Fiduciary Duties In Delaware LLC Agreements

Law360, New York (March 31, 2010, 2:34 PM EDT) -- Delaware affords contracting parties of an LLC wide latitude to expand, restrict, or eliminate fiduciary duties owed by managers and controlling members.

While the Delaware Limited Liability Company Act (the "LLC Act") does not specify a statutory default provision, a recent Delaware Chancery Court decision has confirmed that in the absence of an explicit contrary provision in the LLC agreement, LLC managers and controlling members owe traditional fiduciary duties of loyalty and care to each other and to the LLC.[1]

Such a default rule requires corporate...
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