Amanda Kahn and Kimberly Kahn (plaintiffs) owned limited-partnership interests in American Real Estate Partners, L.P. (AREP), a Delaware partnership that acquired and managed real estate. The Kahns brought a derivative action on behalf of AREP against AREP’s general partner, American Property Investors, Inc. (API); API’s sole shareholder and chief executive officer, Carl Icahn; Bayswater Realty and Capital Corporation (Bayswater), a corporation affiliated with Icahn; and API’s other directors (defendants). The Kahns alleged that Icahn had breached his fiduciary duties to AREP and usurped corporate opportunities by keeping profits for API, Bayswater, and other affiliates. The partnership agreement for AREP provided that API could compete directly or indirectly with AREP, and thereby modified the traditional default rules of partnerships. The defendants moved to dismiss the Kahns’ complaint, arguing that the language of the AREP partnership agreement precluded the action.