Fredericks Peebles v. Assam, 915 N.W.2d 770

Fredericks Peebles & Morgan LLP (FPM), a D.C.-organized LLP with principal place of business in Omaha, had five equity partners; Assam held a 23.25% interest and resigned by email on October 2, 2014 then attempted to rescind but partners voted to accept his resignation.
The Partnership Agreement provides that a voluntary-withdrawing equity partner receives 100% of the fair market value of the partner’s interest as of the date of notice, paid in six monthly installments.
Partners had been engaged in compensation and financial planning; at the October 2014 meeting they voted to write off roughly $10 million of old/uncollectable accounts receivable.
Assam retained Eide Bailly and other experts who valued his interest between about $3.12 million and $4.88 million; FPM’s expert Brennan valued it at $590,000 applying income-based methods and a 60% lack-of-control/marketability discount.
District Court rejected Assam’s breach and accounting claims, found the Partnership Agreement unambiguous, credited Brennan’s valuation, and declared Assam’s fair market value interest to be $590,000.
Assam appealed, arguing choice of law (D.C. law should apply), breach of contract, that the court erred by excluding nonoperating assets and receivables from value, and that he should have received a money judgment and attorney fees.

Issue	Plaintiff's Argument (Assam)	Defendant's Argument (FPM)	Held
Choice of law: apply D.C. vs Nebraska law	D.C. law should govern and would change valuation, breach standards, and fees	No real conflict; partnership agreement governs under either jurisdiction	No actual conflict; Partnership Agreement controls; any error was harmless
Whether FPM breached the Partnership Agreement	FPM’s write-off of receivables and conduct breached duties entitling Assam to damages/fees	No breach; write-off was legitimate, discussed in advance, and affected all partners equally	No breach found; Assam failed to prove breach
Proper method to determine fair market value of Assam’s interest	Value should include nonoperating assets and receivables; Eide Bailly/Assam valuations preferred	Income-based valuation with discounts for lack of control/marketability is appropriate; Brennan more experienced in law-firm valuation	Court adopted Brennan’s income-based valuation with substantial discounts and affirmed $590,000 fair market value
Entitlement to money judgment and attorney fees	Assam sought a money judgment and fees for breach	FPM sought only declaratory relief; fees require prevailing party under Agreement	Assam was not prevailing party; no money judgment or attorney fees awarded

Christiansen v. County of Douglas, 288 Neb. 564 (2014) (declaratory-judgment standards and de novo equity review)
Robertson v. Jacobs Cattle Co., 288 Neb. 846 (2014) (partnership dissolution/accounting is equitable and reviewed de novo)
O’Brien v. Cessna Aircraft Co., 298 Neb. 109 (2017) (choice-of-law framework: no actual conflict means forum law need not displace foreign law)
Adkins Ltd. Ptp. v. O Street Management, 56 A.3d 1159 (D.C. 2012) (definition of fair market value under D.C. law)