Delaware High Court Affirms Order Compelling Defunct Hedge Fund Parkcentral Global to Divulge Its List of Limited Partners to Another Limited Partner in Order to Facilitate Future Litigation Against the Fund and Its Affiliates

On August 12, 2010, the Delaware Supreme Court unanimously affirmed a Chancery Court order compelling hedge fund Parkcentral Global, L.P., to disclose its list of names and addresses of its limited partners to Brown Investment Management, L.P., one of its limited partners.  Brown, which had lost its entire investment in Parkcentral when the fund collapsed, had sought the list in order to contact other limited partners with regard to potential litigation against the fund’s general partner, Parkcentral Capital Management, L.P. (the General Partner), and its auditors.  As previously reported in the Hedge Fund Law Report, the Chancery Court ruled in Brown’s favor.  See “Delaware Chancery Court Permits Limited Partner in Defunct Hedge Fund Parkcentral Global to Obtain a List of Names and Addresses of Other Limited Partners in the Fund,” Hedge Fund Law Report, Vol. 3, No. 23 (Jun. 11, 2010).  The Supreme Court agreed.  Reviewing a provision of the fund’s Limited Partnership Agreement, which mirrored Title 6, § 17-305 of the Delaware Revised Uniform Limited Partnership Act, it found that the limited partner had a contractual right of access to the shareholder list, which the General Partner could not unilaterally restrict, and that no federal law or regulation preempted Delaware law on this issue of disclosure.  We detail the background of the action and the Court’s legal analysis.

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