Limited Partnerships

News & Analysis as of

General partner to pay $171 million for special committee’s failure to act in good faith: 2 key takeaways

In In re El Paso Pipeline Partners, L.P. Derivative Litigation, 2015 WL 1815846 (Del. Ch. Apr. 20, 2015), the Delaware Court of Chancery (Vice Chancellor J. Travis Laster) issued a post-trial opinion finding that the general...more

Appellate Court Notes

- SC19116, SC19150 - Brennan v. Brennan Associates. - SC19116, SC19150 Dissent - Brennan v. Brennan Associates. In a prior appeal decision, the court upheld the judicial disassociation (forceful removal) of the...more

Locke Lord QuickStudy: The Broader Lesson of the El Paso Pipeline Decision

Alternative entities, such as limited partnerships and limited liability companies, have an advantage over corporations because of the greater flexibility to define the terms of the arrangement by contract. ...more

Bill Would Clarify When Limited Partnership Life Begins

When does life begin for a California limited partnership?  The California Uniform Limited Partnership Act of 2008 seems to provide an inconsistent answers.  The first is found in Corporations Code Section 15902.01(a)....more

It’s All About the Process: Lessons from Delaware Court on MLP’s Conflicts Committee Approval

On April 20, 2015, the Delaware Court of Chancery issued a post-trial opinion in the case In Re: El Paso Pipeline Partners L.P. (C.A. No. 7141-VCL), finding El Paso Pipeline GP Company LLC, the general partner (GP) of El Paso...more

Delaware Chancery Awards Investors $171 Million

On April 20, 2015, the Delaware Court of Chancery issued a decision awarding $171 million in damages to the common unitholders of a limited partnership against its general partner in connection with a “dropdown” transaction. ...more

Court Of Chancery Explains How To Overcome Claim Of Subjective Good Faith

Limited partnership agreements often only require that the general partner act with subjective good faith in doing a deal with a parent entity. That is because the standard seems an easy one to meet....more

Partnerships – TMP Must Be a Partner

With April 15th rapidly approaching, I thought I would address a common question that I receive this time of year. Who can be the tax matters partner of a partnership?...more

A Guide to the UK Disguised Investment Management Fee Rules

New rules effective from today in the U.K. are likely to have material impact on the tax treatment of payments by a fund to its U.K.-based management executives and service providers. The rules cover many areas of fund...more

Developments in the Luxembourg Financial Sector

The Luxembourg supervisory authority, the Commission de Surveillance du Secteur Financier (CSSF), has recently issued FAQs regarding the immobilisation of bearer shares and units, as well as a press release to remind...more

Florida Supreme Court Overturns Directed Verdict for Defendant in Negligent Security Case

On February 12, 2015, the Florida Supreme Court quashed the Fourth District Court of Appeal’s decision in Sanders v. ERP Operating Limited Partnership, 96 So.3d 929 (Fla. 4th DCA 2012) and held that evidence of lapses in...more

Fundraising Strategy: Open Dialogue

In crafting current fund investments, investors have negotiated with fund managers for greater transparency, more efficiency and more egalitarianism. Navigating these issues necessarily becomes the priority for any GP’s list...more

Ellis v. OTLP GP, LLC, C.A. No. 10495-VCN (Del. Ch. Jan. 30, 2015) (Noble, V.C.)

In this letter opinion, the Court of Chancery denied plaintiffs’ motion to expedite certain contractual claims arising from the sale of a limited partnership after finding that the claims were not colorable. Plaintiffs were...more

Lewis v. Aimco Properties, L.P, et al., C.A. No. 9934-VCP (Del. Ch. Feb. 10, 2015) (Parsons, V.C.)

In this memorandum opinion, the Court of Chancery (i) granted in part certain defendants’ motion to dismiss for lack of subject matter jurisdiction, specifically ordering a stay pending arbitration; and (ii) granted certain...more

Locke Lord QuickStudy: Choice of Entity Considerations

Starting a business can be a daunting but rewarding challenge. One of the key decisions at the early stages of a new business is how to structure your business – i.e., what legal entity to form in order to carry on your...more

Luxembourg Tax Authorities Confirm Tax Treatment of Limited Partnerships

The Luxembourg tax authorities have confirmed, by means of the long-expected Circular Letter L.I.R. nº 14/4 (the “Circular”), the treatment of tax transparent Luxembourg limited partnerships in the form of a société en...more

Operational Enhancement: The Cayman Exempted Limited Partnership

THE CAYMAN EXEMPTED LIMITED PARTNERSHIP (ELP) has, since its creation in 1991, established itself as an effective, enduring and widely used offshore funds vehicle particularly in the closed ended private ...more

SEC Clarifies BDC Transactions with Certain Second-Tier Affiliates

The SEC’s Division of Investment Management has clarified which restrictions apply to BDC’s co-investment transactions with limited partners of a partnership that is an affiliated person of the BDC....more

SEC Permits BDCs to Analyze LPs as Stockholders for Certain Co-Investments

On December 5, 2014, the Securities and Exchange Commission, through the Chief Accountant's Office of its Investment Management Division, issued a Guidance Update in response to a public inquiry regarding co-investment...more

New SEC Guidance Adds Flexibility to BDC Co-Investing

The U.S. Securities and Exchange Commission (SEC) Division of Investment Management (the Division) just published guidance that will permit business development companies (BDCs) to co-invest with certain persons considered...more

Structuring an Agreement Among Owners

When forming a new technology company, there are very few documents as important (and unfortunately, as overlooked) as a Shareholders’ Agreement. The discussion in this post is couched as an agreement among shareholders of a...more

Why Am I Taxed Now on My Future Receipts: The Woes of a Profits Interest

Companies often grant stock options to incentivize employees and so that their interests are aligned with the future success of the company, and partnerships (and limited liability companies taxed as partnerships) are no...more

(INFOGRAPHIC) Amalgamation of Interests - or How to Ensure You Wasted Time Setting Up Multiple Project Companies

There is a fairly customary practice in real estate development and construction intended to take advantage of the liability protections afforded by the Uniform Limited Liability Company Act. The practice is very...more

Business Entity Alphabet Soup – GP, LP, JV, LLC, C, S, QSSS – What do they mean?

As government contractors, the business universe is likely filled with familiar acronyms. However, one may not be as familiar with the meaning behind the alphabet letters that comprise the different business entities in the...more

Surge in FOIA Requests to State Agencies Seeking Information About PE and Other Alternative Investment Fund Sponsors

We have recently observed a surge in freedom-of-information (“FOIA”) requests made by media outlets to state pension funds and other state-government-affiliated investment entities. Although the requests have so far...more

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