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In LLC Stakeholder Claim Disputes, Pay Strict Attention to Agreement Terms and Possible Waivers
Disputes in restructuring matters often are adjudicated under state law. Given the increasing use of Delaware limited liability companies in private equity transactions, today we review a case involving a dispute between a private equity firm and physician minority equity holders in connection with the merger of a health care provider where the limited liability company agreement included broad waivers of the private equity firms’ fiduciary duties. In Khan v. Warburg Pincus, C.A. No. 2024-0523-LWW (Del. Ch. April 30, 2025), the Delaware Court of Chancery granted a motion to dismiss a complaint filed by two minority equity holders against the majority holder private equity firm and third party involved in the merger for failure to state claims for breach of the implied covenant of good faith and fair dealing, tortuous interference with contractual relations, and for unjust enrichment.
Minority Equity Holders’ Merger Consideration Subsequently Lost Value
According to the opinion, CityMD was a provider of urgent medical care in New York and New Jersey that was founded in 2010 by partner physicians. A private equity firm acquired a majority stake in the company in 2017. CityMD merged with Summit Medical Group two years later, resulting in a combined Delaware limited liability company named WP CityMD Topco LLC (the company). The private equity investors gained 60% ownership of the company through Class A units and the non-private equity investors held a 17% ownership position through Class B units.
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Bankruptcy Sales: Finding a Diamond In the Rough
There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.
Judge Rules Shaquille O'Neal Will Face Securities Lawsuit for Promotion, Sale of NFTs
A federal district court in Miami, FL, has ruled that former National Basketball Association star Shaquille O'Neal will have to face a lawsuit over his promotion of unregistered securities in the form of cryptocurrency tokens and that he was a "seller" of these unregistered securities.
Why So Many Great Lawyers Stink at Business Development and What Law Firms Are Doing About It
Why is it that those who are best skilled at advocating for others are ill-equipped at advocating for their own skills and what to do about it?
Blockchain Domains: New Developments for Brand Owners
Blockchain domain names offer decentralized alternatives to traditional DNS-based domain names, promising enhanced security, privacy and censorship resistance. However, these benefits come with significant challenges, particularly for brand owners seeking to protect their trademarks in these new digital spaces.
Coverage Issues Stemming from Dry Cleaner Contamination Suits
In recent years, there has been a growing number of dry cleaners claiming to be "organic," "green," or "eco-friendly." While that may be true with respect to some, many dry cleaners continue to use a cleaning method involving the use of a solvent called perchloroethylene, commonly known as perc. And, there seems to be an increasing number of lawsuits stemming from environmental problems associated with historic dry cleaning operations utilizing this chemical.