ACTIONS BY PARTNERS

Iowa Code tit. XII, ch. 488, art. 10

in effect

Iowa Code § 488.1001 Direct action by partner.

488.1001. Direct action by partner. 1. Subject to subsection 2, a partner may maintain a direct action against the limited partnership or another partner for legal or equitable relief, with or without an accounting as to the partnership’s activities, to enforce the rights and otherwise protect the interests of the partner, including rights and interests under the partnership agreement or this chapter or arising independently of the partnership relationship. 2. A partner commencing a direct action under this section is required to plead and prove an actual or threatened injury that is not solely the result of an injury suffered or threatened to be suffered by the limited partnership. 3. The accrual of, and any time limitation on, a right of action for a remedy under this section is governed by other law. A right to an accounting upon a dissolution and winding up does not revive a claim barred by law. 2004 Acts, ch 1021, §84, 118

Iowa Code § 488.1002 Derivative action.

488.1002. Derivative action. A partner may maintain a derivative action to enforce a right of a limited partnership, but a partner shall not commence such a proceeding until both of the following have occurred: 1. A written demand has been made upon the general partner or partners, requesting that they cause the limited partnership to take suitable action. 2. Ninety days have expired from the date the demand was made, unless the partner has earlier been notified that the demand has been rejected by the general partner or partners or unless irreparable injury to the limited partnership would result by waiting for the expiration of the ninety-day period. 2004 Acts, ch 1021, §85, 118

Iowa Code § 488.1003 Proper plaintiff.

488.1003. Proper plaintiff. A derivative action may be maintained only by a person that is a partner at the time the action is commenced and where one of the following also applies: 1. The person was a partner when the conduct giving rise to the action occurred. 2. The person’s status as a partner devolved upon the person by operation of law or pursuant to the terms of the partnership agreement from a person that was a partner at the time of the conduct. 2004 Acts, ch 1021, §86, 118; 2005 Acts, ch 19, §71

Iowa Code § 488.1004 Pleading.

488.1004. Pleading. In a derivative action, the petition must state with particularity the date and content of plaintiff’s demand and either the general partners’ response to the demand or how the limited partnership would be irreparably harmed by waiting for such a response for ninety days. 2004 Acts, ch 1021, §87, 118

Iowa Code § 488.1005 Proceeds and expenses.

488.1005. Proceeds and expenses. 1. Except as otherwise provided in subsection 2: a. Any proceeds or other benefits of a derivative action, whether by judgment, compromise, or settlement, belong to the limited partnership and not to the derivative plaintiff. b. If the derivative plaintiff receives any proceeds, the derivative plaintiff shall immediately remit them to the limited partnership. 2. If a derivative action is successful in whole or in part, the court may award the plaintiff reasonable expenses, including reasonable attorney fees, from the recovery of the limited partnership. 3. If the court finds that the derivative proceeding was commenced or maintained without reasonable cause or for an improper purpose, it may order the plaintiff to pay any defendant’s reasonable expenses, including reasonable attorney fees, incurred in defending the action. 2004 Acts, ch 1021, §88, 118