(a) If a limited partnership is named as or made a party in a derivative proceeding, the partnership may appoint a special litigation committee to investigate the claims asserted in the proceeding and determine whether pursuing the action is in the best interests of the limited partnership. If the limited partnership appoints a special litigation committee, on motion by the committee made in the name of the limited partnership, except for good cause shown, the court must stay discovery for the time reasonably necessary to permit the committee to make its investigation. This subsection (a) does not prevent the court from:
Terms Used In Tennessee Code 61-3-905
Discovery: Lawyers' examination, before trial, of facts and documents in possession of the opponents to help the lawyers prepare for trial.
Injunction: An order of the court prohibiting (or compelling) the performance of a specific act to prevent irreparable damage or injury.
Litigation: A case, controversy, or lawsuit. Participants (plaintiffs and defendants) in lawsuits are called litigants.
Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
Person: means an individual, business corporation, nonprofit corporation, partnership, limited partnership, limited liability company, cooperative association, unincorporated nonprofit association, statutory trust, business trust, common-law business trust, estate, trust, association, joint venture, public corporation, government or governmental subdivision, agency, or instrumentality, or any other legal or commercial entity. See Tennessee Code 61-3-101
Plaintiff: The person who files the complaint in a civil lawsuit.
Temporary restraining order: Prohibits a person from an action that is likely to cause irreparable harm. This differs from an injunction in that it may be granted immediately, without notice to the opposing party, and without a hearing. It is intended to last only until a hearing can be held.
(1) Enforcing a person‘s right to information under § 61-3-304 or § 61-3-407; or(2) Granting extraordinary relief in the form of a temporary restraining order or preliminary injunction.(b) A special litigation committee must be composed of one (1) or more disinterested and independent individuals, who may be partners.(c) A special litigation committee may be appointed:
(1) By a majority of the general partners not named as parties in the proceeding; or(2) If all general partners are named as parties in the proceeding, by a majority of the general partners named as defendants.(d) After appropriate investigation, a special litigation committee may determine that it is in the best interests of the limited partnership that the proceeding:
(1) Continue under the control of the plaintiff;(2) Continue under the control of the committee;(3) Be settled on terms approved by the committee; or(4) Be dismissed.(e) After making a determination under subsection (d), a special litigation committee shall file with the court a statement of the committee’s determination and report supporting the committee’s determination and shall serve each party with a copy of the determination and report. The court shall determine whether the members of the committee were disinterested and independent and whether the committee conducted its investigation and made the committee’s recommendation in good faith, independently, and with reasonable care, with the committee having the burden of proof. If the court finds that the members of the committee were disinterested and independent and that the committee acted in good faith, independently, and with reasonable care, the court must enforce the committee’s determination. Otherwise, the court shall dissolve the stay of discovery entered under subsection (a) and allow the action to continue under the control of the plaintiff.
