Court of Chancery Accepts Fiduciary Status Through Partnership Interest-Assignment And Appraises Interest's Value
Ramunno v. Capano, et al
., C.A. No. 18798-NC, 2006 WL 375541 (Del. Ch. Feb. 10, 2006).
This is a fiduciary claim based action to appraise the fair value of real property brought by the trustee of four trusts that held a 12.1% interest in that property held by the defendant entity and its two majority interest holders, after that entity's merger into a new Delaware limited partnership.
Two brothers (Louis and Joseph) formed "Original Augustine" ("OA") as its limited partners. The general partner was Mardi Gras corporation controlled by Louis. OA then acquired the Wanamaker Building through a mortgage funding and capital contributions from its four partners. Rental income from it dwindled, requiring Mardi Gras to infuse loan-funds, without contributions from Settlor Thomas.
Subsequently, Thomas assigned his interests to the trustees. A second Augustine entity ("SA") was then formed to capture the real property with Mardi Gras as its general partner and Louis, Joseph and L III Holdings, LLC ("L III") as its limited partners. SA then merged into OA, without notification to plaintiff, to "freeze out" the trust's interests in the property and SA.
The defendants made an insubstantial $66,666 offer to the plaintiff-trustee for the trust's interests in the property. Plaintiff then brought a fiduciary claim as a limited partner claiming attachment of that duty by Thomas's earlier assignment and defendants' waiver. The court held for the plaintiff-trustee.
The court then awarded plaintiff $586,665, reduced by the $66,666 paid to him after the litigation commenced, with costs and interest.