Opinion ID: 2344727
Heading Depth: 2
Heading Rank: 2

Heading: Circuit Court Action

Text: Lach brought suit alleging that the restructuring violated Kentucky law and that the General Partners had breached their fiduciary duties to her as a limited partner. She did not ask for a jury trial but sought to have the transaction undone and damages awarded. Both Lach and the defendants eventually moved for summary judgment. In oral findings of fact and conclusions of law, the trial court first addressed a document production issue. The court held that Lach, a limited partner, was not entitled to privileged attorney-client communications between the Limited Partnership and the law firm, analogizing Lach to a shareholder who similarly has no right to privileged communications. Then, noting that limited partnerships are creatures of statute, the trial court found that the acts taken did not result in a conversion of the Limited Partnership in violation of KRS 275.370 entitled Conversion of partnership or limited partnership to limited liability company. He further found no violation of KRS 362.190 because the business of the Limited Partnership was carried on just as it had been before, benefiting the same people but operating in a different organizational structure. Finally, he found no breach of fiduciary duty because the actions (1) were expressly authorized by the Limited Partnership Agreement and (2) were undertaken for sound business reasons. The trial judge found that Mr. Miller was gravely ill and something had to be done. Further, he noted that the defendants had an obligation to act in the best interest of all partners and not one dissenter. He noted it was unfortunate that [the parties] could not agree but they couldn't. The trial judge entered a judgment granting the defendants' summary judgment motion on Counts I and II of the Complaint and denying Lach's motion regarding those counts.