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Wimbledon Fund LP-Absolute Return Fund Series v. SV Special Situations Fund LP, CA No. 4780 (Del. Ch. Feb. 4, 2011)

February 4, 2011

In this decision concerning a limited partner’s efforts to withdraw from a limited partnership, the Court of Chancery ruled on certain issues pertaining to the supplementation of a summary judgment record following a remand from the Delaware Supreme Court. The case involved a dispute about the right of Wimbledon Fund LP-Absolute Return Fund Series (“Wimbledon”) to withdraw its participation as a limited partner in SV Special Situations Fund LP (“SV Fund”). In an earlier ruling, Vice Chancellor Strine granted summary judgment in favor of SV Fund, finding that the record evidence indicated that Wimbledon had not effectively withdrawn from the fund. Wimbledon appealed to the Delaware Supreme Court and, before oral argument, moved to supplement the record with documents in its possession that indicated SV Fund had in fact accepted its withdrawal. The Supreme Court explained that Supreme Court Rule 8 proscribes its review of questions not fairly presented to the trial court, and therefore remanded the matter to the Court of Chancery “so that the record can be supplemented.” On remand, Vice Chancellor Strine reached two mutually exclusive conclusions, based on two plausible interpretations of the Supreme Court’s remand order.

The Vice Chancellor first held that Wimbledon’s purported inability to locate the documents, due to two office moves and purported confusion about the location of certain files, did not qualify it, under Rule 60(b), for relief from entry of final judgment. The Vice Chancellor observed that Wimbledon made strategic decisions to move for summary judgment without taking any discovery or filing a Rule 56(f) affidavit. He held, therefore, that this evidence would not qualify as newly discovered, cause manifest injustice, or present extraordinary circumstances. Accordingly, the Court denied Wimbledon’s motion for relief from entry of judgment, pursuant to Court of Chancery Rule 60(b).

Because, however, the Vice Chancellor could also read the Supreme Court’s order to have instructed him to allow Wimbledon to supplement the record, pursuant to Rule 60(b), the Vice Chancellor also determined that the two documents would, if allowed into the summary judgment record, raise genuine issues of material fact. The Vice Chancellor, therefore, observed that if the Supreme Court had ordered him to allow Wimbledon to supplement the record, then he would deny the parties’ cross-motions for summary judgment, conditioned on Wimbledon’s paying attorneys’ fees and expenses incurred by SV Fund since January 11, 2010, when Wimbledon decided to file its answering brief to SV Fund’s cross-motion for summary judgment rather than moving to supplement the record with these documents.

The full opinion is available here