Opinion ID: 754135
Heading Depth: 2
Heading Rank: 2

Heading: Use of Identity-of-Interest Companies

Text: 8 Defendants on March 2, 1995, acting pursuant to § 3.03 of the Academy agreement and § 3.09 of the Buckingham agreement, wrote NCAS and gave notice that they were withdrawing their consent for the use of affiliated persons (also referred to as identity-of-interest companies) to provide contract services to the partnerships. An affiliated person, as defined under the agreements, is one who is a partner, related to a partner, or controls, is controlled by, or under common control with a partner. 9 The magistrate judge found that plaintiff, as the managing partner, had contracted with the following affiliated persons: Alpha Plumbing and Heating Corporation; Durable Painting Corporation; Noral Security Systems, Inc.; Paramount Boiler and Sewer Services, Inc.; and NCAS Realty Management (plaintiff negotiated with itself as the managing agent and was paid a management fee to operate the housing developments under the partnership agreements). Although the partnership agreements provided that the partnerships could contract with such entities only if both general partners gave their approval, plaintiff admits it took no steps to comply with these terms after it received defendants' March 2 letter, saying that its failure to act was pursuant to advice of counsel.