## Facts

- R.A. Pickens & Son Company was a long-running farming partnership that leased and farmed roughly 13,000 acres; membership and percentage interests changed over time, and no definite term was shown.
- Louis Sterling Frank joined the partnership in 1968 after being an employee, ultimately holding a 3% interest; his buy-in was financed by a note to the partnership to be paid from his profits.
- On May 31, 1976, the managing partner, R.A. Pickens, notified Frank that his partnership interest was terminated and tendered a check calculated from Frank’s 3% capital interest as of December 31, 1975, plus interest, minus Frank’s partnership debts (a note and store-account balance).
- Frank refused the tender; the partnership treated the amount as a liability/credit due to him and continued operations without him.
- Frank sued for an accounting and later sought judicial dissolution and liquidation of the partnership; the partnership counterclaimed that a dissolution as to Frank had already occurred and that an oral buyout practice governed valuation and payment.

## Issues

1. Whether the partnership was a partnership at will that could be dissolved as to Frank by notice, and whether Frank could compel judicial dissolution and liquidation of the entire business.
2. Whether an oral agreement or established practice could govern the valuation and payout of Frank’s interest, and what amounts (capital value, interest/profits, offsets for debts) were due upon his exit.

## Decision

- The Arkansas Supreme Court affirmed the finding that the partnership was at will and that notice on May 31, 1976 effected a dissolution as to Frank.
- The court affirmed the refusal to order dissolution and liquidation of the entire partnership enterprise.
- The court upheld use of the partnership’s proved oral arrangement/practice to value and pay a departing partner’s interest based on the prior year-end capital account with deductions for debts.
- The court modified the decree to increase Frank’s recovery by awarding an additional share of 1976 profits, and otherwise affirmed.

## Legal Principles

- A partnership with no definite term or particular undertaking is generally a partnership at will, dissolvable by a partner’s express will.
- Dissolution of an at-will partnership as to an outgoing partner does not automatically require liquidation of the entire business; remaining partners may continue if the outgoing partner receives the value of the interest with appropriate profit/interest adjustments.
- Partners may, including by oral agreement proved by course of dealing, set valuation and payout terms for a departing partner, supplementing default statutory rules so long as the arrangement is not inconsistent with mandatory provisions.
- An outgoing partner’s recovery may be calculated as the value of the capital interest as of an agreed valuation date, plus interest or a share of profits until settlement, less amounts the partner owes the firm.

## Conclusion

The court treated the farming operation as an at-will partnership that could be dissolved as to Frank by notice, denied Frank’s attempt to force enterprise-wide liquidation, enforced the partnership’s proved buyout method for valuing his interest, and increased his award to include an additional share of 1976 profits after offsets for his debts.


Frank v. R.A. Pickens & Son Co., 264 Ark. 307, 572 S.W.2d 133 (1978)