Delaware court issues key opinion on fiduciary duties owed to LLC members

Posted on 02/03/2012 at 10:17 AM by The Newsroom

On January 27, 2012, the Delaware Chancery Court (Chancellor Strine) issued what one commentator has called a magnum opus in the case of Auriga Capital Corp. v. Gatz Properties LLC.  This 75-page opinion explains how fiduciary duties are owed by a manager to an LLC's members absent an expressed limitation or elimination in the operating agreement.  For Iowa LLCs the takeaway is to be aware of the default statutory fiduciary duties in Iowa Code Section 489.409 and the ability to limit or eliminate these duties per Section 489.110 (but only if such limitations or eliminations are not “manifestly unreasonable”, whatever that might be found to mean). The full version of this article is available online at Ward on Iowa Limited Liability Company Law.

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