Green v. McClive, C.A. No. 2023-0139-MTZ (Del. Ch. June 3, 2024)
The plaintiff filed claims against defendant McClive, alleging breach of contract, breach of fiduciary duty, and usurpation of corporate opportunities belonging to their Delaware LLC. In this letter decision, the Court of Chancery denied McClive’s motion to dismiss. The parties agreed that the LLC’s operating agreement preserved corporate fiduciary duties for its managers and that any waiver of those duties must be clear and unambiguous. The parties disputed whether certain language permitted McClive to usurp corporate opportunities through competing ventures. The relevant provision stated: “Other Business Ventures. The Managers and the Members may engage in or possess a significant interest in other business ventures of any nature and description, independently or with others.” The Court held that this language was not a sufficiently clear waiver of the duty of loyalty to allow such ventures to be competitors of the LLC.
This post was originally published on here
