N.Y. Partnership Law 115-A – Limited partners' derivative action brought in the right of a limited partnership to procure a judgment in its favor
§ 115-a. Limited partners' derivative action brought in the right of a limited partnership to procure a judgment in its favor. 1. An action may be brought in the right of a limited partnership to procure a judgment in its favor, by a limited partner, additional limited partner, or substituted limited partner.
Terms Used In N.Y. Partnership Law 115-A
- Complaint: A written statement by the plaintiff stating the wrongs allegedly committed by the defendant.
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
- Plaintiff: The person who files the complaint in a civil lawsuit.
- Remainder: An interest in property that takes effect in the future at a specified time or after the occurrence of some event, such as the death of a life tenant.
- Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
2. In any such action, it shall be made to appear that at least one plaintiff is such a limited partner, additional limited partner or substituted limited partner at the time of bringing the action, and that he was such at the time of the transaction of which he complains, or that his status as substituted limited partner devolved upon him by operation of law or pursuant to the terms of the certificate of limited partnership or written partnership agreement in effect at the time of the transaction of which he complains.
3. In any such action, the complaint shall set forth with particularity the efforts of the plaintiff to secure the initiation of such action by the general partner or partners, or the reasons for not making such effort.
4. Such action shall not be discontinued, compromised or settled, without the approval of the court having jurisdiction of the action. If the court shall determine that the interests of the limited partners, additional limited partners or substituted limited partners, will be substantially affected by such discontinuance, compromise or settlement, the court, in its discretion, may direct that notice, by publication or otherwise, shall be given to the limited, additional or substituted limited partners whose interests it determines will be so affected; if notice is so directed to be given, the court may determine which one or more of the parties to the action shall bear the expense of giving the same, in such amount as the court shall determine and find to be reasonable in the circumstances, and the amount of such expense shall be awarded as special costs of the action and recoverable in the same manner as statutory taxable costs.
5. If the action on behalf of the limited partnership was successful, in whole or in part, or if anything was received by the plaintiff or plaintiffs or a claimant or claimants as a result of a judgment, compromise or settlement of an action or claim, the court may award the plaintiff or plaintiffs, claimant or claimants, reasonable expenses, including reasonable attorneys' fees, and shall direct him or them to account to the partnership for the remainder of the proceeds so received by him or them. This paragraph shall not apply to any judgment rendered for the benefit of injured limited, additional or substituted limited partners only and limited to a recovery of the loss or damage sustained by them.