Certain Limited Partners in Henderson PFI Secondary Fund II LLP v Henderson PFI Secondary Fund II LP & Ors

Certain Limited Partners in Henderson PFI Secondary Fund II LLP v Henderson PFI Secondary Fund II LP & Ors

Claimants may pursue derivative claims against the Manager only if they accept unlimited liability for partnership debts during the period of such participation; derivative claims against the General Partner are not permitted as individual limited partners have direct contractual claims. All construction issues regarding investment authority, restrictions, and borrowing are determined in favour of the defendants. Exculpation and indemnity clauses apply to relieve the Manager and General Partner from liability for losses arising in connection with services performed, except in cases of negligence or more culpable conduct.

Parties
Claimant: Certain Limited Partners in Henderson PFI Secondary Fund II LLP; Defendant: Henderson PFI Secondary Fund II LP; Defendant: Henderson Equity Partners Limited; Defendant: Henderson Equity Partners (GP) Limited
Jurisdiction
England and Wales
Judgment Date
16 November 2012
Procedural Posture
Commercial Dispute / Determination of Preliminary Issues
Outcome
Preliminary issues determined mostly in favour of defendants; claimants not entitled to declarations sought; derivative claim against Manager permitted only with forfeiture of limited liability; costs to be determined.
Legal Topics
Derivative Actions, Limited Partnership Liability, Investment Authority, Exculpation and Indemnity Clauses, Management of Partnership Assets
Partnership Law Contract Law Investment Law Derivative Actions Limited Partnership Liability Investment Authority Exculpation and Indemnity Clauses Management of Partnership Assets

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Parties

Certain Limited Partners in Henderson PFI Secondary Fund II LLP

Claimant

Henderson PFI Secondary Fund II LP

Defendant

Henderson Equity Partners Limited

Defendant

Henderson Equity Partners (GP) Limited

Defendant

Procedural Posture

Commercial Dispute / Determination of Preliminary Issues

Legal Issues

  1. 1 Whether claimants can pursue derivative claims against the General Partner and Manager
  2. 2 Effect of pursuing derivative claims on limited partners' liability
  3. 3 Construction of investment authority and restrictions under the Partnership Agreement and Management Deed

Ratio Decidendi

Claimants may pursue derivative claims against the Manager only if they accept unlimited liability for partnership debts during the period of such participation; derivative claims against the General Partner are not permitted as individual limited partners have direct contractual claims. All construction issues regarding investment authority, restrictions, and borrowing are determined in favour of the defendants. Exculpation and indemnity clauses apply to relieve the Manager and General Partner from liability for losses arising in connection with services performed, except in cases of negligence or more culpable conduct.

Court Disposition

Preliminary issues determined mostly in favour of defendants; claimants not entitled to declarations sought; derivative claim against Manager permitted only with forfeiture of limited liability; costs to be determined.

Orders

  • Claimants not entitled to pursue derivative claim against General Partner.
  • Claimants may pursue derivative claim against Manager only if they accept unlimited liability for partnership debts during period of claim.