Opinion ID: 6559
Heading Depth: 2
Heading Rank: 1

Heading: Derivative Claims by Limited Partners

Text: 11 Limited partners have less management responsibility for the partnership than its general partners. With that reduced responsibility and reduced exposure to liability come reduced individual rights. It is well-settled, a New York federal court recently observed, that the only direct lawsuit against general partners that a limited partner can bring in an individual, non-representative capacity consists of an action for an accounting. 6 12 Limited partners can, if permitted by statute, sue derivatively to enforce rights belonging to the partnership. 7 In such derivative lawsuits, the form of the lawsuit does not obscure its substance: it is the partnership's rights, not the limited partner's, that the lawsuit seeks to vindicate. 8 Because the partnership possesses the right sought to be enforced, the partnership is, at a minimum, the real party in interest in a derivative lawsuit. 9