Court Opinion

ID: 9756724
Source: CourtListenerOpinion
Date Created: 2023-08-28 21:49:55.555588+00
Date Added: 2024-06-11T07:28:28.729591
License: Public Domain

Dissenting Opinion by
Justice ABRAMSON.
I respectfully dissent. The majority correctly concludes that the restructuring at issue in this case was not prohibited by KRS 275.370, but then proceeds to upend Kentucky business law by declaring the general partners of a limited partnership breached a fiduciary duty to a limited partner by engaging in a transaction which was not only authorized by the partnership agreement but which advanced the interests of all partners in a manner that has caused the single complaining limited partner, Shirley Lach, no legal damage. The majority veers off course by stating, blithely, that (1) the Limited Partnership Agreement cannot mean what it actually says and (2) the transfer of partnership assets was in violation of KRS 362.490, a position unsupported by the cited case law from other states and, more importantly, a conclusion wholly at odds with the undisputed facts of this case. The circuit court and Court of Appeals dealt with this complex business matter appropriately, reaching the correct legal conclusions. We should do likewise by affirming.

RELEVANT FACTS

In June, 1981 (not 1986), Shirley Lach and her then-husband, Lynwood Wiseman, entered into a joint venture known as Richmond Road/Man O’ War Associates (the Joint Venture) with Linda Poole and trustees for various trusts created for the Miller family. The Joint Venture purchased property at the corner of Richmond Road and Man O’ War Boulevard in Fay-ette County on which a shopping center was to be developed. The Joint Venture subsequently leased the property to MOW Place Ltd. (MOW Place), a Kentucky limited partnership which had as its sole general partner a limited partnership created in August, 1986, and known as Man O’ War *573Limited Partnership. This second limited partnership (Limited Partnership) is the focus of this litigation.
I. The Limited Partnership
The Limited Partnership had the following stated purpose: “The purpose of the partnership is to enter into joint ventures and carry on the business of leasing real property and developing and operating shopping centers.” Certificate of Limited Partnership, ¶2. The only general partners were Robert Miller and Lynwood Wiseman (General Partners). The limited partners were Harry Miller, Shirley Wise-man (now Lach) and Linda Poole Mag-gard. The Certificate of Limited Partnership provided that the partnership would not terminate upon the death, retirement or insanity of one General Partner (as provided by Kentucky statute) but rather the remaining General Partner would continue the business. Certificate of Limited Partnership, ¶ 13.
The accompanying Limited Partnership Agreement had the following provisions relevant to the present dispute:
2. (b) Termination
The Limited Partnership shall terminate upon the happening of any one of the following events: (i) agreement of both General Partners or [ii] August 1, 2036, whichever occurs first.
7. Management, Duties and Restrictions. During the continuance of this partnership, the rights and liabilities of the General Partners and Limited Partners respectively shall be as follows:
(a) The General Partners shall manage the Partnership business in all aspects, which shall include, but shall not be limited to, the following rights and duties: ...
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9. To take such other action, execute and deliver such other documents, and perform such other acts as the General Partners may deem necessary, appropriate, or incidental to carrying out the business and affairs of the Partnership.
(b) No Limited Partner shall have either the obligation or the right to participate in the management of the Partnership....
In early 1988, after a ten and one-half year marriage, Lach and Lynwood Wise-man divorced in a proceeding which she herself describes as “hotly contested.” From that point forward, Robert Miller was the liaison or go-between who communicated with Lach about partnership matters. Correspondence over the next fourteen years reveals Lach closely monitored Limited Partnership affairs, including asking that documents be forwarded to her attorney and accountants as early as 1993. In September, 2001, Lach asked that the partners’ monthly distribution be raised, suggesting $15,000 to $18,000 per month, and she inquired about a $300,000 “Advance to Wiseman Homes” appearing on the financial reports. The latter inquiry ultimately led to the discovery in 2002 that Keith Cunningham, Lynwood’s nephew who had been entrusted with management responsibilities in several of Wiseman’s businesses, including the Limited Partnership, had stolen in excess of $250,000 from the Limited Partnership. Lynwood paid back all of the stolen funds with interest, making the Limited Partnership whole, and also stepped down as manager of the shopping center.1 A professional management company was retained at that time and continues to provide day-to-day management of the shopping center.
*574The year 2002 proved to be a watershed year for the Limited Partnership. Robert Miller died on August 18, 2002. A previously treated cancer had returned in March, 2002, and without any prospect of recovery, Miller, anticipating his imminent death, set about planning for the continuation of the Limited Partnership. As previously noted, the Certificate of Partnership allowed the Limited Partnership to continue under the direction of one General Partner but that one remaining partner was Lynwood Wiseman, an 81 year-old man with his own serious health problems. Also, Robert Miller knew that the acrimonious relationship between Wiseman and his ex-wife, Lach, would make conducting partnership affairs difficult and, more importantly, upon Lynwood’s death, in the absence of another general partner, the Limited Partnership would dissolve as a matter of law. This would cause a domino effect in which MOW Place would then also dissolve as a matter of law because of the lack of a general partner (i.e. the Limited Partnership). This series of events could leave the Joint Venture without a lessee, Miller feared. The worst case scenario included a default on the Limited Partnership loan and serious tax consequences for all partners in the Limited Partnership.
Robert Miller proposed avoiding this chain of events by substituting his brother-in-law, Jeff Mullens (who had been a limited partner since 1986) and his son, Jonathan Miller (who had been a limited partner since 1988) as general partners in his stead. This would result in three general partners, including the elderly Lynwood Wiseman. Lach was the only partner in the Limited Partnership who objected to this proposal and she countered with a proposal that her daughter, Sherri MeVay (a lawyer who was not a Limited Partnership partner) be substituted for Mullens. All of the partners, except Lach, objected to this proposal. Thus 72.972% of the Limited Partnership interests favored Robert Miller’s “succession plan” while 27.027% (Lach alone) favored Laeh’s plan.
After Lach rejected Miller’s proposal in early April 2002, a law firm retained by the Limited Partnership’s management proposed a transaction which would avoid Miller’s concerns about the continued viability of the Limited Partnership. The law firm proposed two scenarios “with the goal of eliminating the ability of any one limited partner of the Limited Partnership to prevent any action of the Limited Partnership necessary to ensure it continues to be a going concern by voting against such action.” All of the partners in the Limited Partnership, except Lach, agreed to a restructuring which was described by the law firm as follows:
... the Limited Partnership would form a limited liability company (“LLC”) and transfer its interest as a general partner of M.O.W. Place, Ltd., a Kentucky limited partnership (“General Partner Interest”), to the LLC in exchange for an interest as a member of the LLC. Immediately thereafter, the general partners (Bob Miller and Lynwood Wiseman) of the Limited Partnership would terminate the Limited Partnership in accordance with Section 2(b) of the Limited Partnership Agreement and liquidate the Limited Partnership.
In the first restructuring scenario, the Limited Partnership would liquidate by distributing the LLC membership interest pro rata to each of the partners of the Limited Partnership. The end result of this transaction would be a reconstitution of the Limited Partnership as a limited liability company. The limited partners’ veto power would be eliminated, but the economic interests of the partners would remain unchanged. Also, there *575would be no tax consequences to the partners.
The Operating Agreement of the LLC would appoint Jonathan Miller, Jeff Mullens and Lynwood Wiseman as the managers of the LLC and would provide that the managers may only act on behalf of the LLC in accordance with the decision of a majority of the managers. The managers would be able to take any and all action on behalf of the LLC except that the managers would not be able to (i) merge the LLC with another entity, (ii) file a bankruptcy petition on behalf of the LLC, (in) dissolve the LLC, or (iv) amend the Operating Agreement or Articles of Organization without the consent of a majority-in-interest of the members (based upon their economic interests in the LLC).
Any of the limited partners who refuse to sign the Operating Agreement would be treated as transferees of an interest in the LLC and would not be admitted as members of the LLC. As mere transferees, they would not have any voting rights with respect to the LLC, although they would have economic rights and be entitled to distributions from the LLC. The only way for a limited partner receiving an interest as a member of the LLC to receive voting rights with respect to the LLC would be to agree in writing to be bound by the provisions of the Operating Agreement.
This restructuring was accomplished with the creation of Man O’ War Management LLC (the Limited Liability Company) on May 16, 2002. Lach received the same ownership percentage in the Limited Liability Company that she held in the Limited Partnership. However, because she refused to sign the Assignment tendered to her, she has no voting rights, simply economic rights including distributions. The Limited Partnership remained in existence until May 31, 2002, when it was dissolved by the General Partners as provided for in paragraph 2(b) of the Limited Partnership Agreement.
II. Circuit Court Action
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 *576that [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.
III. Court of Appeals
In an unanimous opinion, the Court of Appeals affirmed. The Court found no conversion within the meaning of KRS 275.370. Significantly, the Court of Appeals found no violation of KRS 362.490 for the following reasons:
KRS 362.490 provided that a general partner could not undertake any action that would make it impossible to carry on the ordinary business of the partnership without the consent or ratification of all of the partners. We cannot conclude that the transfer of assets made it impossible for the partnership to carry on business because the partnership’s interest as the sole general partner of M.O.W. was not simply funneled into the LLC, but was exchanged for an interest that made the partnership the sole member of the LLC. The purpose of the partnership was not limited to being the sole general partner of M.O.W., but included the leasing of real property and the development and operation of shopping centers. Also, the LLC and the partnership coexisted for a period of time before the partnership was terminated. At no time was the partnership without some form of asset. Therefore, we cannot conclude that the transfer violated KRS 362.490(2).
The Court summarily rejected Lach’s fiduciary duty claims, noting there was no misrepresentation or concealment; she was never “frozen out” of the entity but had the same percentage share in the Limited Liability Company as in the Limited Partnership; and she received all she was entitled to upon termination of the Limited Partnership. The Court of Appeals concluded by finding Lach’s allegations she had been improperly denied access to attorney-client communications between the Limited Partnership and counsel regarding the restructuring were moot as she had no viable legal claims.

ANALYSIS

Proper resolution of this case begins with recognition of what makes a limited partnership a limited partnership. As a leading Kentucky commentator describes it:
In a limited partnership, a member will be either a general partner or a limited partner. The status of a general partner is identical to that of a partner in a general partnership. However, the status of the limited partner differs substantially from a general partner in two ways. First, the limited partner’s liability is limited to his contribution to the limited partnership. The limited partner, in this regard, is similar to a shareholder of a corporation in that he is insulated from the obligations and liabilities of the partnership to the extent they exceed his capital contribution. Second, in order to maintain the limited liability status, a limited partner is not allowed to participate in the management and control of the activities of the partnership. It is the general partner’s responsibility to manage the business operations of the limited partnership.
Seiffert, Kentucky Practice — Corporations, § 1:4 (2008).
In Kentucky, the rights accorded a limited partner derive primarily from the parties’ partnership agreement and the Kentucky Revised Statutes. Kentucky also recognizes the common law duty of good faith owed by each partner to each and every other partner. See Axton v. Kentucky Bottlers Supply Co., 159 Ky. 51, 166 S.W. 776, 778 (1914) (“It is the duty of *577each partner to act with the utmost good faith towards his copartners ... A person will not be permitted to benefit himself at the expense of the firm.”)
IY. There was no Conversion of the Limited Partnership in Violation of KRS 275.370
Lach first alleges that the restructuring which produced the Limited Liability Company violated KRS 275.370 because it was the conversion of a limited partnership to a limited liability company without consent of all partners, general and limited. Every court, including this one, has rightly rejected her argument. KRS 275.370(1) provides that a limited partnership “may be converted to a limited liability company pursuant to this section.” The language is clearly permissive, denoting a legislative intent that limited partnerships have an option of proceeding under the statute but are not limited to restructuring as a limited liability company only pursuant to the statute.
Moreover, as the majority acknowledges, KRS 275.370 envisions a transformation of a single entity. Once all of the statutory steps are complied with and articles of organization are filed with the Secretary of State the registration of the limited partnership “shall be deemed can-celled ...” KRS 275.370(3)(e). Like the old phrase “the King is dead, long live the King”, the statute provides for an uninterrupted succession — “the limited partnership is dead, long live the limited liability company.” An uninterrupted succession or seamless transformation is not what happened in this case. As the trial court, the Court of Appeals and the majority recognizes, the Limited Liability Company was formed and existed concurrently with the Limited Partnership. Notably, the Limited Partnership was not created just to manage the Man O’ War property but as quoted above to “enter into joint ventures and carry on the business of leasing real property and developing and operating shopping centers.” Thus, the transfer of the Limited Partnership’s general partnership interest in MOW Place to the Limited Liability Company did not deprive the Limited Partnership of all of its lawful purpose. It could have continued to exist as a vehicle for leasing other real property or developing and operating other shopping centers, albeit an unlikely scenario given the status of relations between Lach and the other parties. Regardless, the permissive language of KRS 275.370 and the inescapable fact that the Limited Partnership and Limited Liability Company legally existed simultaneously preclude any argument that the Limited Partnership was improperly converted to a limited liability company. While Robert Miller may have occasionally used the word “conversion” in discussing the restructuring, he plainly misspoke because there was no conversion as a matter of law. KRS 275.370 was not violated.
Y. KRS 362.490 Was Not Violated by the Restructuring Because the Business of the Limited Partnership Continued in a Different Form with the Same Participants
In 1986, KRS 362.490 provided in relevant part:
Rights, powers and liabilities of a general partner.
A general partner shall have all the rights and powers and be subject to all the restrictions and liabilities of a partner in a partnership without limited partners, except that without the written consent or ratification of the specific act by all the limited partners, a general partner or all of the general partners have no authority to ...
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(2) Do any act which would make it impossible to carry on the ordinary business of the partnership, ...
*578Kentucky’s Uniform Limited Partnership Act, adopted in 1970, was amended in 1988 with the passage of the Revised Uniform Limited Partnership Act (and revised again in 2006). Although different statutory provisions are applicable in the 1970 and 1988 versions, the gist is the same, i.e., general partners cannot, without the consent of all partners, do any act which would make it “impossible to carry on the ordinary business of the partnership.”
Lach proposes and the majority accepts the proposition that this statute means feuding partners must remain locked together in a dysfunctional limited partnership without recourse to other business entities for carrying on their business even if the general partners are expressly authorized to simply dissolve the limited partnership and to “take such other action, execute and deliver such other documents, and perform such other acts as the General Partners may deem necessary, appropriate, or incidental to carrying on the business and affairs of the Partnership.” Limited Partnership Agreement, ¶ 7(a)(9). This wholly illogical conclusion is premised on cases which are so distinguishable from this ease as to be irrelevant.
In Gundelach v. Gollehon, 42 Colo.App. 487, 598 P.2d 521 (1979), Gundelach was a limited partner in a limited partnership created for the stated purpose of acquiring, owning, managing, improving and leasing a particular 112 acre parcel of land in Perry Park and to engage in business activities related “or incidental thereto.” When the general partners saw an opportunity to combine their interests from three separate limited partnerships to obtain a more appealing parcel of property in Perry Park, they sought approval from the various limited partners for a consolidation of the three partnerships. Gundelach refused to consent but the transaction proceeded anyway and the very piece of property which Gundelach had invested in through the purchase of his limited partnership interest was deeded over to the seller of the allegedly more lucrative property. In that case, the Colorado Court of Appeals understandably concluded that the general partners had undertaken an act which made it impossible to carry on the ordinary business of the partnership. As noted, the ordinary business of that particular partnership was the purchase, development and lease of the specific 112 acre parcel which the General Partners sold off to a third party. Here, Lach’s interest was in a limited partnership whose purpose was not limited to operation of a particular property but, more importantly, the Man O’ War property which had been the focus of the partnership, remained with the Limited Liability Company and provided Lach with income in the exact percentage of ownership as she had held in the Limited Partnership. Clearly, Gundelach is factually distinguishable. As the Court of Appeals found, in this case the same business was being conducted before and after the restructuring, just through a different legal entity.
Newburger, Loeb & Co., Inc. v. Gross, 563 F.2d 1057 (2nd Cir.1977) is exceedingly more complex but just as distinguishable. While the case started as a securities churning case, antitrust and partnership fiduciary duty counterclaims were added, some of which were subject to the ancillary jurisdiction of the federal district court. Two limited partners in the Newburger, Loeb partnership alleged that two recently admitted general partners, two outside consultants, in-house and outside legal counsel and others conspired to transform the partnership into a corporation and to gain control of its assets for a small investment. 563 F.2d at 1062. When the limited partners refused to agree to the transfer of partnership assets to the corporation, the defendants allegedly threatened two separate lawsuits, one for securities churning and *579one for fraudulently inducing the recently admitted general partners to invest in Newburger, Loeb. The limited partners alleged other coercive tactics were also employed. The district court found the transfer of the partnership assets was a violation of New York Partnership law prohibiting acts that would make it, “impossible to carry on the ordinary business of the partnership.” In the trial judge’s words, the defendants were part of a plot to “take over the new operation on a shoestring and directly enrich themselves.” 563 F.2d at 1067. Against this backdrop the Second Circuit stated:
.... However, there is simply no language in the Partnership agreement that can be construed as granting the general partners the right to conduct the February 11 transfer; indeed, this is the precise conclusion reached by the Rosenman, Colin memorandum of January 25, 1971 discussed supra. The February 11 transfer did not merely terminate the Partnership (which, in fact, is what Gross, Bleich and Donoghue sought by liquidation), it transferred all of the Partnership assets, including the capital interests of Bleich and Donoghue, to an entirely new entity, with new management and different rights between the parties. This drastic change in the rights and relations of the parties went far beyond any powers granted the general partners to terminate or manage the business....
Id. at 1075. Without question, Newburqer, Loeb is distinguishable. Not only were threats and coercive tactics used, but most importantly the partnership agreement did not grant the general partners the authority to engage in the challenged transaction and the result was a “drastic change in the rights and relations of the parties.... ” Interestingly, the Newburqer, Loeb court cited in contrast Mist Properties, Inc. v. Fitzsimmons Realty Co., 228 N.Y.S.2d 406 (Sup.Ct.1962), a case in which a transfer of partnership assets was held not to violate the same New York Partnership law because the partnership agreement allowed the general partners to terminate the partnership at any time and delegated to them the authority to manage the business. Again, the Newburqer, Loeb court emphasized that there was no language in the Newburger, Loeb partnership agreement which authorized the machinations of the defendants and there was no credible argument that “the transfer was ‘necessary to enable the Partnership to carry on its business.... ” 563 F.2d at 1075.
In this case, as in Mist Properties, the parties’ limited partnership agreement allowed for the actions taken by the general partners. They had the authority to undertake actions “necessary, appropriate, or incidental to carrying out the business and affairs of the [Limited] Partnership” and the authority to dissolve the Limited Partnership. There was no act that made it “impossible” to carry on the business of the Limited Partnership. Indeed, it is still being carried on through the Limited Liability Company for Lach’s benefit and all the other partners’ benefit in the same proportionate interests as existed in the Limited Partnership. The same business is simply being carried on in another legally authorized (and most would acknowledge significantly superior) legal form. There is no credible basis for finding that KRS 362.490 was violated.
VI. There Was No Breach of Fiduciary Duty.
After discussing Gundelach, Newburger, Loeb, and Mist Properties, the majority states:
Simply put, we find that the general partner’s (sic) rights under the partnership agreement to (1) terminate the partnership at any time upon agreement of the general partners, *580and (2) to act upon behalf of the Partnership in matters that are “necessary, appropriate, or incidental to carry out its business,” can be not construed to allow them the power to transform the partnership into a limited liability company, in order to favor a majority of the partners in their selection, or substitution, of the general partners/managers of the business, without the approval of all the limited partners.
No authority is cited for this statement because it is simply a pronouncement, one which does not flow from the aforementioned cases. Having pronounced that the Limited Partnership Agreement cannot be construed to allow the formation of the Limited Liability Company, the majority proceeds to find the transfer of the partnership assets to the Limited Liability Company and the restructuring of the business to be breaches of fiduciary duties, again without citation to anything other than general fiduciary duty cases having no comparison to the facts before this Court. See, Axton v. Kentucky Bottlers, supra, (involving a partner who cancelled partnership contracts and diverted opportunities to his new competing business); Anthony v. Padmar, Inc., 320 S.C. 436, 465 S.E.2d 745 (App.1995) (sale of partnership assets to a third party upheld but general partners liable for failing to receive the majority vote required by the partnership agreement and for breach of fiduciary duty by “intentionally failing to disclose information, misrepresenting and manipulating the voting process” and mishandling the sale); VanHooser v. Keenon, 271 S.W.2d 270 (Ky.1954) (five partners who engaged in self-dealing were forced to account to their partners for money obtained on an option which rightfully belonged to the entire partnership).
After this the majority throws it all back to the trial judge with directions to determine a remedy. Typically, a breach of fiduciary duty in the partnership context results in an accounting (because profits, assets or opportunities have been diverted) or simply damages (again for the profits lost or losses incurred as a result of the breach.) Bromberg and Ribstein on Partnership ¶ 16.07(f) (2005) (collecting cases illustrating remedies including accounting, damages, refund of partnership contributions, compelled transfers and the setting aside of “conflict” transactions).2 Here, there is no allegation of monetary damage because the Limited Liability Company is as successful as the Limited Partnership. The only thing Lach lost in the restructuring, the only thing, was her personal choice for General Partner, a choice unacceptable to the holders of 72.972% of the Limited Partnership interests.
The majority apparently thinks it only fair that Lach have had her choice as to one of the three general partners and thus declares a fiduciary duty was breached. There is absolutely no legal basis for this conclusion. Were the General Partners supposed to ignore their own best business judgment and the wishes of all other partners in the Limited Partnership about the identity of the new General Partners? Would that not have been a breach of fiduciary duties to the other seven limited partners who disagreed with Lach and who held 39.5223% as opposed to Lach’s 27.0270% of the Limited Partnership? Were the General Partners supposed to ignore those limited partners and favor Lach? Apparently so, but why?
In short, the majority finds a breach of fiduciary duty where there is none, and then sends the case back to the trial judge to fashion a remedy. But first — what are *581Lach’s legally cognizable damages? Does not getting your choice for General Partner because all the other partners disagree constitute damage? Assuming in some topsyturvy world this constitutes damage, what is it worth? Surely, there is no purer form of speculation. The majority’s breach of fiduciary duty pronouncement on these facts is not only legally unsound, it leads to a virtual “Alice in Wonderland” world of remedies.
To the extent the majority would concede that Lach could not force her choice for General Partner on the other partners but argues that the General Partners had a fiduciary obligation to continue negotiating the issue with her, what about the indisputable facts? Time was of the essence. In April, 2002, Robert Miller was dying; he passed away approximately 90 days after the May, 2002 restructuring following weeks of hospice care for liver cancer. Without an agreement on the new General Partner(s) or the restructuring, the elderly Lynwood Wiseman (who himself died during the pendency of this case) would have been the only surviving General Partner. In Robert Miller’s words from a March, 2002, letter, “[Lach] hates Lyn-wood passionately; their divorce lawsuit lasted for years and years after they were technically divorced.” Was Robert Miller supposed to relegate the other partners to an easily foreseeable and similarly protracted fight waged by Lach and Lynwood Wiseman? How long were the General Partners (particularly Miller) supposed to negotiate before resorting to other legal means that would protect the greater interest of the Limited Partnership and the interests of the other partners? It is simply legally unjustified to look at the facts that existed and “divine” that the General Partners breached their fiduciary duties to Shirley Lach. Indeed, they did exactly what their fiduciary duties demanded of them — they exhibited the utmost good faith to all the parties and acted in the best interests of the entire Limited Partnership by undertaking the restructuring, resulting in a profitable Limited Liability Company.

CONCLUSION

The restructuring did not violate KRS 275.370 or KRS 362.490. Moreover, it was a permissible action undertaken by the General Partners in the interest of all partners and was not a breach of any fiduciary duties. The Fayette Circuit Court and the Court of Appeals should be affirmed.
MINTON, J., joins.

. Although Lach addresses this issue, there was no evidence of impropriety by the General Partners and she did not pursue any claims based on this incident.

. Notably, there is no case in the fiduciary duty section of Bromberg and Ribstein on Partnership comparable to the one before this Court.