Bill on Bankruptcy: What's in the $83M ResCap Examiner's Report?
In Faiz Khan and Ralph Finger v. Warburg Pincus, LLC et al., the Delaware Court of Chancery held that the implied covenant of good faith and fair dealing was not applicable to a private equity sponsor’s amendment of a limited...more
LLC managers owe fiduciary duties of loyalty, care, and good faith and fair dealing to both the LLC and the LLC’s members. (Corp Code §17704.09.) One of the most common claims in LLC litigation is “breach of fiduciary duty”...more
Last week, Peter Mahler blogged about a recent decision holding that a minority shareholder’s claim against its majority co-owners for breach of fiduciary duty in connection with a sale of the business to a third party...more
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
The Nevada Legislature and Gov. Steve Sisolak have recently approved Assembly Bill No. 207 (AB 207), a bill passed under the leadership and guidance of Assembly Speaker Jason Frierson. AB 207 makes certain meaningful changes...more
When the Nevada legislature enacted the state's limited-liability company act, it did not prescribe the fiduciary duties, if any, owed by managers. As I observed...more
It is no secret that LLC managers enjoy a lot of discretion regarding how they operate the LLC. Members of the LLC often find it difficult to challenge the manager’s decisions on key transactions, investments, and other...more
Over the last several years, the books-and-records proceeding and its corresponding shareholder rights of inspection seem to have entered a bit of renaissance period in the courts. ...more
The “Seven Critical Mistakes LLCs Make” Series - This series of posts covers some of the most serious mistakes that LLCs regularly make. Here are...short summaries of each: Choosing the Wrong Business Partners —...more
The Delaware Supreme Court recently affirmed the dismissal of a co-founder’s claim that a private equity investor and its affiliated managers breached the implied covenant of good faith and fair dealing in connection with the...more
Delaware has long been the jurisdiction of choice when forming a limited liability company (LLC). One reason is flexibility, with members themselves having the power to define their preferred relationship within their LLC...more
The implied covenant of good faith and fair dealing was recently addressed by Vice Chancellor Glasscock in the decision of Miller v. HCP & Co., C.A. No. 2017-0291-SG (Del. Ch. Feb. 1, 2018). The implied covenant applies only...more
In re Oxbow Carbon LLC Unitholder Litigation, C.A. 12447-VCL (February 12, 2018) - This may be the definitive decision on when and how to apply the covenant in every LLC agreement to act in good faith and deal fairly. Here...more
On February 1, 2018, the Delaware Court of Chancery granted defendants’ motion to dismiss an action brought by minority unitholders of Trumpet Search, LLC (“Trumpet” or the “Company”). The defendants were other unitholders...more
Miller v. HCP & Company, C.A. 2017-0291-SG (February 1, 2018) - This decision resolves the tricky issue of when the provisions of an LLC agreement do not allow “gap filling” so as to permit a claim for violation of the...more
The nation’s leading forum for business and shareholder disputes recently confirmed that alternative entities such as limited liability companies (LLCs), limited partnerships (LPs) and master limited partnerships (MLPs) can...more
Based on a number of cases decided by the Delaware courts in 2013, below we summarize practice tips regarding careful drafting of contractual provisions and complying with technical and statutory requirements....more