CYK partner Lydia Danon recently spoke at the Knect Funds Disputes and Partnership Law Forum, which brought together leading specialists in the private equity, hedge funds and asset management funds disputes arena.
Lydia addressed “Partner Issues: Privilege and Rights to Partnership Information,” an important subject given the expense and time lost dealing with arguments over the information/documents a partner is entitled to see when a dispute arises. A limited partner may need investment information to assess why the fund is loss-making or a rogue member could decide to cause mischief to try to negotiate better exit terms.
Lydia emphasised the importance of including restrictive clauses in the partnership agreement to limit partners’ access to information. Individual partners should also pay personally for legal advice to avoid disclosure to a departing partner.
Also discussed was the new Private Fund Limited Partnerships (“PFLP”) regime and the welcome news that limited partners do not need to render true accounts and full information of all things affecting the partnership to any other partner. They do not have a duty to compete with the PFLP and so they do not need to account for any profits, such obligations being inconsistent with the role of the modern day passive investor.
Lydia regularly advises LPs, LLPs and their members/partners in the financial and professional services sectors.