The Delaware Court of Chancery has held that under the Delaware Limited Liability Company Act, creditors of an insolvent Delaware limited liability company do not have standing to pursue a derivative claim against the managers of the company.
CML V, LLC lent money to JetDirect Aviation Holdings LLC, a private jet charter service, which was later determined to be insolvent. Following JetDirect's insolvency and its subsequent default on CML's loan, CML asserted derivative claims against the JetDirect's managers, arguing that they had breached their fiduciary duties to JetDirect by approving a number of imprudent acquisitions that lead to JetDirect's insolvency.
In denying CML standing to pursue a derivative claim against the managers of JetDirect, the court reasoned that the Delaware LLC Act limits such standing to holders of membership interests in an LLC and their assignees, and does not statutorily afford such standing to a company's creditors. In comparison, the Delaware General Corporation Law does not limit standing in a derivative suit against a corporation to stockholders only. The court justified its reading by noting the "contractarian spirit" at the heart of the Delaware LLC Act.
CML V, LLC v. Bax, C.A. No. 5373-VCL (Del. Ch. Nov. 3, 2010)