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Eric Geringswald
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Eric Geringswald Posted on : Insider Community

Recent Delaware Supreme Court decisions illustrate Delaware’s contractarian approach to LLCs

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In an all-new Special Commentary to the 2020 Spring edition of CSC’s Delaware Laws Governing Business Annotated, attorneys Christopher Kelly and Daniel Rusk of Potter Anderson and Corroon LLP review three recent Delaware Supreme Court Decisions that demonstrate how Delaware law provides contracting parties flexibility to order the affairs of an LLC:

“In Oxbow Carbon & Minerals Holdings, Inc. v. Crestview-Oxbow Acquisition, LLC, the Court reiterated that the implied covenant of good faith and fair dealing will not override the express terms of a contract or save a party from a bad deal. In Leaf Invenergy Company v. Invenergy Renewables, LLC, the Court indicated that there will be a meaningful consequence in the form of bargained-for monetary damages from a company’s attempt to circumvent its contractual promises to preferred investors. And, in In re Shorenstein Hays-Nederlander Theatres LLC Appeals, the Court made clear that where the parties to an LLC agreement have chosen to incorporate loyalty concepts into contractual duties, fiduciaries may not compete against the LLC absent a contrary provision in the agreement clearly permitting such conduct.”

The authors’ detailed analysis of each case provides readers with unique insights about how Delaware law allows LLC agreement drafters to precisely tailor rights and obligations to further the entity’s purpose, and how the State’s courts “pay great deference to the specific terms and provisions of LLC agreements.”

Spring 2020

In addition to the all-new commentary, the Spring 2020 Edition of Delaware Laws Governing Business Entities includes updates through Chapter 232 of the 150th Delaware General Assembly, as well as updates to the Rules of the Court of Chancery through February 20, 2020.

More than 80 new case notes from Delaware state courts and from courts in other jurisdictions applying Delaware business entity law, as well as five new full text cases focusing on the latest legal developments

concerning control groups, inspection of records, special litigation committees, and breach of fiduciary duty. A Table of New Annotations lists added cases, and gray bars in the body of the book indicate where they have been inserted.

In-depth legal analyses explore the impact of the legislation coming out of the 2019 Session, including changes to provisions dealing with electronic signatures and delivery of documents, registered agent resignations, and appraisal rights.

A comprehensive resource

CSCPublishing releases Delaware Laws Governing Business Entities—its flagship publication—twice a year to ensure that practitioners are working with the most up-to-date statutory information and have access to the very latest case law. Unique features such as the legislative analysis and special commentary in this Spring edition provide additional resources and valuable insight for legal professionals working with Delaware entities.

A comprehensive fee table provides up-to-date information for calculating annual franchise taxes and other related entity fees, while Volume 2 contains the helpful “Guidelines for Persons Litigating in the Court of Chancery.”

A companion CD-ROM contains more than 150 forms for incorporation/formation, qualification, mergers, dissolution, and name reservation for all business entity types in Delaware. Readers can now access these forms via the LexisNexis Online Download Center. A listing of the forms and contact information for Delaware’s Division of Corporations can be found in the book’s appendix.

The Spring 2020 Edition of Delaware Laws Governing Business Entities is available as a two-volume softbound book or as an ebook, compatible with dedicated e-reader devices, computers, tablets and smartphones that use e-reader software or applications. It is also available on the LexisNexis Digital Library.