The standard to obtain a court-ordered dissolution of a Delaware limited partnership is set forth under the Delaware Revised Uniform Limited Partnership Act, 6 Del. C. Section 17-101, et seq. (the “DRULPA”).
Similarly to a limited liability company, under the DRULPA, a Delaware limited partnership will voluntarily dissolve upon the occurrence of certain events, including at a time specified in the partnership agreement, upon the happening of events specified in the partnership agreement, or the vote of at least two-thirds of limited partners (and the affirmative vote of all general partners), unless otherwise provided in the agreement. 6 Del. C. Section 17-801(a)(1)-(3).
However, a partner of a limited partnership can petition the Court to dissolve the company. The standard to obtain a court dissolution is governed by 6 Del. C. Section 17-802, which states as follows:
On application by or for a partner the Court of Chancery may decree dissolution of a limited partnership whenever it is not reasonably practicable to carry on the business in conformity with the partnership agreement.
This may be an advantageous course of action when the partners are deadlocked, or when the operations of the business cannot proceed given disagreements. Further posts will address case law addressing the standard imposed by the Court of Chancery in connection with obtaining such a court-ordered dissolution.
If you would like to speak to a litigator in Fox Rothschild’s Delaware office, please reach out to Sid Liebesman (302) 622-4237 or Seth Niederman (302) 622-4238.