Delaware Addresses Jurisdiction Over Non-Partner Manager of a Partnership

Delaware Addresses Jurisdiction Over Non-Partner Manager of a Partnership

      In New Media Holding Co., LLC v. Brown, C.A. No. 7516-CS (Del. Ch. Nov. 14, 2012), the court considered whether it would have jurisdiction over the manager of a limited liability partnership where (i) that manager was accused of breach of his fiduciary duties to the partnership but where (ii) the manager’s actions were not done in Delaware.  On those facts, the court determined it could not exercise jurisdiction over that manager. 

     The partnership in question, a Delaware limited liability partnership, had initially been formed as a Delaware LLC; subsequently it converted into the LLP form.  After the conversion into the LLP, the plaintiff purchased 50% of that venture.  Thereafter, it was alleged that the manager improperly diluted the plaintiff from 50% to 1%.  The manager was based outside the U.S.

       The court noted that, while other organizational forms provide that the Delaware courts would have jurisdiction, there is no Delaware law providing statutory jurisdiction over the manager of an LLP.  See, e.g., Del. Code Ann. tit. 10, § 3104(c)(1).  As the manager had not acted in Delaware, general long-arm jurisdiction likewise failed.