New York State Court Rules That Exercising an Option to Redeem A Limited Partners’ Interests in a LIHTC Partnership Does Not Trigger a Liquidation Under the Partnership Agreement

On January 7, 2020, Judge Deborah A. Chimes of the New York Supreme Court—Erie County in Centerline/Fleet Housing Partnership, L.P. v. Hopkins Court Apartments, L.L.C., et al., No. 812426 (N.Y. Sup. Ct. 2016) ruled from the bench that a general partner’s election to redeem the limited partners’ interests in a LIHTC partnership did not trigger liquidation provisions under the partnership agreement because the partnership still owned all, or substantially all, of the assets of the partnership. Thus, in effect, exercise of the option by redeeming interests, rather than by acquiring title to the property, did not require repayment of the limited partners’ capital accounts. Read more of Nixon Peabody’s analysis.