Thursday, July 25, 2013
Amendment of Syndicate Agreement and Ratification of Prior Actions Resolved the Dispute
Amendment of Syndicate Agreement and Ratification
of Prior Actions Resolved the Dispute
In a pair of recent decisions, the U.S. District Court has dismissed the long-running dispute over the Lemon Drop Kid Syndicate. KNC Investments, LLC v. Lane’s End Stallions, Inc., 2013 WL 3213081 (E.D. Ky. June 24, 2013) & 2013 WL 2313083 (E.D. Ky. June 24, 2013).
KNC Investments, LLC was one of forty participants in the Lemon Drop Kid Syndicate. KNC brought suit seeking a declaration that was entitled to certain records of the syndicate including the names and contact information of the other participants and challenging the allocation of excess nominations. Cutting to the chase, after the suit was filed, Lane’s End Stallions solicited from the members of the syndicate both an amendment to the syndicate agreement confirming that the various participants in the syndicate are not entitled to the names and contact information of the other participants in the syndicate and ratifying the mechanism by which Lane’s End had allocated the additional nominations. Subsequent challenges to the mechanism by which the consents to the amendment and ratification were sought were rejected on the basis that Lane’s End had, by contract, the capacity to provide its recommendations and suggestions. Hence, there could be no breach of duty, including a fiduciary duty, in stating its recommendation that the proposed amendment and ratification be adopted by the members of the syndicate.
In that all of the plaintiffs’ claims were functionally barred by the actions of the syndicate’s members, there existed no further “case or controversy,” and on that basis the various suits were dismissed.