DealLawyers.com Blog

In two brief, two-page orders this week and last, the Delaware Supreme Court affirmed earlier Chancery Court opinions that we shared when they were issued.

– In Faiz Kahn v. Warburg Pincus, LLC (Del.; 12/25), the Delaware Supreme Court affirmed Chancery’s April 2025 dismissal of claims by minority LLC members that an amendment to an LLC agreement eliminating the minority members’ tag-along right to participate in transactions on the same terms as the LLC’s PE-affiliated majority investors (after the PE affiliates negotiated disparate consideration for themselves in the merger) breached the implied covenant of good faith and fair dealing. Vice Chancellor Will found that the implied covenant is a limited remedy that only applies when the contract does not address the conduct at issue, making the first step in an implied covenant assessment to determine whether the contract has a gap. She found the LLC Agreement explicitly addressed the requirements to amend the tag-along right, which left no gap for the implied covenant to fill.

– In Krevlin v. Ares Corporate Opportunities Fund (Del.; 12/25), the Court affirmed Chancery’s February 2025 opinion declining to infer liquidity-based conflicts arising from the lifecycle of a private equity fund.

– Meredith Ervine