An Unincorporated Syndicate is Not Governed by Corporate Law

An Unincorporated Syndicate is Not Governed by Corporate Law

            In a recent decision, the Federal District Court for the Eastern District of Kentucky confirmed that an unincorporated syndicate is not, as a default matter, governed by the rules set forth in the Kentucky Business Corporation Act. KNC Investments, LLC v. Lane’s End Stallions, Inc., 2011 WL 5507395 (E.D. Ky. 2011).  In this instance, in a suit arising out of the interpretation of a stallion syndicate agreement, the plaintiff argued that the provisions of the Kentucky Business Corporation Act governing the inspection of corporate books and records should be referenced with respect to the interpretation of the books and records inspection right that existed under a syndicate agreement.  The court dismissed this argument, noting that:

No justification exists to extend Kentucky law that by its own terms is strictly limited to corporations to non-corporate entities such as the LDK Syndicate.  Id. at *4.