On July 9, 2020, the Kentucky Supreme Court, in a 7-0 decision, dismissed claims brought by eight members of Kentucky Retirement Systems (“KRS”), which manages Kentucky’s public employee pension plans. The Plaintiffs sought to bring breach of fiduciary duty and aiding and abetting breach of fiduciary duty claims on a “derivative” basis against numerous defendants, including Simpson Thacher clients PAAMCO and Prisma, which are fund-of-fund managers, a third fund manager, various KRS trustees and officers, and other advisors. After the trial court denied motions to dismiss, Simpson Thacher took the lead on successfully petitioning the Kentucky Court of Appeals for a writ of prohibition, which found that the Plaintiffs, none of whom failed to receive pension benefits in the normal course, lacked constitutional standing to bring the case on behalf of KRS or the Commonwealth of Kentucky, and that the Circuit Court therefore lacked subject matter jurisdiction. The Kentucky Supreme Court reached the same result, finding that “Plaintiffs lack an injury in fact sufficient to support constitutional standing” and remanding to the trial court “with direction to dismiss the complaint.” The case is captioned Mayberry, et al v. KKR & Co. L.P. et al., No. 2019-SC-00042-TG.
The Simpson Thacher team included Paul Curnin, Pete Kazanoff, Mike Garvey, David Elbaum, Sara Ricciardi, Shannon McGovern, Michael Carnevale, Tyler Anger and Katie Hardiman. Paul Curnin argued the standing issue before the Kentucky Supreme Court on behalf of all Defendants.
The decision was covered by Reuters Legal and The American Lawyer Litigation Daily, among others. Simpson Thacher was also recognized as an AmLaw Litigation Daily “Litigator of the Week” finalist for the Firm's work in this case (subscription may be required).