In Veera v. Janssen, 2005 WL 1606054 (S.D.N.Y. Jul. 5, 2005), plaintiffs', as managing directors of an investment company, engaged in investment management for their clients.
The clients entered into a Currency Management and Trading Authorization Agreement and an Investment Management Agreement with the investment company.
Neither plaintiff personally signed these agreements and instead signed as managers of the investment company. Id.
Each agreement contained a provision limiting the liability of the manager. The clients suffered substantial losses and sought arbitration with plaintiffs' under the theory of a direct benefit.
The court held that the benefit of the limited liability provision did not directly flow from the agreement because the "parties did not intend to bind plaintiffs personally, but rather intended to bind only the clients and the investment companies, as the agreements set forth."
Additionally, "even if the clause purporting to limit plaintiffs' liability could be considered a 'valuable asset'...there is no evidence that plaintiffs invoked the limited liability provision..." Id.