Journal of Business & Technology Law


CaseNew Media Holding Company LLC v. Brown
Court, StateCourt of Chancery, Delaware
Date of Decision, Type of Case11/14/2012, Personal Jurisdiction
Case NumberC.A. No. 7516-CS
CitationNew Media Holding Company LLC v. Brown, C.A. No. 7516-CS (Del. Ch. Nov. 14, 2012).
  
Facts Of CaseIn 2007, Vladimir Gusinski and Konstantin Kagalovsky agreed to create a new Ukrainian television network. Kagalovsky initially created a Delaware limited liability company to hold the network but later converted the LLC into a limited liability partnership. Kagalovsky sold a 50% stake in the partnership to Gusinski who held the 50% stake through New Media Holding Company LLC. The partnership was managed by Grant Brown of Capita Fiduciary Group. New Media alleged that Brown and Capita abused their management position to dilute New Media's stake in the television network. Brown and Capita moved to dismiss the action for lack of personal jurisdiction.
  
HoldingDelaware law provides no statutory basis for exercising jurisdiction over the manager of a Delaware limited liability partnership for breaches of fiduciary duty absent acts undertaken in Delaware in furtherance of the alleged wrongdoing.
  
Court ReasoningAlthough 6 Del. C. §18-109(a) provides for service of process on the managers of limited liability companies, there is no comparable Delaware statute for limited liability partnerships. However, the court noted that this hole in Delaware law was troubling, indicating that Delaware limited liability partnership law may be amended to provide for service of process on the managers of limited liability partnerships. In absence in any statutory grant of personal jurisdiction over the managers of limited liability partnerships, the court examined whether any acts allegedly taken by Brown and Capita as part of their dilutive scheme were carried out in Delaware. The court found no act in Delaware necessary to or done in connection with the alleged dilutive scheme. As a result, the court granted the defendants' motion to dismiss for lack of subject matter jurisdiction.

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