N.Y. Partnership Law § 115-a: Limited partners' derivative action brought in the right of a limited partnership to procure a judgment in its favor

§ 115-a. Limited partners' derivative action brought in the right of a

limited partnership to procure a judgment in its favor. 1. An action

may be brought in the right of a limited partnership to procure a

judgment in its favor, by a limited partner, additional limited partner,

or substituted limited partner.

2. In any such action, it shall be made to appear that at least one

plaintiff is such a limited partner, additional limited partner or

substituted limited partner at the time of bringing the action, and that

he was such at the time of the transaction of which he complains, or

that his status as substituted limited partner devolved upon him by

operation of law or pursuant to the terms of the certificate of limited

partnership or written partnership agreement in effect at the time of

the transaction of which he complains.

3. In any such action, the complaint shall set forth with

particularity the efforts of the plaintiff to secure the initiation of

such action by the general partner or partners, or the reasons for not

making such effort.

4. Such action shall not be discontinued, compromised or settled,

without the approval of the court having jurisdiction of the action. If

the court shall determine that the interests of the limited partners,

additional limited partners or substituted limited partners, will be

substantially affected by such discontinuance, compromise or settlement,

the court, in its discretion, may direct that notice, by publication or

otherwise, shall be given to the limited, additional or substituted

limited partners whose interests it determines will be so affected; if

notice is so directed to be given, the court may determine which one or

more of the parties to the action shall bear the expense of giving the

same, in such amount as the court shall determine and find to be

reasonable in the circumstances, and the amount of such expense shall be

awarded as special costs of the action and recoverable in the same

manner as statutory taxable costs.

5. If the action on behalf of the limited partnership was successful,

in whole or in part, or if anything was received by the plaintiff or

plaintiffs or a claimant or claimants as a result of a judgment,

compromise or settlement of an action or claim, the court may award the

plaintiff or plaintiffs, claimant or claimants, reasonable expenses,

including reasonable attorneys' fees, and shall direct him or them to

account to the partnership for the remainder of the proceeds so received

by him or them. This paragraph shall not apply to any judgment rendered

for the benefit of injured limited, additional or substituted limited

partners only and limited to a recovery of the loss or damage sustained

by them.