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G S Investments v. Belman
Business Organizations I (LAWN770)
Touro College
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G&S INVESTMENTS v. BELMAN 145 Ariz. 258, 700 P 1358 (Ct. App., Div. 2, 1984) FACTS: Parties: Appellant: Belman Appellee: G&S Procedural History: Relevant Facts: Century Park is a LP formed to receive ownership of apartment complex General partners were G&S (51%) and Nordale (25%) and the remainder owned by Jones and Chapin Nordale began blowing rails and began to get erratic Nordale lived in the apartment complex, refused to leave or pay rent 1981 G&S wanted to dissolve partnership and buy out Nordale 1982 Nordale died Partnership agreement provided that upon death of a partner the surviving partners may continue the partnership and will purchase the interest of the resigning partner ISSUE: Whether the surviving general partner is entitled to continue the partnership after the death of Nordale How the value of Nordale’s interest in the partnership property is to be computed PARTIES’ ARGUMENTS:
Plaintiff: Filing the complaint did not act as dissolution but that wrongful conduct of Nordale, in contravention of the partnership agreement, gave the court the power to dissolve the partnership and allow them to carry on the business by themselves Defendant: Filing the paperwork acted as a dissolution requiring liquidated damages
DISPOSITION OF THE COURT:
Affirmed RULE OF LAW: A court may dissolve a partnership when: o A partner becomes in any other way incapable of performing his part of the partnership contract o A partner has been guilty of such conduct as tends to affect prejudicially the carrying on of the business o A partner willfully or persistently commits a breach of the partnership agreement or otherwise so conducts himself in matters relating to the partnership business that it is not reasonably practicable to carry on the business in partnership with him HOLDING: Nordale’s conduct acted as a reason for the court to decree dissolution, the mere act of filing is not in effect dissolution COURT’S REASONING: Nordale’s conduct was in contravention to the partnership agreement, which made it impracticable to carry on the partnership The UPA provides for dissolution for cause by decree of court and appellees have alleged facts which would entitle them to dissolution but the filing of papers cannot effect dissolution without the court’s ruling Based on generally accepted accounting practices “capital account” is not a vague or ambiguous term
G S Investments v. Belman
Course: Business Organizations I (LAWN770)
University: Touro College
