LLC Provisions Regarding Directors and Managers: Recent Delaware Decisions and Key Practice Points for Counsel

Crafting Safe Harbors, Eliminating Corporate-Type Fiduciary Duties, Implied Covenants and More

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


Conducted on Wednesday, October 31, 2018

Recorded event now available

or call 1-800-926-7926
Program Materials

This CLE webinar will guide corporate counsel on recent Delaware court decisions concerning LLC director and manager breach claims and best practices to avoid liability. The panel will discuss essential provisions for drafting LLC agreements, crafting safe harbors, methods in eliminating corporate-type fiduciary duties, application of implied covenants, and other complex issues to assist counsel in avoiding litigation and claims against LLC directors and managers.

Description

The number of LLCs and other pass-through entities formed in Delaware are increasing. To maximize the benefit from the advantages of LLC structure after recent Delaware court decisions, counsel must ensure that LLC agreements precisely address (or eliminate) the obligations and duties of LLC directors and managers.

Recent Delaware court rulings put LLC directors and managers on notice of the consequences of actions that do not comply with the terms and provisions of the company’s operating agreement. These cases focused on issues such as a lack of safe harbor protections in conflicting transactions (and/or the failure to satisfy such safe harbors), ambiguity of contract provisions, language suggestive of fiduciary duties beyond what is stated within the LLC agreement, the implied covenant of good faith and fair dealing, and other matters that contrast between LLC and corporate law.

In the corporate context, directors’ fiduciary duties of care and loyalty to the corporation and its shareholders cannot be disclaimed by agreement. State law may have the same standards for LLC directors and managers as a default rule, but such duties may be, and typically are, modified or eliminated by the terms of the LLC agreement, so as to limit management’s duties to those specified in the agreement or those that courts may reasonably infer under the implied covenant of good faith and fair dealing. Counsel must know the recent Delaware court decisions to identify considerations for negotiating and drafting LLC agreements.

Listen as our panel discusses recent Delaware court decisions regarding LLC agreements, critical issues regarding directors and managers, and key points and best practices in drafting provisions to avoid breach claims in light of recent cases.

READ MORE

Outline

  1. Recent Delaware court decisions regarding LLC directors and managers
  2. Key provisions in drafting LLC agreements to limit breach claims and liability
  3. Methods in eliminating corporate-type fiduciary duties and crafting safe harbors
  4. Application of implied covenants and guidance on other issues to assist counsel
  5. Best practices for avoiding and managing breach claims for counsel

Benefits

The panel will review these and other critical issues:

  • Identifying essential issues from recent Delaware court decisions regarding LLC agreements
  • Drafting modern forms of LLC and limited partnership agreements
  • Fiduciary disclaimer provisions in LLC and LP agreements
  • Recognizing exculpation or indemnification provisions that may suggest fiduciary duties, and crafting such provisions carefully to avoid such suggestion
  • Methods of providing safe harbors for conflicted transactions
  • Avoiding ambiguity and unintended consequences in the interrelationship of provisions
  • Defining the standards of conduct
  • Application of the implied covenant of good faith and fair dealing

Faculty

Conti, Louis
Louis T.M. Conti

Partner
Holland & Knight

Mr. Conti's practice includes serving as outside counsel to businesses of all sizes, mergers and acquisitions, cash...  |  Read More

Jacobs, Lisa
Lisa R. Jacobs

Partner
DLA Piper

Ms. Jacobs represents businesses and institutional and individual clients in domestic and international transnational...  |  Read More

Kelly, Christopher
Christopher N. Kelly

Partner
Potter Anderson Corroon

Mr. Kelly focuses his practice on complex litigation and counseling matters involving Delaware corporations 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:

CLE On-Demand Video

$297

Download

$297