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Breach of Contract › Fiduciary Duty › LLC Agreements

Cadwalader, Wickersham & Taft LLP

Delaware Chancery Court Finds Private Equity Majority Owner Not Liable to Minority Investors Where LLC Agreement Waived Fiduciary...

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In a recent decision, the Delaware Court of Chancery dismissed breach of fiduciary duty claims asserted by minority unitholders in connection with the acquisition of CityMD by VillageMD.  In Kahn, et al. v. Warburg Pincus, et...more

Morris James LLP

Chancery Rejects Attempt to Disguise Breach of Fiduciary Duty Claim Where LLC Agreement Waived All Traditional Fiduciary Duties

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Delaware permits the elimination of fiduciary duties in limited liability company agreements. Notwithstanding, and just like in any other contract, parties to a limited liability company agreement are still subject to the...more

Jackson Walker

Business Court of Texas Rebuffs Member’s Duty Claim, Reaffirms Freedom of Contract in LLC Agreement

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A recent opinion from the Business Court of Texas, Eighth Division (Fort Worth), provides a crisp reminder that an LLC’s company agreement can all but eliminate fiduciary duties among its members and managers. In Tall v....more

Morris James LLP

Chancery Sustains Claims for Improper Termination of Agreements For Cause in Connection with a Joint Venture to Develop Data...

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W.D.C. Holdings, LLC v. IPI Partners, LLC, C.A. No. 2020-1026-JTL (Del. Ch. June 22, 2022) - Two entities entered into a joint venture to develop data centers for Amazon. One entity managed the joint venture day to day,...more

Morris James LLP

Chancery Addresses Whether LLC Agreement Modified or Eliminated Fiduciary Duties

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In Re Cadira Group Holdings, LLC Litigation, Consolidated C.A. No. 2018-0616-JRS (Del. Ch. July 12, 2021) - The Delaware Limited Liability Company Act provides that “the fiduciary duties of a member, manager, or other...more

Morris James LLP

Implied Covenant of Good Faith and Fair Dealing Saves Employee’s Claim for Improper Termination Under Company’s LLC Agreement

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Smith v. Scott, C.A. No. 2020-0263-JRS (Del. Ch. Apr. 23, 2021) - The Delaware LLC Act provides that fiduciary duties may be expanded or limited by the provisions of an LLC agreement. If the agreement is silent, then...more

Morris James LLP

Chancery Construes LLC Agreement as Imposing Only the Managerial Duty to Act in Good Faith and Dismisses Claims for Failure to...

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MKE Holdings v. Schwartz, C.A. No. 2018-0729-SG (Del. Ch. Sept. 26, 2019). Under Delaware law, the managers of a limited liability company owe the entity and its members the traditional common law fiduciary duties of care...more

Morris James LLP

Court of Chancery Finds Agreements Unenforceable for Lack of Assent, Dismisses Remaining Claims for Lack of Personal Jurisdiction

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Eagle Force Holdings, LLC v. Campbell, C.A. No. 10803-VCMR (Del. Ch. Aug. 29, 2019). Parties to a contract must provide evidence of an overt manifestation of assent for a contract to be enforceable under Delaware law....more

Morris James LLP

Court of Chancery Addresses Contract Formation

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CSH Theatres L.L.C. v. Nederlander of San Francisco Associates, C.A. No. 9380-VCMR (Del. Ch. July 31, 2018) - This drama arises from a dispute involving the Curran Theatre in San Francisco. The decision mostly deals with...more

Morris James LLP

Self-Dealing Conduct Supporting Fiduciary-Duty Claims Was Covered by Contractual Duties Imposed in the LLC Agreement

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The Delaware Limited Liability Company Act’s policy is to give the maximum effect to the principle of freedom of contract in LLC operating agreements. The act permits parties to eliminate common-law fiduciary duties, and...more

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