Original sample office memorandum
To: Jada Robbins
From: Applicant
Date: March 18, 2025
Re: Dawes Family Partnership—dissociation and buyout
Overview
Dawes and Gordon have a credible, but not conclusive, basis to seek judicial dissociation of Poole. The evidence should show an operationally unworkable relationship, rather than mere resentment that he receives draws or disagrees about expansion. Their strongest buyout argument is that qualifying additional advances and retained distributions are loans payable before the residual interest is divided. Initial and unanimously agreed capital contributions require different treatment.
I. Judicial dissociation
Columbia RUPA section 23.601(e)(3) authorizes judicial expulsion where conduct relating to partnership business makes it not reasonably practicable to continue with the person as a partner. Dissociation can remove a partner while the remaining business continues; it need not require dissolution and sale of every store.
Bates v. Bates Land Co. applies a totality-of-the-circumstances test. It distinguishes an irreparable breakdown impairing operations from good-faith disagreements over ordinary business challenges. Its examples include refusals to communicate or sign necessary documents, false accusations, efforts to seize control, and a toxic atmosphere. The analysis is practical, not a requirement to prove a particular act of violence or theft in every case.
Here, Poole initially accepted payments without participating. More recently he repeatedly criticized employees after being asked to stop, bought inventory that would not sell, attempted to fire an employee the others retained, and blocked the proposed fourth store by refusing the loan documents. The failed buyout meeting ended in accusations of mismanagement and a threatened lawsuit. Taken together, these events support escalating dysfunction affecting personnel, purchasing, financing, and planning.
The blocked expansion is an especially useful comparison to the refused land-sale signatures in Bates. It connects the relationship’s deterioration to a concrete lost business opportunity. The continuing inability to agree on employee supervision also suggests more than a private family quarrel.
There are meaningful weaknesses. Poole had check-signing authority, so buying inventory was not necessarily an unauthorized seizure of control. Poor commercial judgment does not alone establish impracticability. Refusing a new loan can reflect a good-faith objection to expansion, and the file does not establish that his charges of mismanagement were false. Unlike Bates, there are no findings of threats of death, physical altercations, or personal use of company funds. Dawes and Gordon also became angry during the meeting, so the deterioration cannot simply be attributed to Poole without examination.
Poole’s agreement to mediation indicates that communication may still be salvageable. That supports settlement but also gives him an answer to a claim that continued partnership is already impossible. We should document the operational effects, disputed decisions, attempts to resolve them, and the basis for the accusations. A court could order dissociation, but the present record does not make it inevitable. This balanced assessment should inform mediation rather than become an assertion that the siblings can expel him merely by voting together.
II. Buyout valuation
Under section 23.701, a dissociation not resulting in dissolution requires purchase of the departing interest at the amount distributable if the assets were sold and the business wound up on the dissociation date. Dawes and Gordon are willing to use one-third for Poole, so this memorandum does not contest his agreed percentage. That does not make one-third of gross asset value the correct payment.
Johnson v. Samson holds that the partnership agreement controls where it speaks and statutory defaults fill its gaps. Beyond agreed capital, advances are presumptively loans accruing interest from the advance date; a special promissory note is unnecessary. Distributions a partner was entitled to receive but left available to the business can likewise be loans. Partnership liabilities, including those loans, are paid before the residual value is allocated.
The Dawes agreement does address capital. Paragraph 7 requires unanimous agreement for additional capital contributions, and paragraph 8 allows unanimous agreement to determine their treatment. Thus, we must classify each payment rather than apply Johnson to every dollar indiscriminately.
The original equal startup contributions were agreed capital and should not be recast as loans simply to lower Poole’s inherited interest. The equal down payments for the second and third stores, made with the original partners’ participation, may likewise reflect unanimously agreed additional capital. We need the actual agreements and accounts. After the mother’s death, Dawes and Gordon supplied additional money without seeking or obtaining Poole’s contribution or apparent unanimous agreement to capitalize it. Those payments more closely fit Johnson’s default loan treatment, unless contrary agreement or another controlling characterization is established.
Their retained draws also deserve separate credit if they were actually determined and payable under paragraph 9, then left for partnership use. Forgone compensation that never became an agreed distribution is not automatically a loan; the records must establish the entitlement, amount, and dates. Poole’s authorized monthly draws are not debts merely because the others chose to retain theirs.
The accounting should value the assets, deduct outside liabilities such as mortgage debt, repay qualifying partner advances with interest, and allocate the remaining distributable amount using the agreed ownership fractions and applicable capital accounting. No item should be deducted twice as both a mortgage payment and a remaining liability, or as both capital and a partner loan.
Dawes predicts a roughly $50,000 reduction in Poole’s payment, but the file lacks the amounts, dates, interest calculation, current valuation, and full distribution records needed to confirm that figure. Before mediation, we should assemble that schedule and separate clearly established loan credits from disputed capital. The legal position favors reimbursement of qualifying post-capital advances; it does not support an unsupported across-the-board deduction of every historical contribution.