Justice Eileen Bransten
Plaintiffs, limited partners, moved to remove Stevens and Kinpit Realty from their position as general partners of Kinpit Associates (KA) and installing Kinpit Holding LLC, wholly owned and controlled by plaintiffs, as substitute general partner of KA. They alleged defendants breached the partnership agreement as well as their fiduciary duty owed to the limited partners, noting Stevens stopped paying the debt on the mortgage encumbering the partnership’s property, rendering it in default. The court noted the partnership agreement was silent regarding the powers of the limited partners to remove general partners from their position. Defendants argued removal was prohibited by the agreement, and general partners could not be removed without dissolving the partnership. The court disagreed, finding removal of the general partners did not necessitate dissolution of the partnership, nor did it find the agreement’s language prohibited it from exercising its broad powers in equity by removing defendants as general partners and substituting the limited partners via an LLC. It noted removal seemed necessary to preserve the sole asset of the partnership where it was alleged the partners breached a fiduciary duty to the other partners.
