Fiduciary Duties in LLCs and LPs: Considerations for Modifying or Waiving Duties of Alternative Entity Managers

Lessons From Delaware and Other Key States on Whether, When and How to Eliminate or Modify Default Duties

Recording of a 90-minute CLE webinar with Q&A


Conducted on Wednesday, October 28, 2015

Recorded event now available

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Program Materials

This CLE webinar will review the fiduciary duties limited partnership (LP) general partners and limited liability company (LLC) managers, managing members, and controlling members owe members of the alternative entity, using statutory and case law from Delaware and other key states as a backdrop. The panel will outline the circumstances under which fiduciary duties may be waived or modified by agreement of the parties and the legal risks of doing so. The panel will also discuss best practices for drafting fiduciary waiver provisions in entity operating agreements that are likely to withstand legal challenges.

Description

LPs and LLCs can modify the fiduciary duties owed to their members via contract provisions in the entity’s operating agreement. However, determining whether to expand, restrict or eliminate the fiduciary duties of LP general partners or LLC managers, managing members, or controlling members requires a careful analysis of the motivation for and potential consequences of doing so.

Counsel advising LPs and LLCs must understand the implications of recent case law in Delaware and other key states for modifying LLC and LP fiduciary duties, including how courts have applied the implied covenant of good faith and fair dealing when interpreting duty modification or waiver clauses in entity operating agreements. Counsel must develop effective strategies for negotiating fiduciary waiver provisions in the operating agreement.

Listen as our authoritative panel of business attorneys guides you through the latest legal developments regarding the modification or waiver of fiduciary duties in the context of LLCs and LPs. The panel will discuss when fiduciary duties can be altered or eliminated and best practices for drafting fiduciary duty waiver provisions in the entity operating agreement.

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Outline

  1. Relevance of default fiduciary duties to LLCs and LPs
  2. Circumstances under which fiduciary duties may be waived or modified
    1. Delaware law
    2. Laws of other key states
  3. Potential consequences/risks of modifying or waiving duties
  4. Drafting fiduciary duty modification provisions in the entity operating agreement—best practices

Benefits

The panel will review these and other key issues:

  • Under what circumstances might LLC managers or LP general partners want to modify their default fiduciary duties?
  • What are the best practices for drafting provisions in the entity operating agreement to allow for the modification or waiver of fiduciary duties?
  • How has the implied covenant of good faith and fair dealing been applied and interpreted by courts in the context of LLC or LP fiduciary waiver disputes?

Faculty

Brian M. Gottesman
Brian M. Gottesman

Partner
Berger Harris

Mr. Gottesman is the head of his firm's Corporate/Business Entity Counseling practice group. He has extensive...  |  Read More

Michelle P. Quinn
Michelle P. Quinn

Partner
Berger Harris

Ms. Quinn's practice focuses primarily on rendering advice as to matters of Delaware law relating to...  |  Read More

Stubenberg, Melissa
Melissa K. Stubenberg

Director
Richards Layton & Finger

Ms. Stubenberg has extensive experience in various matters involving Delaware limited liability companies and...  |  Read More

Other Formats
— Anytime, Anywhere

Strafford will process CLE credit for one person on each recording. All formats include program handouts. To find out which recorded format will provide the best CLE option, select your state:

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