed contends the court erred in authorizing the dispersing agent to execute the documents necessary to close the sale. He says (1) the court had no admissible evidence before it that would justify the order and (2) the parties never envisioned granting the dispersing agent the authority to sell the property. However, the plain language of paragraph 1.7 of the Compromise provides: All real estate shall be sold by the Dispersing Agent with a qualified real estate broker of his choosing, for not less than fair market value. The court's order approving the Compromise provided that the dispersing agent is empowered and authorized to carry out the terms and provisions of the [Compromise] in accordance with its terms and provisions. Thus, the dispersing agent was equivalent to a receiver. See I.C. §§ 8-601-606. Receivers have the authority to do such acts respecting the property as the court may authorize. I.C. § 8-605. There was no testimony or other evidence indicating the partners wished to retain the authority to execute closing documents or that paragraph 1.7 meant something other than what it so plainly states. We are thus unable to agree with Ed that the partners never envisioned granting the dispersing agent the authority to sell the property. C.