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By an amendment to a limited partnership agreement by a majority of the limited partners, Aztec (general partner) was replaced by MHM (current general partner), but Aztec refused to step aside.
The trial court granted summary judgment in favor of MHM which substituted MHM for Aztec. On appeal, the court affirmed, holding that neither the Texas Uniform Partnership Act, Tex. Rev. Civ. Stat. Ann. art. 6132(b) (1970 and Supp. 1985), nor the Texas Uniform Limited Partnership Act, Tex. Rev. Civ. Stat. Ann. art. 6132a (1970 and Supp. 1985) prohibited removal and substitution of a general partner in a limited partnership, even though the partnership agreement initially did not directly allow such action, if the partnership agreement provided a method for amendment and an amendment permitting substitution and removal of a general partner was adopted.
The court held that amendment of the agreement did not violate contract law or the agreement itself because the parties to the agreement agreed it could be amended by a certain procedure and that procedure was followed.The court affirmed summary judgment in favor of MHM which substituted MHM for Aztec as general partner. Neither the Texas Uniform Partnership Act nor the Texas Uniform Limited Partnership Act prohibited substitution of a general partner in a limited partnership if the partnership agreement provided for amendment and an amendment permitting substitution of a general partner was adopted.
Thus, MHM wins.
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