The Delaware Supreme Court, in a decision affirming a ruling by Delaware Court of Chancery Chancellor Leo E. Strine Jr., scored the chancellor for unnecessarily pontificating on statutory law and inserting personal views into his decision.
In a per curiam opinion issued Wednesday in Gatz Properties v. Auriga Capital, the justices ruled that Strine correctly found that the defendant, William A. Gatz, breached his fiduciary and contract duties to an LLC, dubbed Peconic Bay LLC, which was formed to own a golf course on Long Island, N.Y. However, the court criticized Strine for taking a portion of his 75-page opinion to ruminate on whether Delawares Limited Liability Company Act imposes default fiduciary duties upon an LLCs managers and controllers. Strine concluded that such duties are imposed by default unless both parties specifically write in the LLC agreement that such duties do not apply.
