Court Opinion

ID: 4290822
Source: CourtListenerOpinion
Date Created: 2018-07-02 20:08:01.599971+00
Date Added: 2024-06-11T14:38:17.580048
License: Public Domain

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

In re BAY HILLS EMERGING                 :
PARTNERS I, L.P.; BAY HILLS              :
EMERGING PARTNERS II, L.P.;              :
BAY HILLS EMERGING                       :      C.A. No. 2018-0234-JRS
PARTNERS II-B, L.P.; and BAY             :
HILLS EMERGING PARTNERS III,             :
L.P., Delaware limited partnerships      :

                        MEMORANDUM OPINION

                        Date Submitted: May 17, 2018
                         Date Decided: July 2, 2018

A. Thompson Bayliss, Esquire and E. Wade Houston, Esquire of Abrams &
Bayliss LLP, Wilmington, Delaware and James C. Rutten, Esquire and Erin J.
Cox, Esquire of Munger, Tolles & Olson LLP, Los Angeles, California, Attorneys
for Plaintiffs BHEP GP I, LLC; BHEP GP II, LLC; BHEP GP II-B, LLC;
BHEP GP III, LLC; and Bay Hills Capital Management, LLC.

Kevin M. Gallagher, Esquire of Richards, Layton & Finger, P.A., Wilmington,
Delaware and Mark C. Goodman, Esquire of Baker & McKenzie LLP,
San Francisco, California, Attorneys for Plaintiffs/Nominal Plaintiffs Bay Hills
Emerging Partners I, L.P.; Bay Hills Emerging Partners II, L.P.; Bay Hills
Emerging Partners II-B, L.P.; and Bay Hills Emerging Partners III, L.P.

Brett D. Fallon, Esquire, Patricia A. Winston, Esquire and Travis J. Ferguson,
Esquire of Morris James LLP, Wilmington, Delaware and Mark A. Cameli,
Esquire, Ryan S. Stippich, Esquire and Brent A. Simerson, Esquire of Reinhart
Boerner Van Deuren S.C., Milwaukee, Wisconsin, Attorneys for Defendants
Kentucky Retirement Systems, Kentucky Retirement Systems Pension Fund, and
Kentucky Retirement Systems Insurance.

SLIGHTS, Vice Chancellor
          A limited partner in four Delaware limited partnerships invoked its

“for cause” removal rights to remove the general partners of each of the four

entities.     The general partners challenge the bona fides of their removal.

They filed this action against the limited partner and two related entities

(collectively, “Defendants”) to obtain declarations that the removal was improper

and that they continue as the rightful managers of the limited partnerships.

Shortly after this action was filed, the limited partner initiated litigation in the

Commonwealth of Kentucky in which it seeks judicial declarations that its

removal of the general partners was proper along with other legal and equitable

relief.

          Defendants have moved to dismiss this action principally on the ground that

a forum selection clause in the relevant entity agreements requires Plaintiffs to

litigate this dispute in Kentucky—more specifically, in Franklin County Circuit

Court. I disagree and, thus, deny dismissal. The operative forum selection clause

is permissive, not mandatory. It provides that Kentucky’s Franklin County

Circuit Court is a proper venue for the resolution of partnership-related disputes,

but it does not designate that court as the exclusive forum for the resolution of

such disputes. Nevertheless, because there is a nearly identical action pending in

Kentucky—albeit one that was filed eight days after this action—and because the

relevant entity agreements are principally governed by Kentucky law, the Court

will stay this action sua sponte in favor of the Kentucky action.

                                           1
                               I. BACKGROUND

         The facts are drawn from the complaint and documents incorporated

therein as well as additional materials submitted by the parties in connection with

Defendants’ motion to dismiss.1

     A. The Parties

         Plaintiffs are four Delaware limited partnerships (each a “Fund” and

collectively the “Funds”),2 their respective general partners (each a “Fund GP”

and collectively the “Fund GPs”),3 all of which are Delaware limited liability

companies, and Bay Hills Capital Management, LLC (“Bay Hills”), 4 also a

Delaware limited liability company. Bay Hills is an investment firm that created

the Funds between 2007 and 2013 as “funds of funds”—“i.e., investment funds

that invest in underlying private equity funds”—pursuant to the Delaware Revised

Uniform Limited Partnership Act (“DRULPA”).5 Around the same time, Bay

1
 Troy Corp. v. Schoon, 2007 WL 949441, at *2 (Del. Ch. Mar. 26, 2007) (holding that
under Rule 12(b)(3), “the court is not shackled to the plaintiff’s complaint and is
permitted to consider extrinsic evidence from the outset” (internal quotation omitted)).
2
  The Funds are Bay Hills Emerging Partners I, L.P. (“Fund I”) established in 2007, Bay
Hills Emerging Partners II, L.P. (“Fund II”) established in 2009, Bay Hills Emerging
Partners II-B, L.P. (“Fund II-B”) established in 2010, and Bay Hills Emerging Partners
III, L.P. (“Fund III”) established in 2013. Amended Verified Complaint (“Compl.”)
¶¶ 5, 34.
3
 The Fund GPs are BHEP GP I, LLC (“Fund I GP”), BHEP GP II, LLC (“Fund II GP”),
BHEP GP II-B, LLC (“Fund II-B GP”) and BHEP GP III, LLC (“Fund III GP”).
Compl. ¶¶ 18–21.
4
 Compl. ¶¶ 18–26. More specifically, the Funds are Nominal Plaintiffs as to Count I
and Plaintiffs as to Count II. Id. at ¶¶ 22‒25.
5
    Compl. ¶ 3.

                                           2
Hills also created the Fund GPs to act as sole general partners of the Funds.6 Bay

Hills itself serves as the investment advisor for each Fund, and Bay Hills’

employees manage and operate the Fund GPs.7 All Plaintiffs are headquartered

in San Francisco, California.8

         Defendant, Kentucky Retirement Systems (“KRS”), is “a statutorily created

entity that manages and administers the retirement system of the Commonwealth

of Kentucky.” 9 KRS is the sole limited partner of each of the Funds. 10

Defendants, Kentucky Retirement Systems Pension Fund and Kentucky

Retirement Systems Insurance Fund, are also “statutorily created entit[ies]”

responsible for “certain pension [and insurance] plans that KRS oversees and

manages.”11

6
    Compl. ¶¶ 1, 31, 34.
7
    Compl. ¶ 34.
8
    Compl. ¶¶ 18–26.
9
 Compl. ¶ 27; see also Ky. Rev. Stat. §§ 61.510‒61.705; Commonwealth v. Ky. Ret.
Sys., 396 S.W.3d 833, 837 (Ky. 2013).
10
     Compl. ¶¶ 31, 34.
11
     Compl. ¶¶ 28–29.

                                         3
     B. The LPA

       Each Fund is governed by a limited partnership agreement (the “LPA”).12

Relevant to the parties’ dispute are the LPA’s provisions governing removal of

the general partner, forum selection and choice of law.

       LPA § 7.4 addresses removal of the general partner, and provides:

       [each Fund’s] General Partner may be removed as General Partner
       for Cause upon the written notice of the Limited Partner. Such
       written notice shall be delivered to the General Partner and shall state
       in reasonable detail the Cause for removal and the effective date of
       such removal, which effective date may be immediately upon
       delivery of the notice or thereafter; provided, however, that the
       General Partner shall have sixty (60) days from receipt of such notice
       to remedy or otherwise cure such Cause for removal. For purposes
       of this Section 7.4, “Cause” shall mean (i) the commission by the
       General Partner of any act of gross negligence or reckless or willful
       misconduct which, in each case, materially and adversely affects the
       Partnership, (ii) the conviction of the General Partner of any felony,
       or (iii) the commission by the General Partner of a material violation
       of applicable United Stated federal securities law.

       LPA § 12.8, under the heading “Applicable Law; Jurisdiction and Venue,”

provides:

       [e]xcept as otherwise provided by the [DRULPA], this Agreement
       and the rights and obligations of the parties hereunder shall be
       governed by and interpreted, construed and enforced in accordance
       with the laws of the Commonwealth of Kentucky (regardless of the
       choice of law principles of the Commonwealth of Kentucky or of
       any other jurisdiction). Each of the Partners hereby consents to the
       jurisdiction of the courts of the Commonwealth of Kentucky and
       further consents that venue shall lie in the Franklin Circuit Court
       located in Franklin County, Kentucky.

12
  According to the parties, the provisions relevant to this motion are substantially
identical in each Fund’s LPA. See Defs.’ Opening Br. in Supp. of their Mot. to Dismiss
(“Defs.’ Opening Br.”) 5; Compl. ¶ 34. Accordingly, I focus on the LPA provided as
Exhibit 1 to the Complaint (the Agreement of Limited Partnership of Fund I).

                                          4
      C. Purported Removal of the Fund GPs

         On May 10, 2017, KRS served a notice of removal on the Fund GPs in

which it claimed, among other things, that the Fund GPs (1) “engaged in willful

and reckless disregard of KRS’s rights” by replacing an auditor without

consulting or obtaining approval from KRS, (2) manipulated overhead expenses

in a grossly negligent manner and (3) deliberately attempted to misappropriate

assets.13 Given these infractions, KRS asserted it had “Cause” under the LPA to

remove the Fund GPs as general partners of the Funds.14 KRS withdrew its May

2017 notice of removal in July 2017.15 The parties disagree as to the reasons for

the withdrawal.16

         On February 8, 2018, KRS served a second notice of removal on the Fund

GPs.17 In this second notice, KRS alleged, among other things, that Fund GP III

materially breached Fund III’s LPA by being “‘lukewarm’ to KRS’ desired

transfer of Fund III’s assets and by not ‘enthusiastically endors[ing] that course

13
     Compl. ¶¶ 8–10.
14
     Compl. ¶ 8.
15
     Compl. ¶ 11.
16
  Plaintiffs allege KRS withdrew the first notice of removal because it was “[u]nable to
substantiate its accusations of ‘Cause.’” Compl. ¶ 11. According to KRS, it “withdrew
the removal notice without prejudice to re-instate it later . . . based on a number of
commitments made by [the Fund GPs, Bay Hills and Lance Mansbridge, the managing
partner of the Fund GPs]” with regard to their management of the Funds. Transmittal
Aff. of Travis J. Ferguson in Supp. of Defs.’ Mot. to Dismiss, Ex. A (“Kentucky
Compl.”) ¶ 126.
17
     Compl. ¶ 14.

                                           5
of action.’”18 KRS has declined to withdraw the second notice, which purports to

be effective as of April 9, 2018.19

      D. Procedural Posture

         On April 2, 2018, Plaintiffs filed their “Verified Complaint Pursuant to

6 Delaware Code §§ 17-110 and 17-111” along with a “Motion to Expedite and

for Status Quo Order.” The Court heard Plaintiffs’ motions on April 5, entered

the parties’ stipulated Status Quo Order and reserved decision on the motion to

expedite. 20 On April 9, Plaintiffs filed their “Amended Verified Complaint

Pursuant to 6 Delaware Code §§ 17-110 and 17-111” (the “Complaint”). 21

The Complaint sets forth two counts for declaratory relief: Count I seeks a

declaration pursuant to 6 Del. C. § 17-110 and 10 Del. C. § 6501 that KRS lacks

Cause to remove the Fund GPs and that the Fund GPs have a right to and do

18
   Compl. ¶ 14 (quoting Feb. 8, 2018 Ltr. from KRS, Compl. Ex. 9, at 5). “In October
2016, Fund III experienced a so-called ‘Key Person Event’ when an important employee
departed Bay Hills.” Compl. ¶ 12. This occurrence gave KRS a contractual right to
dissolve Fund III. Id. KRS took this opportunity and began transferring—or at least
attempting to transfer—fund assets to KRS. Id. According to Plaintiffs, “all but two of
the Underlying Funds [i.e., the private equity funds in which the Funds invest,
Compl. ¶ 43] have been unwilling to consent to the transfers that KRS has demanded.”
Compl. ¶ 13.
19
     Compl. ¶ 15.
20
  Tr. of Hr’g Apr. 5, 2018, D.I. 52, 4–5. The parties submitted a letter on the morning
of the hearing providing the Court with a stipulated Status Quo Order and then reiterated
their agreement on the Status Quo Order at the hearing. Id.; see also D.I. 11 (Bayliss
Ltr. Attaching Status Quo Order). The Court granted the motion to expedite following
oral argument on the motion to dismiss on May 17, 2018. Tr. of Hr’g May 17, 2018
(“May 17 Tr.”), 75:10.
21
     D.I. 18.

                                           6
remain as general partners of the Funds22; Count II seeks a declaration pursuant

to 6 Del. C. § 17-111 and 10 Del. C. § 6501 that the Fund GPs and Bay Hills

“have not breached, materially or otherwise, any contractual duty or other legal

duty in connection with the Funds.”23

         On April 10, Defendants filed an action in Franklin County, Kentucky,

requesting “remov[al] of Bay Hills as its investment manager and [] recover[y]

[of] damage[s] caused by Bay Hills’ misconduct” (the “Kentucky Action”). 24

Defendants bring nine counts in the Kentucky Action, one of which seeks a

declaratory judgment that the Fund GPs were properly removed as general

partners of the Funds.25

         On April 12, Defendants filed their motion in which they seek dismissal of

the Complaint on three grounds: (1) the LPA’s forum selection clause; (2) the

interests of comity and the doctrines of sovereign immunity and abstention; and

(3) forum non conveniens.26 According to Defendants, Plaintiffs were required to

bring their claims in Kentucky pursuant to the LPA’s mandatory forum selection

clause. Alternatively, if the Court determines that the LPA does not mandate

dismissal, Defendants argue that the Court should still dismiss because “Plaintiffs

22
     Compl. ¶¶ 87–88.
23
     Compl. ¶ 95.
24
     Kentucky Compl. ¶ 3.
25
     Id. at Count I.
26
   D.I. 26, 28. On April 13, Defendants also filed a motion to stay discovery. D.I. 28.
I denied that motion at oral argument on May 17, 2018. May 17 Tr., 76:2–77:12.

                                          7
seek to have the rights and obligations of the sovereign Commonwealth of

Kentucky adjudicated in another state, even though the Kentucky legislature has

unambiguously stated that the Commonwealth shall only be sued by a contractual

counter-party in Franklin County, Kentucky.”27 Finally, Defendants contend that

the doctrine of forum non conveniens mandates dismissal in favor of the Kentucky

Action.

         Plaintiffs counter that LPA § 12.8—the forum selection and choice of law

provision—is not a mandatory venue provision but rather provides “that if one

partner sues another partner in Franklin County, the defendant cannot move to

dismiss for lack of jurisdiction or improper venue.”28 Moreover, Plaintiffs read

6 Del. C. § 17-109(d) as rendering the forum selection clause (if mandatory)

unenforceable because Section 17-109(d) prohibits limited partners from waiving

the right to litigate “matters relating to the organization or internal affairs of a

limited partnership” in the courts of Delaware.29 According to Plaintiffs, since

KRS, a limited partner, did precisely that through LPA § 12.8, the provision

violates Section 17-109(d) and is, therefore, unenforceable.

         With regard to comity, Plaintiffs argue that Delaware has a strong interest

in resolving disputes regarding the de jure management of a Delaware limited

partnership and this interest must trump any notions of comity that may be

27
     Defs.’ Opening Br. 17.
28
     Pls.’ Answering Br. in Opp’n to Defs.’ Mot. to Dismiss (“Pls.’ Answering Br.”) 17.
29
     Id. at 24 (quoting 6 Del. C. § 17-109(d)).

                                              8
implicated here. As for sovereign immunity, Plaintiffs argue that the doctrine

does not justify dismissal because (1) Delaware can exercise jurisdiction over

Kentucky under federal and state law notwithstanding sovereign immunity;

(2) the Section 17-110 claim is in rem and does not implicate sovereign immunity;

and (3) Kentucky statutory law does not give KRS immunity from Delaware

actions.

      Finally, Plaintiffs contend Defendants have failed to show any

“overwhelming hardship” that would justify dismissal on forum non conveniens

grounds.    According to Plaintiffs, their claims relate to the governance of

Delaware entities so it would be peculiar, to say the least, for a Delaware court to

dismiss the claims based on a finding that Delaware is not a convenient forum in

which to adjudicate them.

                                II. ANALYSIS

      “The proper procedural rubric for addressing a motion to dismiss based on

a forum selection clause is found under Rule 12(b)(3), improper venue. Although

Delaware courts have, in the past, framed a forum selection clause analysis as

jurisdictional in some sense, recent cases have all proceeded under

Rule 12(b)(3).”30 When addressing a motion under Rule 12(b)(3), “the court is

not shackled to the plaintiff’s complaint and is permitted to consider extrinsic

30
  Bonanno v. VTB Hldgs., Inc., 2016 WL 614412, at *5 (Del. Ch. Feb. 8, 2016) (internal
quotation omitted).

                                          9
evidence from the outset.”31 In cases involving a contractual agreement to litigate

in a particular forum, “the well-settled rule is that the court should give effect to

the terms of private agreements to resolve disputes in [that] forum out of respect

for the parties’ contractual designation.”32

      A. The Forum Selection Clause

           “The courts of Delaware defer to forum selection clauses and grant

Rule 12(b)(3) motions to dismiss where the parties use express language clearly

indicating that the forum selection clause excludes all other courts before which

those parties could otherwise properly bring an action.” 33 “When a contract

contains a forum selection clause, this court will interpret the forum selection

clause in accordance with the law chosen to govern the contract.”34

              1. No Choice of Law Analysis is Necessary

           LPA § 12.8 provides, “[e]xcept as otherwise provided by the [DRULPA],

this Agreement and the rights and obligations of the parties hereunder shall be

governed by and interpreted, construed and enforced in accordance with the laws

of the Commonwealth of Kentucky (regardless of the choice of law principles of

the Commonwealth of Kentucky or of any other jurisdiction).” The parties agree

31
     Troy Corp., 2007 WL 949441, at *2 (internal quotation omitted).
32
     Id.
33
  Scanbuy, Inc. v. NeoMedia Techs., Inc., 2014 WL 5500245, at *2 (Del. Ch. Oct. 31,
2014) (internal quotation omitted).
34
     Ashall Homes Ltd. v. ROK Entm’t Gp. Inc., 992 A.2d 1239, 1245 (Del. Ch. 2010).

                                           10
that Kentucky law applies to the LPA35 and “Delaware courts will generally honor

a contractually-designated choice of law provision so long as the jurisdiction

selected bears some material relationship to the transaction.”36 Here, there is little

doubt that the Commonwealth of Kentucky has a “material relationship” to the

Funds and their internal governance; the limited partner in each of the Funds is a

“statutorily created entity that manages and administers the retirement systems of

the Commonwealth of Kentucky.”37

         The fact that Kentucky has a material relationship to the dispute, however,

does not end the choice of law inquiry. In cases where there is a “false conflict”—

meaning there is no material difference between the laws of competing

jurisdictions—the court “should avoid the choice of law analysis altogether.”38

Such is the case here. As relates to the enforcement of forum selection clauses,

Delaware and Kentucky law are in harmony. In both states, “forum selection

clauses are prima facie valid” and will be enforced unless unreasonable.39 Both

jurisdictions define a valid waiver—such as the waiver of the right to bring an

35
     May 17 Tr., 41:23–42:7.
36
  J.S. Alberici Const. Co., Inc. v. Mid-W. Conveyor Co., Inc., 750 A.2d 518, 520
(Del. 2000).
37
  Compl. ¶ 27. Cf. Douzinas v. Am. Bureau of Shipping, Inc., 888 A.2d 1146, 1148
(Del. Ch. 2006) (“Our state respects choice of law provisions when the law chosen has
a material relationship to the matter at issue, a requirement that is satisfied here because
Nautical Systems operated out of Texas.”).
38
     Deuley v. DynCorp Int’l, Inc., 8 A.3d 1156, 1161 (Del. 2010).
39
  See Ky. Farm Bureau Mut. Ins. Cos. v. Henshaw, 95 S.W.3d 866, 867 (Ky. 2003);
Aveta, Inc. v. Colon, 942 A.2d 603, 608 n.7 (Del. Ch. 2008).

                                            11
action outside a particular forum—as “an intentional relinquishment or

abandonment of a known right or privilege.”40 And, in both jurisdictions, forum

selection clauses, like other contractual provisions, are interpreted consistent with

the principle that “[w]here the [contractual language] is clear and unambiguous,

courts [should] interpret the contract in accordance with the ordinary and usual

meaning of the language.” 41 Thus, there is no meaningful conflict of laws.

Accordingly, the Court declines to undertake a choice of law analysis.

          2. The Forum Selection Clause Is Permissive

      Forum      selection    clauses    may     be    permissive     or    mandatory.

“Permissive forum selection clauses, often described as ‘consent to jurisdiction’

clauses, authorize jurisdiction and venue in a designated forum, but do not

prohibit litigation elsewhere.” 42       In contrast, “[m]andatory forum selection

40
   Mazik v. Decision Making, Inc., 449 A.2d 202, 204 (Del. 1982) (“In the civil
realm, . . . a valid waiver must be voluntary, knowing and intelligently made, or ‘an
intentional relinquishment or abandonment of a known right or privilege.’” (internal
citation omitted)); Conseco Fin. Servicing Corp. v. Wilder, 47 S.W.3d 335, 344 (Ky. Ct.
App. 2001) (“Waiver is commonly defined as a voluntary and intentional surrender or
relinquishment of a known right . . . .” (internal quotation omitted)).
41
   Grosvenor Orlando Assocs. v. HCP Grosvenor Orlando LLC, 2013 WL 3215704,
at *2 (Del. Ch. June 26, 2013); see also Frear v. P.T.A. Indus., Inc., 103 S.W.3d 99, 106
(Ky. 2003) (“[I]n the absence of ambiguity a written instrument will be enforced strictly
according to its terms, and a court will interpret the contract’s terms by assigning
language its ordinary meaning and without resort to extrinsic evidence.”).
42
  14D Charles Allan Wright, Arthur R. Miller, & Edward H. Cooper, Federal Practice
and Procedure § 3803.1 (4th ed.) (2018 Westlaw Update) (hereinafter “Wright &
Miller”); see also In re Oakwood Homes Corp., 342 B.R. 59, 65 (Bankr. D. Del. 2006)
(“Forum selection clauses are classified as either mandatory or permissive.
A mandatory forum selection clause grants exclusive jurisdiction to a particular forum.
A permissive forum selection clause, on the other hand, is nonexclusive.”).

                                           12
clauses contain clear language indicating that litigation will proceed exclusively

in the designated forum.”43

       Here, LPA § 12.8 states, in relevant part:

       Each of the Partners hereby consents to the jurisdiction of the courts
       of the Commonwealth of Kentucky and further consents that venue
       shall lie in the Franklin Circuit Court located in Franklin County,
       Kentucky.

The plain meaning of this provision is that the parties to the LPA “consent” to the

jurisdiction of Kentucky courts and to Franklin County Circuit Court as a venue.

The provision, however, does not state (or otherwise imply) that Franklin County

Circuit Court is the exclusive forum for the resolution of partnership-related

disputes. Indeed, this construction of the provision’s limited reach is supported

by a comparison of LPA § 12.8 with the operative language of the contractual

43
   Wright & Miller, supra; see also In re LMI Legacy Hldgs., Inc., 553 B.R. 235, 247
(Bankr. D. Del. 2016) (finding a forum selection clause mandatory where it provided
“[e]ach party agrees that any action, claim, suit, or proceeding (each a ‘Proceeding ‘)
concerning the interpretations, enforcement and defense of the transactions
contemplated by this Engagement Letter (whether brought against a party hereto or its
respective affiliates, employees or agents) will be exclusively commenced in the state
and federal courts sitting in the City of New York, Borough of Manhattan (the ‘New
York Courts’). Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in
connection herewith . . . .”); Ashall Homes, 992 A.2d at 1250 (explaining “a provision
stating that a court shall have jurisdiction over any dispute [is] a mandatory, rather than
permissive, grant of jurisdiction” (citing Prestancia Mgmt. Gp., Inc. v. Va. Heritage
Found., II LLC, 2005 WL 1364616, at *7 (Del. Ch. May 27, 2005)); Griffin v. Baker &
Taylor, Inc., 2013 WL 610957, at *7 (W.D. Ky. Feb. 19, 2013) (finding clause at most
permissive forum selection clause when it provided “[t]his Guaranty shall be governed
by the law of the State of North Carolina, without giving effect to the conflict of laws
provision thereof. Guarantor hereby consents to the jurisdiction of the State and Federal
courts located in Charlotte, North Carolina”).

                                            13
provisions at issue in the very cases Defendants cite in support of their argument

that Section 12.8 is mandatory.44 For example:

                     In Excell, Inc. v. Sterling Boiler & Mechanical, Inc.,45
         the United States Circuit Court of Appeals for the Tenth Circuit
         found that the following provision was mandatory: “In the event that
         any dispute shall arise with regard to any provision or provisions of
         this Agreement, this Agreement shall be subject to, and shall be
         interpreted in accordance with, the laws of the State of Colorado.
         Jurisdiction shall be in the State of Colorado, and venue shall lie in
         the County of El Paso, Colorado.”46

                     In Docksider, Ltd. v. Sea Technology, Ltd.,47 the United
         States Circuit Court of Appeals for the Ninth Circuit similarly found
         mandatory a provision stating: “Venue of any action brought
         hereunder shall be deemed to be in . . . Virginia.”48

                    In Double A Home Care, Inc. v. Epsilon Systems, Inc.,49
         the United States District Court for the District of Kansas interpreted
         as mandatory a clause stating: “Should an action be commenced by
         either Vendor or Agency with respect to this Agreement, then both
         the Vendor and Agency agree that said action shall be venued in the
         County of Ramsey, State of Minnesota.”50

         LPA § 12.8 does not provide that “any” or “all” actions brought by the

parties “shall” be brought in Kentucky. Instead, it provides that “[e]ach of the

Partners [] consents to the jurisdiction of the courts of the Commonwealth of

44
     Defs.’ Opening Br. 14–15.
45
     106 F.3d 318, 321 (10th Cir. 1997).
46
     Id. (emphasis supplied).
47
     875 F.2d 762, 763–64 (9th Cir. 1989).
48
     Id. (emphasis supplied).
49
     15 F.Supp.2d 1114, 1115–16 (D. Kan. 1998).
50
     Id. (emphasis supplied).

                                             14
Kentucky and further consents that venue shall lie in the Franklin Circuit Court

located in Franklin County, Kentucky.”           With the inclusion of the consent

language and the lack of language indicating that Kentucky is the exclusive

forum—such as by the use of the term “any”—Section 12.8 does not contain clear

language indicating that jurisdiction and venue must lie exclusively in

Kentucky.51 Accordingly, Defendants’ motion to dismiss this action as a means

to specifically enforce the LPA’s forum selection clause is DENIED.

     B. This Action is Stayed
       While Defendants chose not to request a stay as an alternative to dismissal,

I am, nevertheless, satisfied that a stay of this action pending the resolution of the

claims brought in Kentucky is appropriate.52 A court may, “in the interests of

comity and judicial efficiency, stay an action before it in favor of another with an

identity of parties and issues pending in another forum.” 53 In cases where the

 Cf. Prestancia, 2005 WL 1364616, at *7 (“The forum selection clause in the Security
51

Agreement is mandatory, as it expressly requires any dispute under the Security
Agreement to be litigated in Loudoun County, Virginia.”).
52
  Defendants seem to have abandoned their forum non conveniens argument in support
of dismissal, choosing not to address the issue at all in their reply brief or at oral
argument on their motion to dismiss. Cf. May 17 Tr., 40:1–6 (Plaintiffs’ counsel
explaining it will not address forum non conveniens arguments because Defendants’
counsel did not address the issue).
53
   Scott v. Dondero, 2014 WL 4406996, at *2 (Del. Ch. Sept. 8, 2014) (quoting In re
Molycorp, Inc. S’holder Deriv. Litig., 2014 WL 1891384, at *4 (Del. Ch. May 12,
2014)); see id. (“I sua sponte stayed litigation in this matter, pending the Texas court’s
resolution of the matters pending before it which will necessarily bear on issues here.”);
see also Kingsland Hldgs. Inc. v. Fulvio Bracco, 1996 WL 422340, at *2 (Del. Ch.
July 22, 1996) (“[G]arnishees correctly point out that this Court may stay actions
sua sponte.” (citing Council of S. Bethany v. Sandpiper Dev. Corp., 1981 WL 96484,
at *2 (Del. Ch. Oct 21, 1981)).

                                           15
Delaware action is filed first or simultaneously with the action in the other forum,

the court, in determining whether to stay the Delaware action, will consider “the

same factors determinative of a motion to dismiss for forum non conveniens.”54

      [W]here two lawsuits are simultaneously filed-one in a Delaware
      state court and the other in a different forum-the Delaware court
      should decide a motion to stay the Delaware action as a discretionary
      matter, without giving deference to either party’s choice of forum.
      In balancing all of the relevant factors, the focus of the analysis
      should be which forum would be the more easy, expeditious, and
      inexpensive in which to litigate. That approach, which imposes no
      special or heightened burden of persuasion, leads straightforwardly
      to the following burden of persuasion: towards which of the two
      competing fora do the forum non conveniens factors preponderate?55
      In order to determine whether an action that was filed first but in close

temporal proximity to another action should be given first-filed deference or

instead be treated as simultaneously filed, “the Court takes into account the

circumstances surrounding the filing of the actions.”56 “Ultimately, the exercise

of the court’s discretion will depend upon review of the relevant practical

54
  Adirondack GP, Inc. v. Am. Power Corp., 1996 WL 684376, at *6 (Del. Ch. Nov. 13,
1996).
55
  HFTP Invs., L.L.C. v. ARIAD Pharm., Inc., 752 A.2d 115, 122 (Del. Ch. 1999);
see also In re IBP, Inc., 2001 WL 406292, at *8 (Del. Ch. Apr. 18, 2001) (“Since the
actions must be considered simultaneously filed, neither action commands the high
ground which would otherwise force the court to approach the analysis in a manner
which defers to a plaintiff’s choice of forum.” (quoting Azurix Corp. v. Synagro Techs.,
Inc., 2000 WL 193117, at *4 (Del. Ch. Feb. 3, 2000)); Rapoport v. Litig. Trust of MDIP
Inc., 2005 WL 3277911, at *4 (Del. Ch. Nov. 23, 2005) (considering which forum of
simultaneously filed actions the forum non conveniens factors preponderate towards);
Nat’l Union Fire Ins. Co. v. Turner Constr. Co., 2014 WL 703808, at *6 (Del. Super.
Ct. Feb. 13, 2014) (same).
56
  Lima Delta Co. v. Global Aerospace, Inc., 2016 WL 691985, at *4 (Del. Super. Ct.
Feb. 19, 2016) (internal quotation omitted).

                                          16
considerations keeping in mind the broader policies of comity between the states

and their courts and the orderly and efficient administration of justice.”57

         Plaintiffs filed this Delaware action eight days prior to the filing of

Defendants’ Kentucky Action. 58 Defendants have suggested, however, that

Plaintiffs filed this Delaware action seeking declaratory relief in anticipation of,

and as a means to scuttle or confound, Defendants’ Kentucky Action. Given the

timing and content of the notices Defendants delivered to the Fund GPs, in which

they clearly expressed their displeasure with the Fund GPs’ performance and their

view that a wide-reaching breach of the LPA had occurred, the timing of, and

motives for, the Delaware filing are, at best for Plaintiffs, suspicious.59 Under

such circumstances, it is appropriate to deem the actions simultaneously filed and,

accordingly, to give less deference to Plaintiffs’ choice of forum. 60 It is also

57
     Adirondack, 1996 WL 684376, at *6.
58
   Under the circumstances presented here, as explained below, the temporal separation
of eight days does not undermine a finding of contemporaneous filings. See, e.g., Nat’l
Union Fire Ins., 2014 WL 703808, at *4 (finding contemporaneous filing where
competing actions were filed nine days apart); In re Chambers Dev. Co. Inc. S’holders
Litig., 1993 WL 279335, at *7 (Del. Ch. May 20, 1993) (considering competing actions
filed two weeks apart to be contemporaneously filed).
59
  Defendants served the removal notice on the Fund GPs on February 8, 2018; under
LPA § 7.4, the Fund GPs had sixty days “from receipt of [the] notice to remedy or
otherwise cure [the] Cause for removal”; this Delaware action was filed April 2, 2018;
the sixty-day cure period expired on April 8, 2018; and the Kentucky Action was filed
April 10, 2018. Compl. ¶ 14; see Kentucky Compl. 1.
60
  Nat’l Union Fire Ins., 2014 WL 703808, at *3 (“The Court may consider if the suit
was filed in anticipation of litigation when determining if deference is applicable. The
anticipatory use of a declaratory judgment action ‘for the purpose of gaining an
affirmative judgment in a favorable forum requires a closer look at the deference
historically accorded a prior filed action.’” (quoting Playtex, Inc. v. Columbia Cas. Co.,
1989 WL 40913, at *4 (Del. Super. Ct. Apr. 25, 1989)); Williams Gas Supply Co. v.
                                           17
appropriate to dispense with the “special or heightened burden of persuasion” that

would typically be implicated by the forum non conveniens analysis and instead

consider “towards which of the two competing fora [] the forum non conveniens

factors preponderate.”61

         In this instance, I am satisfied that the Cryo-Maid factors related to the

convenience of litigation—access to proof, compulsory process, view of

premises—do not favor either Delaware or Kentucky. 62 Both are equally

convenient or inconvenient, depending upon one’s perspective. The balance of

the Cryo-Maid factors, however, point decisively to Kentucky. The Kentucky

and Delaware Actions overlap substantially.            The parties are functionally

identical63 and both actions will require the courts to adjudicate the same contract

Apache Corp., 1991 WL 18091, at *2 (Del. Super. Ct. Feb. 12, 1991) (“Delaware courts
have recognized that the use of a declaratory judgment action to anticipate and soften
the impact of an imminent suit elsewhere for the purpose of gaining an affirmative
judgment in a favorable forum requires a closer look at the deference historically
accorded a prior filed action.” (citing Playtex, 1989 WL 40913, at *4; Air Prod. &
Chem., Inc. v. Lummus Co., 252 A.2d 545, 547–48 (Del. Ch. 1968), rev’d on other
grounds, 252 A.2d 543 (Del. 1969)).
61
  HFTP, 752 A.2d at 122. As is well-known, those factors are “(1) the relative ease of
access to proof, (2) the availability of compulsory process for witnesses, (3) the
possibility of a view of the premises, (4) whether the controversy is dependent upon the
application of Delaware law which the courts of this State more properly should decide
than those of another jurisdiction, (5) the pendency or nonpendency of a similar action
or actions in another jurisdiction, and (6) all other practical problems that would make
the trial of the case easy, expeditious, and inexpensive.” Id. at 122–23; see also Gen.
Foods Corp. v. Cryo-Maid, Inc., 198 A.2d 681, 684 (Del. 1964).
62
     Cryo-Maid, 198 A.2d at 684.
63
  KRS initiated the Kentucky proceedings as sole Plaintiff against the Fund GPs, Bay
Hills and Lance Mansbridge. See Kentucky Compl. ¶¶ 4–11.

                                          18
dispute—namely, whether Defendants had “Cause” under the LPA to remove the

Fund GPs as general partners of the Funds. The simultaneous procession of both

actions risks the significant waste of scarce judicial resources and, more

importantly, the inconsistent resolution of relevant issues.

         Moreover, the parties agree that Kentucky law will govern the

interpretation of the LPA. The construction and application of the LPA will

dictate whether vel non the Fund GPs behaved properly and whether vel non they

were properly removed. It is appropriate that a Kentucky court take the lead in

interpreting Kentucky law.

         I reject Plaintiffs’ argument that deferring litigation of this dispute to a

forum outside of Delaware would somehow violate positive law or Delaware’s

public policy. Section 17-109(d) of the DRULPA prohibits a limited partner from

waiving (in a written agreement) its right to maintain an action “relating to the

organization or internal affairs of a limited partnership” in Delaware. 64 The

64
     6 Del. C. § 17-109(d)

         In a written partnership agreement or other writing, a partner may consent
         to be subject to the nonexclusive jurisdiction of the courts of, or arbitration
         in, a specified jurisdiction, or the exclusive jurisdiction of the courts of the
         State of Delaware, or the exclusivity of arbitration in a specified
         jurisdiction or the State of Delaware, and to be served with legal process
         in the manner prescribed in such partnership agreement or other writing.
         Except by agreeing to arbitrate any arbitrable matter in a specified
         jurisdiction or in the State of Delaware, a limited partner may not
         waive its right to maintain a legal action or proceeding in the courts
         of the State of Delaware with respect to matters relating to the
         organization or internal affairs of a limited partnership.

(emphasis supplied).

                                               19
provision does not, however, mandate litigation of internal governance disputes

in Delaware courts.65 Had the General Assembly intended to so mandate, it could

have done so when it amended Section 17-109(d) in 2000 to add the provision at

issue.

         The general partners (managers) and limited partnerships brought this

action in Delaware; the limited partner, KRS, chose instead to initiate litigation in

the courts of Kentucky. Staying this action would not require KRS to waive its

right to maintain an action in Delaware regarding the limited partnership’s

internal disputes. As a non-manager, it was free to initiate litigation outside of

Delaware as it saw fit.

65
   Martin I. Lubaroff & Paul M. Altman, Lubaroff & Altman on Delaware Limited
Partnerships § 2.3 at 2-11 (2011 Supplement) (Section 17-109(d) “gives the general
partner the flexibility to be able to agree that it will only bring an action against a
particular limited partner in the limited partner’s home jurisdiction, which many limited
partners require, and also protects the limited partners’ ability to bring actions in the
State of Delaware.”). This court has interpreted the provision similarly on several
occasions although generally in the context of addressing 6 Del. C. § 18-109(d)—the
LLC Act’s analogue to Section 17-109(d). See, e.g., Baker v. Impact Hldgs., Inc., 2010
WL 1931032, at *3 n.9 (Del. Ch. May 13, 2010) (“Section 18-109(d) only limits the
behavior of members of an LLC who are not managers. Analogizing from the LLC
context to the corporate context, the managers of an LLC would be akin to a
corporation’s directors and officers, while the nonmanager members of an LLC would
be similar to a corporation’s stockholders. . . . [T]he restriction in that provision
preventing nonmanager members from waiving Delaware jurisdiction over suits
involving the internal affairs of a Delaware business entity would not apply to someone
in Baker’s position.”); City of Providence v. First Citizens BancShares, Inc., 99 A.3d
229, 239–40 (Del. Ch. 2014) (“[I]n 2000, the General Assembly explicitly amended
§ 18-109(d) of the Limited Liability Company Act to prevent a Delaware LLC from
mandating a foreign court as the exclusive forum for intra-entity disputes asserted by its
non-manager members . . . .” (emphasis supplied)); Kahuku Hldgs., LLC v. MNA
Kahuku, LLC, 2014 WL 4699618, at *5 n.29 (Del. Ch. Sept. 15, 2014) (“The prohibition
in [Section 18-109(d)] is not at issue here, as it only applies to protect a non-manager’s
right to maintain a legal action or proceeding in the courts of Delaware, and [Plaintiff]
is admittedly a manager of this LLC.” (emphasis in original)).

                                           20
      The claims presented here do not implicate unique issues of Delaware law.

Instead, they require a straightforward application of the LPA’s contractual

provisions as interpreted under the parties’ bargained-for choice of Kentucky law.

There is no legitimate point or purpose to be served by having this Court and the

Kentucky court adjudicating these same issues at the same time. Accordingly, I

find the forum non conveniens factors “preponderate” towards litigating this

dispute in Kentucky and, thus, defer to Kentucky in the interests of the orderly

and efficient administration of justice.

                               III. CONCLUSION

      For the foregoing reasons, Defendants’ motion to dismiss is DENIED.

This action is stayed immediately pending resolution of the Kentucky Action.

Either party may apply to lift the stay should good cause warrant such an

application.

      IT SO ORDERED.

                                           21