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Court Of Chancery Explains Interrelationship Of MLP Exculpation Clauses

Posted In LP Agreements

Morris v. Spectra Energy Partners (DE) GP, LP, C.A. 12110-VCG (June 27, 2017)

Master limited partnership agreements typically provide protection for the general partner who engages in a self-dealing transaction with the MLP. This decision reviews the existing precedent on how to apply those provisions, especially when a conclusive presumption of good faith is available to the GP. It also explains what language should be used to invoke at least the subjective standard of good faith that is most helpful to a GP using a conflicts committee. Hence, the decision is required reading for drafters of MLP agreements.