The Delaware Court of Chancery has often held that managers of a Delaware limited liability company are subject to “default” fiduciary duties. The issue of default fiduciary duties was squarely presented to the Court of Chancery in Feeley v. NHAOCG, LLC. In denying a motion to dismiss a counterclaim that one of the plaintiffs, through various actions, breached default fiduciary duties it owed as managing member of a Delaware LLC (and which were not imposed by the operating agreement), the Court once again held that managers (or managing members) of a Delaware LLC owe default fiduciary duties to members of the company in the absence of express language to the contrary in the operating agreement. In coming to this conclusion, the Court drew a comparison between managers and managing members of LLCs, on the one hand, and general partners of limited partnerships, on the other hand. The Court noted that default fiduciary duties apply to general partners under Delaware law, and that, in light of similarities between both the statutes governing LPs and LLCs and the respective roles of LP general partners and LLC managers, it follows that such fiduciary duties should also apply to managers of LLCs.
Feeley v. NHAOCG, LLC C.A. No. 7304-VCL, 2012 WL 6840577 (Del. Ch. Nov. 28, 2012)