The Odd Lot Offer and Resale was pitched to the public and the American Stock Exchange as a resale to HGI of existing, listed Partnership units, not as an issuance of new, unlisted units. Consequently, the Partnership never filed a listing application with the American Stock Exchange for the units sold to HGI, and the Partnership's accounting books did not treat the Odd Lot Resale to HGI as an issuance of units.
The Partnership Agreement requires the written consent or affirmative vote by at least 66 and 1/3 percent of the limited partners to remove a general partner.
Gotham began purchasing Partnership units in 1994 and owned 14.8 percent of the outstanding units as of September 1996.
They were also officers of HGI at the time of the challenged transaction.
In 1994, the Partnership's units were trading at a low price because of the ongoing economic recession in real estate.
Guzzetti told the board that HGI was the only source of financing available and that the transactions would, among other things, raise the trading price of the Partnership's units, reduce the Partnership's administrative costs, and give odd lot holders the chance to sell at market price without incurring brokerage fees.
The Partnership's board approved the transactions, citing Guzzetti's reasons. HGI purchased 30,000 units, approximately 1.6 percent of the Partnership's equity, through the Reverse Split. The Option Plan resulted in officers and employees of the General Partner purchasing 86,000 units or 4.7 percent of the Partnership's equity. 15 (Del.2001) (urging prospective plaintiffs to use the “tools at hand,” such as books and records requests, to obtain information to support their claims and to avoid dismissal for failure to state a claim).61. Before VEASEY, Chief Justice, WALSH, HOLLAND, and BERGER, Justices, and HARTNETT, Justice (Retired),** constituting the Court en Banc. Mc Nally, of Morris, James, Hitchens & Williams LLP, Wilmington, DE; Philip H. With respect to remedies for that breach, the plaintiff limited partner had demanded rescission or an adequate damage award and sterilization of the voting rights attached to the partnership units involved in the challenged transaction. We agree with this holding and also agree with the trial court that the defendants are jointly and severally liable because the challenged transaction breached the entire fairness provisions of the partnership agreement. Ch.), at *3 (quoting Int'l Telecharge, 766 A.2d at 441 (quoting Thorpe v. We affirm the holding of the Vice Chancellor that he was not necessarily required to order rescission by the limited partnership contract or the application of equitable principles.