Gotham Partners, L.P. v. Hallwood Realty Partners, L.P.
Supreme Court of Delaware
817 A.2d 160 (2002)
Hallwood Realty Partners (the Partnership) (defendant) is a limited partnership. Hallwood Realty Corporation (the General Partner) (defendant) is the only general partner and is a wholly owned subsidiary of Hallwood Group Incorporated (HGI) (defendant), a major holder of limited partnership units. The partnership agreement includes a provision that permits the General Partner or its affiliates to have business dealings with the Partnership, but requires these transactions to be on substantially equivalent terms as the Partnership could have obtained from an independent third party. In 1994, HGI owned around five percent of the partnership units then in circulation. Over the next year, the General Partner committed the Partnership to a complex series of transactions which resulted in HGI increasing its share of the partnership units to almost 30 percent, which effectively gave HGI control over the entire entity. The General Partner did not consider whether the terms were comparable to what a non-affiliated party would offer. Another holder of limited partnership units, Gotham Partners, L.P. (Gotham) (plaintiff), sued the Partnership, the General Partner, and two directors of the General Partner for breach of contractual fiduciary duties. The trial court found that the General Partner had breached its fiduciary duty and awarded damages to Gotham, but the court did not grant rescission of the contested transactions and did not factor in a control premium when calculating damages. Gotham appealed the court’s remedy.
Rule of Law
Holding and Reasoning (Veasey, C.J.)
What to do next…
Unlock this case brief with a free (no-commitment) trial membership of Quimbee.
You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 97,000 law students since 2011. Some law schools—such as Yale, Vanderbilt, Berkeley, and the University of Illinois—even subscribe directly to Quimbee for all their law students. Read our student testimonials.
Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.
Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students. Read more about Quimbee.
Here's why 169,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 13,800 briefs, keyed to 187 casebooks. Top-notch customer support.
- The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
- Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
- Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.