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Delaware Supreme Court Reaffirms MLPs Freedom to Contract Out of Fiduciary Duties

July 31, 2013

By GISLAR DONNENBERG, JIMMY VALLEE, GREG NELSON & KIM HICKS

In the latest in a series of fiduciary duty cases challenging the contractual "Special Approval" process provided in the limited partnership agreements of master limited partnerships (MLPs), the Delaware Supreme Court recently affirmed that limited partnerships may eliminate fiduciary duties in their partnership agreements, with the exception of the implied contractual covenant of good faith and fair dealing, which may not be eliminated.

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Image: Greg Nelson
Greg Nelson
Partner, Tax Department