In the October 2015 issue of Business Law Today, an article authored by Jason C. Jowers and Meghan A. Adams examines the increasing role of equity in LLC litigation. Both the case law and an amendment to the Delaware LLC Act in recent years demonstrate Delaware's rejection of a solely contractarian view of LLCs. The recent Delaware Court of Chancery decision of In re Carlisle Etcetera LLC provides new lessons on the subject of equity's reach. Although the length of equity's powerful arm into the area of LLC litigation may surprise some practitioners, there is a consistent theme in the case law that may provide comfort: the Court of Chancery normally will only exercise its equitable powers when the parties have left gaps in their operating agreement.
This article was originally published in the American Bar Association Business Law Section's "Business Law Today."