The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu The leading online blog in the fields of corporate governance and financial regulation. Sun, 17 May 2026 11:30:53 +0000 en-US hourly 1 https://wordpress.org/?v=6.5.8 https://corpgov.law.harvard.edu/wp-content/uploads/2024/02/cropped-photography-4-e1706898544564-1-32x32.png Delaware LLC Parties Cannot Bypass Fiduciary Waivers via Implied Covenant – The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu 32 32 Delaware LLC Parties Cannot Bypass Fiduciary Waivers via Implied Covenant https://corpgov.law.harvard.edu/2026/04/12/delaware-llc-parties-cannot-bypass-fiduciary-waivers-via-implied-covenant/?utm_source=rss&utm_medium=rss&utm_campaign=delaware-llc-parties-cannot-bypass-fiduciary-waivers-via-implied-covenant https://corpgov.law.harvard.edu/2026/04/12/delaware-llc-parties-cannot-bypass-fiduciary-waivers-via-implied-covenant/#respond Sun, 12 Apr 2026 11:30:18 +0000 https://corpgov.law.harvard.edu/?p=180148?d=20260413144200EDT Posted by Alex Kaplan and Katie Lutz, Sidley Austin LLP, on Sunday, April 12, 2026
Editor's Note:

Alex Kaplan is a Partner and Katie Lutz is a Law Clerk at Sidley Austin LLP. This post is based on their Sidley memorandum and is part of the Delaware law series; links to other posts in the series are available here.

On April 30, 2025, the Delaware Court of Chancery issued a memorandum opinion dismissing with prejudice a post-closing challenge to the VillageMD acquisition of CityMD. The Delaware Supreme Court later summarily affirmed.

The Delaware Court of Chancery found that where an LLC agreement (i) eliminates fiduciary duties, (ii) authorizes conflicted action/self-interest, and (iii) expressly addresses the challenged conduct through detailed governance and amendment provisions, plaintiffs cannot repackage fairness or disclosure theories as an implied covenant claim. Unlike Delaware corporations — where fiduciary duties are structural and cannot be eliminated by contract — Delaware LLCs and partnerships are built around freedom of contract, and courts will not “import” fiduciary-like obligations by implication when the parties have bargained them away.

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