RPRS Gaming, L.P. v. HP Gaming Partners L.P. and High Penn Gaming, L.P., C.A. No. 6359-VCP, (Del. Ch. June 13, 2012).

Issue Presented: Whether supermajoirty approval of the Management Committee is required for a proposed  casino expansion.

Short Answer: The motion for partial summary judgment was denied because of a genuine issue of material fact.


One interesting factual aspect of this case is that it was a dispute involving the investors of a casino located in nearby Pennsylvania. The case involved a proposed expansion plan of the SugarHouse Casino in Philadelphia. The parties disagreed on the correct measure of the “Budgeted Development Costs” under their limited partnership agreement (LPA). The parties formed a Partnership to bid for a license to build, develop, and operate a casino in Philadelphia, signing a Consent and Acknowledgement Agreement in 2005. In 2008, the project needed to be downsized from the “2006 Proposal,” so a “2009 Proposal” was created and proposed it being built in two stages. Instead of continuing with stage two at the appropriate time, the defendants presented a “Proposed Expansion” which would cost an additional $141.8 million. The plaintiffs objected to the proposed expansion and sought a declaration that the Proposed Expansion would require a supermajority approval from the management committee. Defendants brought a motion for partial summary judgment. 


Genuine Issues of Fact Regarding the Correct Measure of Budgeted Development Costs:

Under Section 9.3.2 of the LPA a “supermajority” approval is required for certain “Major Decisions,” which includes any expansion greater than $1 million. There is a dispute as to whether the Budgeted Development Cost is $742 million or $474 million.

Genuine Issues of Fact Regarding Defendants’ Remaining Bases for Summary Judgment:

The remaining arguments regarding the scope of the licensed facility, the affirmative defense of equitable estoppel, and the unreasonable withholding of approval, by the defendants all involve questions of fact and not a question of law, and therefore, could not be resolved by the Court at this early stage.