The Delaware Supreme Court upheld the dismissal of a claim for breach of fiduciary duty filed against the general partner of a limited partnership in connection with a merger transaction. The merger provided for a per-share payment to the common unitholders and a separate payment to the general partner for its incentive distribution rights. The incentive distribution rights entitled the general partner to receive certain distributions after distributions to the common unitholders exceeded certain levels. The merger was approved by a special committee of the limited partnership's independent directors after obtaining fairness opinion from a financial advisory firm.

The claimants unsuccessfully argued that the payment on account of the incentive distribution rights was excessive. The court ruled in favor of the general partner based on its review of the limited partnership agreement (the "LPA"). The court found that under the LPA, the general partner was required to consider only whether the merger as a whole was in the best interests of the limited partnership. The LPA did not require the general partner to assess separately whether the payment to be made on account of the incentive distribution rights was reasonable.

Norton v. K-Sea Transportation Partners LP, No. 238, 2012 (Del. Sup. Ct. May 28, 2013).