Robertson v. Jacobs Cattle Co., 285 Neb. 859

Jacobs Cattle Company is a Valley County family partnership owning about 1,525 acres of land; four of six partners sought dissolution and liquidation, while another partner sought judicial dissociation of the four.
The district court dissociated the four partners by judicial expulsion under § 67-431(5) and ordered the partnership to buy out their interests under § 67-434, determining the asset value as of the date of the dissociation.
The court found grounds for dissolution under § 67-439(5)(b) and for dissociation under § 67-431(5)(a) and (c), but held dissolution was not mandatory and dissociation was appropriate.
The district court used a liquidation-value approach based on assets minus liabilities, including appreciated land value, and allocated 5.33% to each dissociated partner’s capital account.
Appellants argued the buyout should reflect capital gains from hypothetically selling the land on the date of dissociation and allocate profits to partners per the partnership agreement; the court did not consider this evidence, and the court imposed a 2.056% judgment rate.
On appeal, the Nebraska Supreme Court held that dissociation by judicial expulsion was proper and dissolution was not mandatory, but remanded for reconsideration of the buyout calculation and corrected interest rules, including a higher interest rate.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Dissolution versus dissociation under 1998 UPA/RUPA	Appellants seek dissolution of the partnership.	Court should dissociate, allowing the partnership to continue with remaining partners.	Dissociation permitted; dissolution not mandatory when grounds exist for expulsion.
Date of dissociation for buyout valuation	Use May 2005 (rent nonpayment) as the dissociation date.	Use September 20, 2011 (date of judicial expulsion).	Date of dissociation is September 20, 2011; earlier date not controlling for valuation.
How to calculate buyout considering capital gains	Liquidation value should include capital gains and apportion profits per the partnership agreement.	Use liquidation value with capital accounts, without extra capital-gain allocation per §67-434(2) and §67-445(2).	Remand to reconsider buyout after evaluating capital-gain profits and their allocation under the agreement.
Interest on buyout amount	Interest should accrue from dissociation date at market rate.	Interest at the statutory judgment rate.	Interest must accrue from September 20, 2011, at 14% per annum.

Shoemaker v. Shoemaker, 275 Neb. 112 (Neb. 2008) (adopts entity theory; guides when dissolution is not mandatory under RUPA-based statutes)
Brennan Associates, 293 Conn. 60 (Conn. 2009) (irreparable deterioration of partner relationships supports dissociation or dissolution)
Giles v. Giles Land Co., L.P., 279 P.3d 139 (Kan. App. 2012) (supports dissociation where conduct makes partnership impracticable)
King v. Evans, 791 S.W.2d 531 (Tex. App. 1990) (dissolution versus expulsion considerations in pre-RUPA contexts)
Oliker v. Gershunoff, 241 Cal. Rptr. 415 (Cal. App. 1987) (allocation of dissolution assets when dissociation occurs)