Dismissal of a New York state court action for breach of fiduciary duty against Silverpeak Real Estate Partners LP


Paul, Weiss successfully advised Silverpeak Real Estate Partners LP on the dispute

Paul, Weiss secured an affirmance of the dismissal of a New York state court action for breach of fiduciary duty against Silverpeak Real Estate Partners LP, which had been filed by investors who purchased Lehman real estate assets that later lost value.

The New York Appellate Division, First Department, unanimously affirmed the dismissal of an action filed by several limited partners in a partnership originally created by Lehman in 2007 to invest in commercial real estate. In the wake of the Lehman bankruptcy, Silverpeak, whose principals were all former Lehman executives who had formed and run the original investment partnership, was approved through a consent solicitation to become the new general partner of the partnership under a new investment management contract.

The investors’ sprawling complaint alleged 16 causes of action, including that the original investments in 2007 had been procured by fraud, that the consent solicitation was itself both fraudulent and technically defective, that those limited partners who had defaulted on their investment obligations were being unfairly treated and that the new management fees approved by a majority of limited partners were unconscionable and void. In a comprehensive opinion upheld by the Appellate Division, the trial court considered and rejected all 16 causes of action.

The Paul, Weiss team included litigation partner Richard Rosen (Picture), who argued the appeal, and counsel Robert Kravitz.

Involved fees earner: Richard Rosen – Paul Weiss Rifkind Wharton & Garrison; Robert Kravitz – Paul Weiss Rifkind Wharton & Garrison;

Law Firms: Paul Weiss Rifkind Wharton & Garrison;

Clients: Silverpeak Real Estate Partners LP;

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Author: Ambrogio Visconti