“From Fixed-Term to At-Will”: Wyoming Supreme Court Declares Post-Term Family Partnerships At-Will and Subject to Automatic Dissolution on Partner Withdrawal

Introduction

The Wyoming Supreme Court’s decision in Barbie Jean Schwinn & Deborah Schwinn Bailey v. Robert Louis Schwinn, et al., 2025 WY 83, rewrites the landscape for closely-held partnerships that begin life with a fixed term but continue operating after that term expires. The Schwinn siblings formed the Ignaz Schwinn Family Partnership Co. in 1984 to manage assets inherited from their father—including a picturesque 465-acre parcel known as the Blue Holes Ranch. Four decades and many intra-family disputes later, two sisters (Barbie and Deborah) attempted to withdraw and force either a buy-out or liquidation. The district court branded their exit “wrongful,” refused to wind up the business, and limited them to a deferred lien interest.

On appeal, the Wyoming Supreme Court reversed. Embracing the default rules of the Illinois Revised Uniform Partnership Act of 1997 (RUPA)—the governing law selected in the partnership agreement—the Court held that:

1. After the initial five-year term expired, the family partnership was an at-will partnership, not one for a “particular undertaking.”
2. The sisters’ written notice of withdrawal was, therefore, a rightful dissociation.
3. Under RUPA § 801(1) and ¶ 6(a) of the partnership agreement, their dissociation automatically dissolved the partnership and required winding up.
4. The district court must now supervise dissolution, decide on judicial supervision or receivership, and permit the withdrawing partners to participate in winding up.

Summary of the Judgment

Reversing four core holdings of the district court, the Supreme Court ruled:

• No wrongful dissociation. Because the partners were free to withdraw at any time after the five-year term, the sisters did not breach the agreement.
• The partnership was at-will. Merely continuing to “hold and manage non-cash assets” is not a “particular undertaking” with a definite end-point.
• Dissolution triggered. The sisters’ 2016 withdrawal notices dissolved the partnership under RUPA § 801(1).
• Winding up required. Absent a contrary contractual provision (none exists), business must be wound up. The Court remanded for the district court to oversee that process and assess “good cause” for judicial supervision under RUPA § 803(a).

Detailed Analysis

1. Precedents and Authorities Cited

• Statutory Framework
  • Illinois RUPA (805 Ill. Comp. Stat. 206) – §§ 101, 103, 601, 602, 801-803, 807.
  • Wyoming procedural cases governing appellate review (e.g., Fuger v. Wagoner, 2024 WY 73).
• Out-of-State Interpretations of § 101(h) (Partnership at will v. particular undertaking)
  • Tropeano v. Dorman, 441 F.3d 69 (1st Cir. 2006)
  • Chandler Med. Bldg. Partners v. Chandler Dental Group, 855 P.2d 787 (Ariz. 1993)
  • Canter’s Pharmacy, Inc. v. Elizabeth Assocs., 578 A.2d 1326 (Pa. Super. Ct. 1990)
  • Jordon v. Bowman Apple Prods. Co., 728 F. Supp. 409 (W.D. Va. 1990)
  • Legacy cases in RUPA commentary (Stone, Frey, Page, etc.).
• Wyoming Contract-Interpretation Cases – Wallop Canyon Ranch, LLC v. Goodwyn, 2015 WY 81; Ultra Resources, Inc. v. Hartman, 2010 WY 36.

These precedents collectively establish that (a) the default statutory regime applies unless expressly waived; and (b) an objective, “four corners” reading governs contract interpretation. The Court relied heavily on national RUPA jurisprudence to fill Illinois-law gaps and confirm that open-ended asset management does not equal a “particular undertaking.”

2. The Court’s Legal Reasoning

1. Choice-of-Law & Statutory Applicability. The agreement designates Illinois law. Under Illinois transition rules, RUPA governed all partnerships by 1 Jan 2008. Because no earlier dissolution occurred, RUPA controlled.
2. Textual Analysis of ¶ 6(a). The clause permits withdrawal after five years and states the partnership continues “for so long thereafter as the Partnership holds any non-cash property interests, unless sooner dissolved by … withdrawal of any Partner.” The Court read this as expressly preserving the statutory right to withdraw.
3. No “Particular Undertaking.” Maintaining inherited assets indefinitely lacks a certain end-point—mirroring the holdings in Chandler and Tropeano. Consequently, the partnership met RUPA’s definition of an “at-will” enterprise (§ 101(h)).
4. Rightful Dissociation. Under § 602(a) and non-waivable § 103(b)(5), a partner may always withdraw by notice (at most, a writing requirement). Because the contract contained no contrary limitation, the sisters’ 2016 email and letter effected dissociation; § 602(b) renders it wrongful only if the agreement forbids it. It did not.
5. Automatic Dissolution & Mandatory Winding Up. RUPA § 801(1) provides that, in an at-will partnership, notice of withdrawal dissolves the entity. Dissolution automatically begets winding up (§ 802(a)), unless all non-withdrawn partners waive winding up under § 802(b). That waiver is unavailable here because the sisters’ dissociation was not wrongful and they did not consent.
6. Judicial Supervision. Under § 803(a), any partner may request court supervision “for good cause.” The district court must reconsider this request on remand, factoring decades-long family discord and failed internal governance.

3. Anticipated Impact

The decision carries outsized significance for family enterprises, real-estate holding partnerships, and any venture that slides from a fixed term into open-ended operation:

• Clarifies RUPA uniformity. Wyoming joins other jurisdictions treating indefinite asset-holding partnerships as at-will, enhancing predictability for interstate practitioners.
• Raises stakes of withdrawal notices. A single partner’s written exit can now dissolve a post-term partnership, compelling winding up unless partners proactively amend their agreements.
• Emphasizes contract drafting. Operating agreements must explicitly waive § 801(1) dissolutions or define a genuine “particular undertaking” if perpetual existence is desired.
• Guides lower courts. The remand instructions model a two-step inquiry: (1) does the agreement override RUPA defaults? (2) If not, winding up is mandatory.

Complex Concepts Simplified

Partnership at Will

An entity where partners have not agreed to stay together until a fixed date or project conclusion; any partner may leave at any time, triggering dissolution.

Particular Undertaking

A discrete project with a certain end—e.g., building and selling a specified apartment complex. Management of ongoing investment property is not a particular undertaking.

Dissociation

The formal act of a partner leaving the partnership relationship. It can be rightful (permitted) or wrongful (breaching the agreement or occurring before a term ends).

Dissolution

The legal change in partnership status that signals business is no longer carried on except for winding up.

Winding Up

The process of settling accounts, liquidating assets, paying debts, and distributing surplus to partners.

Judicial Supervision / Receiver

A court-appointed neutral who oversees asset liquidation and dispute resolution when partners cannot cooperate.

Conclusion

The Wyoming Supreme Court’s ruling firmly anchors the principle that once a fixed-term partnership outlives its specified term and permits withdrawal, it functions at will. Any partner’s written exit notice not only severs their membership but instantaneously dissolves the entity and commands winding up—unless the partnership agreement clearly says otherwise or the remaining partners and the withdrawing partner unanimously waive dissolution. Practitioners should, therefore, audit legacy partnership agreements to determine whether post-term operations inadvertently default to at-will status, exposing the enterprise to dissolution shocks. The Schwinn saga exemplifies how careful drafting—or the lack thereof—can decide multimillion-dollar destinies decades later.