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Fiduciary Duties of Managers of LLCs: The Status of the Debate in Delaware

Co-authored by Jason Jowers

In Auriga Capital Corporation v. Gatz Properties, LLC, __ A.3d __, 2012 WL 361677 (Del. Ch. Jan. 27, 2012), the Delaware Court of Chancery found that, unless eliminated or restricted in the LLC agreement, managers of LLCs owe default fiduciary duties of loyalty and care. Delaware Chief Justice Myron T. Steele’s writings on the subject off the bench, however, suggest that he would not reach the same conclusion. In their article, Jowers and Lazarus: (1) analyze Chancellor Strine’s opinion in Auriga Capital; (2) summarize Chief Justice Steele’s writings on the topic; and 3) provide key takeaways to practitioners based on the current state of the law.

First published in Business Law Today, February 2012. Link to article.
Reprinted with permission.

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