## Facts

- In 1984, Dan “Ike” Parker (through Parker Paving, Inc.) and Douglas Guthrie discussed operating an asphalt plant on Alaska’s Kenai Peninsula.
- Douglas Guthrie worked for Guthrie Machinery Co. (GMC), owned by his father, C.J. Guthrie.
- The parties orally agreed to acquire an asphalt plant in British Columbia, move it to Soldotna, Alaska, and operate it as Northern Mixing Company (NMC), principally supplying asphalt to Parker’s paving business.
- Although the venture was expected to become a corporation, it was never formally organized as one and operated for roughly two months before discontinuing by winter 1984–85.
- After the business failed, the parties could not agree on allocation of assets, expenses, and liabilities, though they shared an understanding that profits were to be divided equally.
- The Guthries sued Parker seeking possession of the plant, damages for alleged diminution in value, and an accounting; C.J. also sought reimbursement for financing-related amounts and other claimed costs.
- Parker asserted various expenses as partnership obligations; disputed items included an environmental fine, related attorney’s fees, and costs of repair work (including slurry coat application).

## Issues

1. Whether NMC should be treated as a de facto partnership (despite contemplated incorporation) and governed by Alaska’s Uniform Partnership Act (UPA).
2. How partnership losses and disputed expenses should be allocated in the dissolution accounting, including whether specific items were partnership obligations.
3. Whether C.J. Guthrie was properly treated primarily as a creditor (rather than a partner) and what distribution remedy was appropriate at dissolution.
4. Whether prejudgment interest was properly awarded on amounts determined in the partnership accounting.

## Decision

- The Alaska Supreme Court largely affirmed the superior court’s findings and overall accounting framework.
- The Court upheld treating NMC as a de facto partnership between Parker and Douglas Guthrie and applying the UPA.
- The Court upheld most factual determinations allocating disputed expenses (including the environmental fine, related attorney’s fees, and repair work) as chargeable to the partnership.
- The Court accepted that, given equal profit sharing and no contrary agreement, losses were to be shared equally under UPA default rules.
- The Court treated C.J. Guthrie primarily as a creditor and left in place the remedy transferring the asphalt plant to him to satisfy his claims, subject to adjustments in the accounting.
- The Court modified aspects of the prejudgment-interest awards and related accounting details.

## Legal Principles

- A business that functions as a partnership may be treated as a de facto partnership even if participants expected later incorporation; rights and liabilities are then governed by the UPA.
- Absent an agreement to the contrary, partners share losses in the same proportion as profits; equal profit sharing supports equal loss sharing.
- In a dissolution accounting, expenses incurred in the ordinary course of partnership operations, including regulatory penalties and related legal costs, may be charged to the partnership when supported by the factfinder’s determinations.
- A participant who primarily advances funds may be treated as a creditor in dissolution proceedings, and partnership assets may be transferred to satisfy creditor claims as part of the final distribution.
- Prejudgment interest may be awarded in partnership accountings as part of compensation, but must track when amounts became sufficiently definite under applicable standards.

## Conclusion

The court affirmed that the failed asphalt-plant venture operated as a de facto partnership governed by the UPA, applied default equal loss-sharing consistent with equal profit sharing, upheld most accounting allocations of disputed expenses, recognized C.J. Guthrie’s creditor status with an asset-transfer remedy, and adjusted portions of the prejudgment-interest and accounting determinations.


Parker v. N. Mixing Co., 756 P.2d 881 (Alaska 1988)