Opinion ID: 1242354
Heading Depth: 3
Heading Rank: 2

Heading: The Superior Court Erred in Valuing the Alaska Culinary Management, Inc. Debt.

Text: The second disputed issue in this case relates to a venture named Alaska Culinary Management, Inc. (ACM). In the 1980s, the Dodsons invested in ACM, which owned and operated a restaurant in Fairbanks called Clinkerdagger's. According to Jim, the Dodsons were majority investors. Robin emphasizes that she did not want to purchase a majority of ACM. [9] Nevertheless, Robin signed a $400,000 note to Denali State Bank to facilitate the purchase, and she managed Clinkerdagger's for a period of time. The restaurant closed in 1994, leaving significant outstanding debts. These debts included approximately $368,000 of the original $400,000 note to Denali State Bank. During the divorce proceedings, Jim filed an affidavit in which he stated that the Clinkerdagger's building space was being rented for $2,000 per month, but that [t]his amount does not cover the $4,000 per month owed to the bank. Subsequently, however, he responded to direct examination as follows: Q And then what about the  what was the 400,000-dollar note? A It's being serviced by the person that we have the building at Clinkerdaggers leased to, which is Alex  the last name slipped my mind. .... Q And you say he  is he presently leasing it from you? A Yes. Q And then  but where do his lease payments go? A They're paid directly to Denali State Bank. Q And what do those lease payments pay in addition to the bank loan, anything? A No. Q Who pays the lease payments owed to.... A Well, it's a triple-net lease. He pays that and the lease payments and the taxes. The superior court concluded that the parties owed Denali State Bank $368,000 and awarded the debt to Jim. It also awarded all of the ACM stock to Jim. Then, for purposes of calculating the value of Jim's portion of the property distribution, the court concluded that the combined value of the ACM stock and the Denali State Bank debt was zero. The court reached this conclusion because of the facts that the debt is currently serviced by the rental, the court has no information regarding the assets of Alaska Culinary Management, and the court does not believe that it is likely that Mr. Dodson would pay the entire amount by himself. Jim challenges the superior court's conclusion. He correctly points out that [b]oth parties testified that the ACM stock was of no value. Therefore, he focuses on the new tenant's payments and concludes that [t]he trial court's determination that `servicing the debt' zeroed-out the entire obligation finds no support in logic or in the record. Robin contends that Jim's testimony supports the superior court's conclusion. She also asserts that [t]here is no evidence of record to support [Jim's] contention that he personally will pay the Denali State Bank debt of $368,000. We conclude that the superior court erred. There is insufficient evidence to justify the conclusion that Jim will have no liability on the Denali State Bank debt. On remand the court should determine what portion of this debt he will likely have to pay. In making this determination, the superior court is authorized to conduct supplementary evidentiary proceedings.