Grant was the general partner in Oil Build, LP, which he formed to construct offshore oil rigs. He asked Lucinda to invest in the company. A low bridge separated Oil Build’s rig construction site from the open sea. Grant admitted that this setup could increase the cost to deliver the rigs out to sea, but he assured Lucinda that the cost increase would not be significant.

Lucinda agreed to invest $10 million and became a limited partner. Oil Build’s bids proved too high for the company to obtain work. Without informing Lucinda, Grant sold the limited partnership’s assets and pocketed the profits.

Did Grant owe and subsequently breach a duty to Lucinda? Yes. General partners owe the partnership a duty of ______________ and a duty of ______________, as well as an obligation to act in ______________ ______________ and in the best ______________ of the partnership.

General partners owe their co-partners, including any limited partners, the highest fiduciary duty. Here, Grant was the general partner. He owed Lucinda, the firm’s limited partner, this duty. He breached the duty by misrepresenting the significance of the low bridge, by selling the firm’s assets without notifying her, and by pocketing the profits.