Cases / Current Cases

GPB Partnerships Derivative Litigation


Wolf Popper LLP Defeats Motion to Dismiss in GPB Partnerships Derivative Litigation

In a Memorandum Opinion dated November 18, 2020, Vice Chancellor Sam Glasscock III of the Delaware Court of Chancery denied the motions filed by GPB Capital Holdings, LLC (“GPB”) and its affiliated individuals to dismiss the derivative suit brought on behalf of two clients of Wolf Popper LLP against them.

In the words of the Court, the complaint described how the defendants had “looted [GPB’s] constituent partnerships,” defrauded investors, failed to provide annual audited financial statements, hired as a chief compliance officer a person with inside knowledge of an SEC investigation into GPB, and engaged in other forms of wrongdoing.  The Court held that, based on these facts, the plaintiffs, limited partners of the constituent partnerships, had sufficiently met their burden in pleading that any demand on GPB to take corrective action would have been futile.  Accordingly, the plaintiffs were entitled to prosecute this action on the partnerships’ behalf, in place of GPB.  “I find none of [defendants’] arguments persuasive and conclude that it is reasonably conceivable that GPB has breached its fiduciary duties to the Partnerships,” the Vice Chancellor found.

Read more about Vice Chancellor Glasscock’s opinion here.

The case is Lipman, et al. v. GPB Capital Holdings, LLC, case number 2020-0054-SG in the Delaware Court of Chancery.

For more information, contact Chet B. Waldman, cwaldman@wolfpopper.com, or Adam Blander, ablander@wolfpopper.com.

Wolf Popper LLP Files Derivative Action on Behalf of GPB Partnerships

On January 28, 2020, Wolf Popper LLP, on behalf of two investors of GPB Holdings II, LP and GPB Automotive Portfolio, LP (the “Partnerships”), filed a derivative action against the Partnerships’ general partner, GPB Capital Holdings, LLC (“GPB”) and certain affiliated individuals.  As explained in the investors’ complaint, “this case concerns the mismanagement of one of the nation’s largest automobile dealership groups by scoundrels who never should have been allowed to run a legitimate company.”   Among other things, the investors allege that the defendants have engaged in rampant self-dealing using Partnership assets; disbanded GPB’s audit committee; refused to disclose the reason for GPB’s auditor’s resignation; failed to provide investors with the Partnerships’ annual audited financial statements; and, according to a federal indictment, hired as a chief compliance officer an individual with inside knowledge of an SEC probe into GPB’s misconduct.

The complaint is based in part on evidence obtained by Wolf Popper pursuant to an investigation commenced under 6 Del. C. § 17-305, a statute allowing limited partners access to certain internal partnership documents.

The case is Lipman, et al. v. GPB Capital Holdings, LLC, case number 2020-0054-SG in the Delaware Court of Chancery.


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