Peterson Group and Wellington Yu were sued for breach of a real estate development agreement through their limited partnership, PGI Development. The trial court tried to hold them personally liable by piercing the corporate veil and treating them as alter egos of PGI. The Texas Court of Appeals reversed this decision, ruling that Texas law does not allow courts to pierce the veil of a limited partnership—the statutory liability protections for limited partners are absolute and cannot be overridden by equitable doctrines. This protects subcontractors and other parties from being able to reach the personal assets of limited partners, even in fraud or breach cases.
Limited partnership structures provide stronger liability protection than corporations—courts cannot pierce the veil even for fraud or breach of contract claims
If you contract with a limited partnership, you cannot pursue the personal assets of limited partners; you are limited to partnership assets