Recourse for LP investors when an investment goes wrong
When investors into a Limited Partnership Fund fall out with the Fund's Manager it can be difficult for the investors to obtain direct recourse from the Manager because of hurdles inherent in the Limited Partnership structure. These difficulties were highlighted in the 2012 Henderson case, when the court ruled Limited Partners could not bring a case directly against a Fund's Manager without losing the benefits of their Limited Partnership status. This note discusses potential solutions to these difficulties, based on a Fund dispute we have recently resolved for our client. It also highlights issues for Managers and General Partners who find themselves in this situation.