Groundbreaking High Court decision brings relief to LLPs
The decision in Flanagan v Liontrust Investment Partners LLP, in which Macfarlanes LLP and Serle Court Chambers acted for Liontrust, will be welcomed by LLPs across the City and beyond.
Had the Petitioner been successful in arguing that the LLP Agreement had been repudiated and the default rules in the LLP Regulations applied instead, he would have been entitled to a windfall. Rather than receiving an annual fixed profit share and having no share in the equity (as the LLP Agreement allowed for), he would have been entitled to an equal share of the equity.
* the Judge left open the possibility that the doctrine of repudiatory breach may apply to LLPs with only two members.
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