In the Matter of the Application of Lipper Holdings, LLC
On April 9, 2003, in a New York state court proceeding, In the Matter of the Application of Lipper Holdings, LLC, Supreme Court, New York County, Index No. 603653/2002, a notable interim order was rendered in which the state court approved the use of a methodology for distributing plan assets which historically revalued each investor’s capital account month by month. The petitioner had initiated the action seeking an order approving a proposed distribution of assets in connection with the winding up of certain limited partnerships. Justice Karla Moskowitz, of the Commercial Part of the Supreme Court which hears complex civil actions, ruled in favor of Kucker Marino Winiarsky & Bittens, LLP’s client and other investors. By Her Honor’s interim order, the Court approved the suggested asset distribution methodology because it was consistent with proper accounting principles and limited partnership plan documents. The Court rejected the arguments of certain investors who attempted to limit their own loss by forcing the entire revaluation of plan assets (a $400 million adjustment) to be applied in one month only, the final month in which winding up was initiated. Over petitioner’s objection, the court ruled that any negative balances in an investor’s capital accounts must be attributed to the general partner. Based on allegations that he had engaged in misconduct, the general partner was replaced as liquidating trustee.