News & Analysis as of

Breach of Duty Covenant of Good Faith and Fair Dealing

Goulston & Storrs PC

Reminder To Draft Purchase And Sale Agreements With Care

Goulston & Storrs PC on

Somerville Off. Assocs. Ltd. P'ship v. Cresset Dev., LLC, 104 Mass. App. Ct. 1108 (2024). In Somerville Office Associates Limited Partnership v. Cresset Development, LLC, plaintiff Somerville Office Associates (“SOA”)...more

Winstead PC

Court Affirmed The Removal Of An Executor For Gross Mismanagement

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In Gordon v. Gordon, a couple created a revocable trust and named a friend, who provided financial advice, as successor trustee. No. 03-22-00454-CV, 2024 Tex. App. LEXIS 3611 (Tex. App.—Austin May 23, 2024, no pet. history)....more

Morris James LLP

Chancery Invokes the Implied Covenant to Invalidate Shareholder Rights Plan

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Whitestone REIT Operating Partnership L.P. v. Pillarstone Capital REIT, C.A. No. 2022-0607-LWW (Del. Ch. Jan. 25, 2024) - In Delaware, the implied covenant of good faith and fair dealing is inherent in all contracts and...more

King & Spalding

Kansas Federal Court Allows Developers’ Tort and Contract Claims to Proceed Against Bond Trustee

King & Spalding on

On September 13, 2023, the U.S. District Court for the District of Kansas granted in part and denied in part UMB Bank’s motion to dismiss counterclaims for tortious interference, breach of contract, and breach of the duty of...more

Goodwin

Second Circuit Rules that Syndicated Loans Are Not “Securities” Under State and Federal Law

Goodwin on

On August 24, 2023, the U.S. Court of Appeals for the Second Circuit in Kirschner unanimously  held that notes evidencing syndicated loans do not plausibly qualify as “securities” covered by state and federal securities laws...more

Robson & Robson, P.C.

The Hazards of 'Weaponizing' Capital Call and Dilution Provisions

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There are many ways that an owner of a closely-held business can use their superior financial resources to gain an advantage over their co-owners in a dispute. One common way is the use of a capital call provision to dilute...more

ArentFox Schiff

Claims Narrowed in Jack Nicklaus Non-Competition Case Over IP Sale

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On April 12, 2023, a Manhattan judge in the lawsuit regarding the sale of golf legend Jack Nicklaus’s intellectual property portfolio narrowed the claims against Nicklaus. In 2007, Nicklaus sold his intellectual property...more

McGuireWoods LLP

Notable Litigation – February 2023

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Notable litigation filed during February 2023 includes: (1) Tell v. Modica Microindustries, Inc. and (2) Pelham v. VBit Technologies Corp., et al....more

Farrell Fritz, P.C.

A Lesson In Drafting Capital Call Provisions

Farrell Fritz, P.C. on

Those of us who follow the Delaware Chancery Court’s output are regularly treated to lengthy, detailed, finely crafted opinions sometimes in excess of 100 pages. Opinions of that length from our New York state court judges...more

Smith Gambrell Russell

A Century Later: Implied Duty of Good Faith and Fair Dealing Still Going Strong

Smith Gambrell Russell on

Parties to construction contracts are often surprised to learn that they are bound to implied unwritten contract obligations in addition to the written terms of their contracts. Courts in the United States began to...more

Lewitt Hackman

Franchisee 101: Kentucky Fried Impact Study

Lewitt Hackman on

Zubair Kazi operated a KFC franchise in Pueblo, Colorado since the 1980s. In 2019, KFC approved another individual to open a KFC restaurant in Pueblo. Kazi sued, claiming KFC breached its implied duty of good faith and fair...more

Arnall Golden Gregory LLP

Lender Liability Is Not Dead: A Recent Case Presents a Warning for Lenders (and a Roadmap for Borrowers)

A recent decision from the U.S. Bankruptcy Court for the Northern District of Texas illustrates that aggressive lender action can lead to “lender liability” in a loan workout. Bailey Tool & Mfg. Co., et al. v. Republic Bus....more

Jaburg Wilk

An Inadequate Investigation Exposes Arizona Insurers to Bad Faith Only If the Insured Proves Additional Investigation Would Have...

Jaburg Wilk on

Plaintiffs often allege an insurer breached the duty of good faith and fair dealing by conducting an unreasonable and/or an inadequate investigation. But, Arizona courts have held for over 30 years that an insurer’s...more

Patton Sullivan Brodehl LLP

Conspiracy and Aiding & Abetting: Non-Manager Liability for Breach of LLC Fiduciary Duties

LLC managers owe fiduciary duties of loyalty, care, and good faith and fair dealing to both the LLC and the LLC’s members. (Corp Code §17704.09.)  One of the most common claims in LLC litigation is “breach of fiduciary duty”...more

Farrell Fritz, P.C.

Joint Venture Agreements: For Better or For Worse; In Profit or In Loss

Farrell Fritz, P.C. on

Just like a bride and groom vow to join together for better or for worse, commercial parties joining together through a joint venture must make a similar promise to share in profits and losses. ...more

Morris James LLP

Chancery Sustains Founders’ Implied Covenant Claim For “Bad Faith” Termination To Deprive Them Of Contingent Compensation,...

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Servaas v. Ford Smart Mobility LLC, C.A. No. 2020-0909-LWW (Del. Ch. Aug. 25, 2021) - Delaware common law requires that contracts be read on their own terms. Accordingly, contracts cannot be “combined” to supply missing...more

Littler

Ontario, Canada Court Awards Employee $25,000 in Moral/Aggravated Damages Because Employer Breached Duty of Good Faith and Fair...

Littler on

In Russell v. The Brick Warehouse LP, 2021 ONSC 4822 (The Brick Warehouse), on a motion for summary judgment in a wrongful dismissal action, the court awarded $25,000 in moral/aggravated damages because the employer breached...more

Farrell Fritz, P.C.

“Intentional” Breach of Fiduciary Duty Defeats Operating Agreement’s Exculpatory Clause

Farrell Fritz, P.C. on

Last week, Peter Mahler blogged about a recent decision holding that a minority shareholder’s claim against its majority co-owners for breach of fiduciary duty in connection with a sale of the business to a third party...more

Morris James LLP

Implied Covenant of Good Faith and Fair Dealing Saves Employee’s Claim for Improper Termination Under Company’s LLC Agreement

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Smith v. Scott, C.A. No. 2020-0263-JRS (Del. Ch. Apr. 23, 2021) - The Delaware LLC Act provides that fiduciary duties may be expanded or limited by the provisions of an LLC agreement. If the agreement is silent, then...more

Cadwalader, Wickersham & Taft LLP

Something Special, April 2021 | Issue No. 23 - Don’t Be Cruel: Appellate Division Upholds Waiver of Fiduciary Duties But Denies...

Can contracting parties waive all common law fiduciary duties? That was one of the questions presented to the New York Supreme Court, Appellate Division, First Department (the “Court”) in 111 West 57th Investment LLC, on...more

Patton Sullivan Brodehl LLP

LLC Managers or Members With “Sole Discretion” Must Still Act in Good Faith

LLC managers (or members vested with decision-making authority) are sometimes lulled into a false sense of security by “sole discretion” provisions in their LLC’s operating agreement.  That can be a costly mistake....more

Kramer Levin Naftalis & Frankel LLP

Kirschner v. JPMorgan Chase Holds that Syndicated Bank Loans Are Not Securities

On May 22, Judge Gardephe granted a motion to dismiss in Kirschner v. JPMorgan Chase Bank, N.A., a case that, among other things, considered whether the origination and distribution of a syndicated bank loan is subject to...more

Bowditch & Dewey

Lender Liability During COVID-19

Bowditch & Dewey on

During an interview with Bloomberg TV on March 6th, Lawrence Summers, former Secretary of the U.S. Treasury, observed: “Economic time has stopped but financial time has not stopped.” An incisive summary as any of the current...more

Sheppard Mullin Richter & Hampton LLP

Anti-Slapp Statute Does Not Apply To Allegations That Insurer Improperly Refused To Provide Cumis Counsel

Miller Marital Deduction Trust v. Zurich American Insurance Company, — P.3d –, 2019 WL 5304862; First Appellate District Court of Appeal, Division Three, Case No. A155398 (October 21, 2019). In Miller Marital Deduction...more

Bradley Arant Boult Cummings LLP

Government's Over-Inspection Sufficient to Support Breach of Duty of Good Faith and Fair Dealing - Construction and Procurement...

The Armed Services Board of Contract Appeals’ recent decision in Appeal of Watts Constructors, LLC gave life to a contractor’s claim that the government violated its implied duty of good faith and fair dealing. Under a...more

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