"We intend to continue serving as the general partner of the partnership with the goal, as always, of maximizing asset value for the partners," Kopper said in a Jan. 7 letter to the partners. A copy was included in the court file.
Lawyers for the partners suing Kopper said in court papers that they've complied with the partnership agreement's requirements for ousting the general partner. Limited partners with a combined investment of more than 66 percent of the partnership voted to remove Kopper, the lawyers said.
"Kopper has refused to acknowledge his removal and has taken numerous acts to jeopardize the partnership and the limited partners," Goldman said at the Jan. 10 hearing before Jacobs, according to a transcript.
For example, Kopper is trying to direct defense lawyers representing LJM2 in a dozen suits in Texas state court over deals involving the partnership, Enron and other Enron-related units, Joseph McLaughlin, a New York-based lawyer representing limited partners, noted in court papers.
"Plaintiffs believe that immediate removal of Michael Kopper is needed to ensure that the partnership and its limited partners receive adequate and conflict-free representation" in the suits, McLaughlin said in the filing.
Kopper also raided the partnership's accounts after learning of the bid to remove him, partners allege in court papers.
The day before limited partners voted to force him out, Kopper transferred US$4 million from the partnership to pay half his annual management fee though he was only owed about US$70,000, the partners alleged. He also took improper steps to disqualify the partners, they said.
"The limited partners, including some of the largest financial institutions in this country, want to stop the bleeding and the threats of Mr. Kopper," Goldman told Jacobs.
Among other investors who agreed to invest in LMJ2 are the American Home Assurance Co, US$22.7 million; the Arkansas Teachers Retirement System, US$30 million; AIG Private Equity Portfolio, US$7.2 million; the John D. and Catherine T. MacArthur Foundation, US$15 million; CIBC Capital Corp, US$15 million; Merrill Lynch LP Holdings Inc, US$16.6 million, and RHO Fund Investors II LLC, US$15 million, according to court filings.
Merrill Lynch is a passive, minority investor in Bloomberg LP, the parent of Bloomberg News. Kopper had US$6.9 million invested in the partnership, which amounted to 1.75 percent of the total, his lawyers said in court last month. A total of 52 investors agreed to put up US$387 million for stakes of the LJM2 partnership, Kopper's lawyers added in the papers.
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