The Delaware Court of Chancery, in Jeff Lipman, et al. v. GPB Capital Holdings, LLC, et al. and GPB Holdings II, LP, et al., C.A. No. 2020-0054-SG, memo. op. (Del. Ch. Nov. 18, 2020), in a derivative action brought by limited partners on behalf of a limited partnership, found that it would have been futile to make demand on the partnership’s general partner, an LLC, because both the LLC and its individual controller faced a risk of liability for the claims asserted.
NEW: Morris James discusses the decision in Chancery Excuses Demand Where General Partner and its Controller Faced Substantial Likelihood of Liability.
$$$ Law360 discusses the decision in GPB Capital Mismanagement Suit Survives In Chancery.