Delaware LLC Parties Cannot Bypass Fiduciary Waivers via Implied Covenant

This article examines a recent Delaware decision dismissing a post-closing transaction challenge and its broader implications for LLC governance. Readers will gain insight into how courts strictly enforce operating agreements that waive fiduciary duties and permit self-interested conduct. The piece also explores the limits of the implied covenant of good faith and fair dealing, emphasizing that it cannot be used to override detailed contractual provisions. It highlights practical considerations for drafting agreements, structuring transactions, and addressing disclosure and minority protections in LLCs.

Law clerk Katie Lutz also contributed to this article.