Can a 25% owner of a partnership be forced to sell his interest in
real property to a 75% owner of the partnership?  The agreement says
it takes a 2/3rds majority to sell the real property of the
partnership. It anticipated that the sale would be to an outside
party. Can the 75% owner set a low price and sell to himself thus
forcing the 25% owner out and ending up with 100%?

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Request for Question Clarification by richard-ga on 10 Jul 2005 17:36 PDT

Can you tell us what US state law the partnership is organized under?
Thanks.

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Clarification of Question by aatrainer-ga on 10 Jul 2005 19:02 PDT

Yes, This is a partership in Kansas.

Although the Kansas Uniform Partnership Act takes a limited view of
the duties a partner owes his/her partners, the statute specifies that
a partner must "account to the partnership and hold as trustee for it
any property, profit, or benefit derived by the partner in the conduct
and winding up of the partnership business or derived from a use by
the partner of partnership property, including the appropriation of a
partnership opportunity."

Here is the statute in full:

      56a-404.   General standards of partner's conduct. (a) The only
fiduciary duties a partner owes to the partnership and the other
partners are the duty of loyalty and the duty of care set forth in
subsections (b) and (c).

      (b)   A partner's duty of loyalty to the partnership and the
other partners is limited to the following:

      (1)   To account to the partnership and hold as trustee for it
any property, profit, or benefit derived by the partner in the conduct
and winding up of the partnership business or derived from a use by
the partner of partnership property, including the appropriation of a
partnership opportunity;

      (2)   to refrain from dealing with the partnership in the
conduct or winding up of the partnership business as or on behalf of a
party having an interest adverse to the partnership; and

      (3)   to refrain from competing with the partnership in the
conduct of the partnership business before the dissolution of the
partnership.

      (c)   A partner's duty of care to the partnership and the other
partners in the conduct and winding up of the partnership business is
limited to refraining from engaging in grossly negligent or reckless
conduct, intentional misconduct, or a knowing violation of law.

      (d)   A partner shall discharge the duties to the partnership
and the other partners under this act or under the partnership
agreement and exercise any rights consistently with the obligation of
good faith and fair dealing.

      (e)   A partner does not violate a duty or obligation under this
act or under the partnership agreement merely because the partner's
conduct furthers the partner's own interest.

      (f)   A partner may lend money to and transact other business
with the partnership, and as to each loan or transaction the rights
and obligations of the partner are the same as those of a person who
is not a partner, subject to other applicable law.

      (g)   This section applies to a person winding up the
partnership business as the personal or legal representative of the
last surviving partner as if the person were a partner.
http://www.kslegislature.org/legsrv-statutes/getStatuteFile.do?number=/56a-404.html

So it would be a violation of the "partnership opportunity" statute
for one partner to set a low price and vote to sell partnership to
himself even if he has the requisite voting interest to do so.

Search terms used:
Kansas statutes 
"partnership act" and opportunity

Thanks for letting us help.  I suggest you supply this research to a
Kansas attorney and ask the attorney to write a letter to your partner
reminding him to refrain from  breaching his legal obligations to the
partnership.

Google Answers Researcher
Richard-ga