Chancery Denies Motion for Expedited Proceedings to Enjoin Transaction and Upholds Agreement Waiving Fiduciary Duties
In Re K-Sea Transportation Partners, L.P. Unit Holders Litigation, C.A. No. 6301-VCP (Del. Ch. June 10. 2011), read opinion here. This 22-page decision (relatively short for many Chancery decisions), is a useful reference for Chancery practitioners to have in their “toolbox” for its careful treatment of, among other issues:
(i) the standard that the Court of Chancery will use for deciding a motion to expedite proceedings, and
(ii) what language in a limited partnership agreement will be read by the Court to be an effective waiver of traditional fiduciary duties, as allowed by the Delaware LP statute.
Also, the Court cites to a somewhat recent decision that also denied a motion for expedited proceedings to enjoin a merger of a limited partnership in the Londergan case highlighted on these pages here. The Delaware Court of Chancery is well-known for, among other things, providing very expedited proceedings in appropriate cases, even if a TRO is not sought. See generally recently adopted procedures highlighted here, that would allow for a final hearing in complex cases within 90 days of a complaint being filed. See Del. Ct. Ch. R. 97(c). This is perhaps not as fast as the jet in the nearby photo, but it is supersonic speed for any judicial system.
For a quotable discussion of language from an agreement that the Court interpreted to “eliminate traditional fiduciary duties” so long as the parties followed the procedure called for in the agreement, refer to page 17 of the slip opinion at the link above.