Commercial Law Counseling

CLIENT ALERT (9/08/2009)

The recent Chancery Court decision in Stockman v. Heartland Industrial Partners L.P. considered the advancement and indemnification provisions in a Delaware limited partnership agreement.  Click here to download a copy of the court’s opinion.  The case is important for its specific holding with respect to the construction of those provisions. 
 
However, the greater significance of the case may be the broad principle it enunciated that, as a general matter, ambiguous terms in the constituent documents of a limited partnership will be construed against the partnership.  Presumably, this principle would also apply to the construction of a limited liability company agreement.
 
Click here for a Commercial Law Counseling Group discussion of the implications of this decision.

CLIENT ALERT (7/14/2009)

The Delaware legislature enacted several amendments to three of Delaware’s four “alternative entity” statutes that become effective on August 1, 2009. 

Among other things, the amendments (I) effectively codify the doctrine of independent legal significance, as developed in Delaware corporation law, to apply to LLCs, limited partnerships and general partnerships; and (ii) confirm the ability by merger or consolidation to amend an operating or partnership agreement or adopt a new operating or partnership agreement for an entity that is the surviving or resulting entity in a merger or consolidation

Click here to download Legislative Developments in Delaware’s “Alternative Entities” – Limited Liability Companies, Limited Partnership and Partnerships, a summary of the amendments.

CLIENT ALERT (6/18/2009)

The recent Chancery decision In re NextMedia Investors, LLC looked at the amendment provisions of an LLC agreement.  The amendment provision in question provided that certain sections of the LLC agreement could not be amended "to adversely affect any Member" without the consent of each Member to be adversely affected.  The LLC had adopted an amendment extending the date on which it would dissolve by four years.  The amendment was overwhelmingly approved by the members, but the petitioners did not consent and brought an action to have the LLC declared dissolved in accordance with the original agreement.  The court’s decision adds a new and important take on two issues that frequently arise –the specific form with regard to the extension of a dissolution date and, what constitutes an adverse effect.

Click here to read an analysis of the implications of the In re NextMedia Investors, LLC decision (and to download a copy of the Court’s opinion).