3/9/22 - Insights
Case law involving limited liability companies (LLCs) is rapidly evolving. Some states, most notably Delaware, permit LLCs to limit or eliminate liability for breaches of fiduciary duty by an LLC’s members or managers. Other states cabin that ability to varying degrees. Disputes regarding breaches of fiduciary duty can often hinge on the scope of any relevant exculpation provisions in the LLC agreement, and the body of law governing the LLC agreement can materially alter outcomes. Individuals seeking to do business in Texas are likely to encounter LLCs that were organized in Delaware (popular for, among other things, this very reason) and in Texas. In this article, managing partner Andy Hicks and associates Bryan Zubay and James Keefe compare key differences between Delaware and Texas law on LLC exculpation provisions.
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