Relying on Delaware Supreme Court precedent that supports the exercise by the Chancery Court of wide discretion in fashioning equitable remedies as it deems appropriate in the circumstances presented, a general partner that owned 90% of a 3-member limited partnership was removed as a general partner due to the egregious breaches of the general partner’s duty of loyalty. McGovern v. General Holdings, Inc., download file.
The remaining minority owners argued for the substitution of a “professional manager” to run the company, whose greatest asset was valuable patents and intellectual property. However the court found that sale of the company was more appropriate because the parties would never be able to “get along” and it was not practical to force a 90% owner to be an eternal outsider. Moreover due to his breaches of duty, the court allowed that the company needed to pay the attorneys’ fees for the 2 minority members, but the 90% owner was required to repay the company for all the attorneys’ fees that he caused the company to pay himself in the case.
There are many more salient details in the 56-page decision of the court that cannot be summarized in this short space. But download it and read the whole thing. It’s better than any novel I have read recently.