Litman v. Prudential-Bache Properties, Inc
In Litman v. Prudential-Bache Properties, Inc., 611 A.2d 12 (Del. Ch. 1992), the Chancery Court of Delaware faced the exact question that is before us today. Id. at 13.
The limited partners sued the general partners for mismanagement resulting in a reduced value of their limited partnership shares.
The Chancery Court dismissed the direct action because the limited partners' claim was derivative.
The Chancery Court held that a limited partner may only sue directly in two situations:
(1) where a plaintiff alleges a "separate and distinct" "peculiar and personal" injury to himself not suffered by the other shareholders, or;
(2) the injuries arise out of a special duty running from the alleged wrongdoer to the plaintiff, e.g., a right to vote. Litman, 611 A.2d at 15; Barger v. McCoy Hillard & Parks, 346 N.C. 650, 488 S.E.2d 215 (1997).