In In re P3 Health Group Holdings, LLC, the Delaware Court of Chancery held that a principal of a private equity fund was subject to jurisdiction in Delaware for alleged actions he took on behalf of one of the private equity funds’ portfolio limited liability companies, even though he was not an officer or the designated manager of the operating company. The court found that because, even though the principal was not the manager or titled officer of the portfolio company, the principal made decisions on behalf of the company, directed the company’s management to take certain actions, instructed the company’s advisors to perform work without authorization from company management, and enjoyed essentially unfettered access to company information.
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Source: A Cautionary Tale About PE Principal Liability for Portfolio Company Operations