The presentation explored the increasing use of restrictive covenants in the governing documents of Delaware alternative entities and how courts are addressing their enforceability. Barnaby discussed key decisions, including Sunder Energy, Ainslie, and Seva, analyzing the intersection of contract law, restrictive covenants, and alternative entity structures.
There is a growing trend of parties inserting restrictive covenant provisions into alternative entity governing documents for business entities organized in Delaware. As a result, over the past year, Delaware courts have been confronted with the intersection of restrictive covenant, contract and alternative entity law.