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Lach Brief

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Lach v. Man O’ War

Issue: Can a Limited Partnership be dissolved and converted into an LLC without the approval of all general managers?

Rule: A limited partnership can convert to a LLC when all the owners adopt a plan of conversion to which all partners consent.

A limited partnership dissolution is only allowed when all general partners and limited partners vote for dissolution, if the last general or limited partner dissociates and is not replaced within 90 days or if a court dissolves the limited partnership because it is not reasonably practicable to carry on the business of the limited partnership.

The Original Partnership agreement that the general partners agreed to would in this case not be sufficient enough to allow the limited partnership to dissolve.

Application: In this case the defendant did not comply with the requirements that would have allowed the conversion of the limited partnership to a LLC. Robert Miller and Lynwood Weisman, without the consent of Shirley Lach, converted the partnership to he Man O’ War Limited Liability Company.

As to the Limited Partnership dissolution because Lach, a general partner, did not vote for dissolution of the partnership it breached the general partners’ fiduciary duty.

As to defense, the general partners rights under the original partnership agreement to terminate the partnership at any time upon agreement of the general partners and to act upon behalf of the Partnership in matters that are necessary because this was not something necessary. The only reason the defendants wanted to convert into a LLC was so that Lach would not have to intervene in the approval of new general partners.

Conclusion: For these reasons, the Supreme Court of Kentucky reversed the judgment in favor of

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