## Facts

- Joseph Creel, Arnold R. Lilly, and Roy Altizer formed a partnership (Joe’s Racing) to sell NASCAR memorabilia, with written terms addressing ownership interests and transfers.
- Creel contributed inventory valued at about $15,000; Lilly and Altizer each invested about $6,666.
- The agreement provided that a deceased partner’s interest would pass to the estate and, if the estate wished to sell, it must first offer the interest to the surviving partners; it did not clearly address the business’s disposition upon a partner’s death.
- Creel died on June 14, 1995; under Maryland’s then-applicable Uniform Partnership Act (UPA), his death dissolved the partnership by operation of law.
- After Creel’s death, Lilly and Altizer conducted a physical inventory, retained an accountant, valued the business as of the dissolution date, and tendered the Estate what they calculated as its share of the surplus after liabilities.
- The Estate demanded liquidation (sale of all partnership assets), asserting that only a forced sale would determine “true” value.
- Lilly and Altizer ceased operating as Joe’s Racing on August 31, 1995, and began operating a similar retail business the next day under the name Good Ole Boys Racing.
- The Estate claimed Good Ole Boys Racing was a continuation of Joe’s Racing and sought a share of post-dissolution profits.

## Issues

1. Whether, under Maryland’s UPA and the parties’ agreement, the estate of a deceased partner may compel liquidation of partnership assets to determine the value of the decedent’s partnership interest.
2. Whether the Estate was entitled to share in profits of Good Ole Boys Racing as an alleged continuation of the dissolved partnership.

## Decision

- The Court of Appeals of Maryland affirmed the judgment for the surviving partners.
- The Estate was not entitled to compel liquidation of the dissolved partnership’s assets where the surviving partners wound up in good faith, provided an accurate dissolution-date valuation, and paid the Estate its share of the surplus.
- The Estate was not entitled to profits from Good Ole Boys Racing because it was treated as a successor or new business, not a continuation in which the Estate retained an ongoing partnership interest.

## Legal Principles

- Under Maryland’s UPA, dissolution upon a partner’s death entitles the deceased partner’s estate to the value of the partnership interest as of dissolution, not an absolute right to force liquidation as the valuation method.
- “Winding up” after dissolution may be accomplished through inventory, accounting, and payment of the estate’s proportionate share, without converting all assets to cash, if performed in good faith and without improper valuation practices.
- A successor business formed by surviving partners after dissolution does not, by itself, create an ongoing right in the deceased partner’s estate to share in post-dissolution profits when the prior partnership has been properly wound up and the estate paid.

## Conclusion

The court held that a deceased partner’s estate cannot demand liquidation merely to test value when surviving partners conduct a good-faith winding up, accurately value the business as of dissolution, and pay the estate its share; the estate also has no claim to profits of a later successor business started by the survivors.


Creel v. Lilly, 354 Md. 77, 729 A.2d 385 (Md. 1999)