In re Dissolution of Midnight Star Enterprises, L.P.
Supreme Court of South Dakota
724 N.W.2d 334 (2006)
MSEL (plaintiff), as general partner of Midnight Star casino alongside Kevin Costner and the Canevas (defendants), sought dissolution after failed efforts to amicably part ways with the Canevas, who managed the casino; MSEL's accountant valued the partnership at $3,100,000 using the hypothetical-transaction method the limited partnership agreement (LPA) specified, but the Canevas solicited a competing $6,200,000 offer from an outside buyer, which MSEL argued violated the LPA's valuation and distribution scheme. The trial court adopted the $6,200,000 figure and ordered MSEL and Costner to either buy out Midnight at that price or sell it on the open market; MSEL appealed.
Whether, when a partner withdraws from a partnership, the majority partners are required to purchase the entire appraised value of the partnership in order to continue operating the partnership.