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On December 12, 2017, the New York Appellate Division, First Department, issued an opinion affirming the dismissal of each of plaintiffs’ sixteen causes of action in connection with certain real estate investments made by Lehman-related entities, including claims for fraud, breach of fiduciary duty, breach of contract, aiding and abetting fraud and breach of fiduciary duty, and declaratory relief claims against several former senior officers of Lehman Brothers Holdings, Inc. represented by Simpson Thacher.   

The Court held, with respect to Simpson Thacher’s clients, that plaintiffs’ allegations of scienter were inadequate and fiduciary claims were barred by the exculpatory provision in the parties’ contracts. The court also rejected allegations “that the contracts included unconscionable provisions, as the penalties contained in the contracts are permitted in limited partnership agreements under both Delaware and New York law.”