Gerber v. Enterprise Products Holdings, LLC; When a Contractual Presumption of Good Faith Isn't Good Enough
Under Section 17-1101(d) of the Delaware Revised Uniform Limited Partnership Act, a limited partnership agreement may expand, restrict, or eliminate any duty (including fiduciary duties) a partner or other person may owe to the limited partnership or its partners, provided that the limited partnership agreement may not eliminate the implied contractual covenant of good faith and fair dealing. In a recent decision, the Delaware Supreme Court held that even when a defendant is conclusively presumed by the terms of a limited partnership agreement to have acted in good faith, a plaintiff nonetheless still could plead that the defendant breached the implied covenant of good faith and fair dealing, reversing a decision of the Delaware Court of Chancery.
The article was published in the September 2013 issue of The LLC & Partnership Reporter: The Newsletter of the Committee on LLCs, Partnerships and Unincorporated Entities (ABA Section of Business Law).