No-Fault Divorce

A "no fault divorce" clause permits investors, at a time after the final closing date, to remove the general partner of a fund and either terminate the Partnership or appoint a new general partner. This is done if a super-majority of them (typically 75%) "lose faith" in its general partner's abilities. This clause covers situations where the general partner has not defaulted or breached the terms and conditions of the Limited Partnership Agreement. Either an ordinary consent or a special consent may be required to effectuate the removal of the general partner and this clause will usually be subject to the general partner receiving compensation for its removal.