Alden Torch Financial Achieves Victory at Trial in Dispute with Developer General Partner

King & Spalding prevailed after a bench trial in the Eastern District of New York on behalf of Alden Torch Financial (“Alden Torch”) and its affiliate in a dispute with the developer general partner of a partnership that operates a low-income housing tax credit (LIHTC) property in Williamsville, New York. After a bench trial last July, on September 5, 2024, the Court granted declaratory judgment in favor of Alden Torch’s affiliate, Saugatuck, LLC, adopting Saugatuck’s interpretation of the parties’ Partnership Agreement and a related Option Agreement, and rejecting the general partner’s competing request for declaratory relief. The Court concluded that the general partner—a local real estate developer—had “intentionally delayed” its compliance with Saugatuck’s contractual rights “in order to obtain what it hoped would be a tactical advantage in this litigation and the execution of its Option right.” The Court further held that the general partner breached its obligation under the Partnership Agreement to act “promptly” on behalf of Saugatuck and had also acted with unclean hands. Finally, the Court rejected the general partner’s breach of contract counterclaim for multiple reasons, including failure to name a necessary party, failure to establish a breach, and failure to carry its burden with respect to establishing damages, and specifically held that the general partner was at fault for any damages it suffered based on its own misconduct. This decision is the latest in a string of victories that King & Spalding has won on behalf of Alden Torch and its affiliates over several years, and will help ensure that the federal LIHTC program continues to operate as Congress intended. The case citation is Case 2:19-cv-00217-SIL Saugatuck, LLC v. St. Mary's Commons Associates, L.L.C.