Kahn v. Icahn

1998 WL 832629 (1998)

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Nature of the Case

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Facts

Ps are holders of depository units representing limited partnership interests of AREP. AREP is a Delaware limited partnership, whose business is conducted through a subsidiary. AREP is in the business of acquiring and managing real estate and attendant activities. Ps brought derivatively on behalf of AREP against AREP's general partner American Property Investors, Inc. and the general partners' sole shareholder and chief executive officer, Carl C. Icahn. Ps claim the usurpation of partnership opportunities or opportunities that rightfully belonged to the Partnership. Ds argue that the complaint fails to state a claim in that section 6.11 of AREP's partnership agreement provides that the general partner, may 'compete, directly or indirectly with the business of the Partnership.' Arguing that a partnership is free to modify traditional default rules and duties of partners, Ds insist that Ps cannot properly claim a breach of fiduciary duty under the facts alleged in the complaint.