In 1996, Alyssa Knowlton and Jenny Larson formed a partnership and operated a hair and styling salon, which they called "House of Style."

 

Knowlton and Larson had taken some business law courses prior to starting the business and were aware that they should have a partnership agreement setting forth the terms of their partnership arrangement. They did, in fact, enter into a written partnership agreement, which provided that in the event of the death or withdrawal of either partner, the remaining partner would have the right to purchase the interest of the dissociating partner at an agreed upon price.

The Agreement set the initial value of each partner's interest at $50,000. Despite the fact that the value of the business grew dramatically, Knowlton and Larson never got around to re-setting the value of the partnership interests.

The business was a huge success, and, by early 2019, had grown to a value of $1,000,000. At that time, unfortunately, Knowlton died quite unexpectedly, leaving a husband and three children as survivors.

In accordance with the terms of the partnership agreement, Larson tendered $50,000 to Knowlton's survivors as payment for her interest in the partnership; Knowlton's husband objected, claiming that since the value of the partnership was now $1,000,000, the value of Knowlton's interest was $500,000, not $50,000.

The parties could not resolve the case, and it wound up in court. You are the Judge: What are you going to award Knowlton's surviving husband for the value of her partnership interest?