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Summaries and analysis of recent Delaware court decisions concerning business-related litigation.
Morris James Blogs
Court Of Chancery Upholds Discretion Not To Invest
For some reason probably rooted in human nature, parties to LLC agreements seem to think the agreement should provide that all the parties act "fairly" toward one another. Of course, each party then defines what is "fair" by what they want to get out of the deal. However, as this decision points out, when an agreement provides that a party has the discretion whether to advance additional funds or not, that is its choice to make. Whether the choice is "fair" or not is irrelevant and the other parties to the agreement have no basis to complain about that decision.