Siry Investment v. Farkhondehpour CA2/2

FACTS AND PROCEDURAL BACKGROUND2

I. The Dispute

In 1998, Moe Siry, Saeed Farkhondehpour (Farkhondehpour) and Morad Neman (Neman) formed a limited partnership to renovate and lease space in a mixed-use building in downtown Los Angeles. The partnership agreement named one general partner (namely, 416 South Wall Street, Inc. (416 South Wall Street), of which Farkhondehpour was president), and four limited partners (namely, Siry Investment, L.P. (Siry), the 1993 Farkhondehpour Family Trust (of which Farkhondehpour was trustee), the Neman Family Irrevocable Trust (of which Neman was trustee) and the Yedidia Investment Defined Benefit Plan Trust (of which Neman was also trustee)). In 2003, Farkhondehpour, Neman, and 416 South Wall Street created another entity, required the building’s tenants to pay their rent to that entity, and thereby “improperly divert[ed] rental income away from the . . . [limited] partnership and into” that separate entity. Farkhondehpour and Neman also charged personal and other nonpartnership expenses to the partnership. Siry was ultimately underpaid its distributions, but

We draw the facts and procedural background that are pertinent to this appeal…