Tuesday, April 8, 2008
Last Friday, Chancellor Chandler issued a ruling from the bench deciding TravelCenters v. Brog. The case was most notable for involving a notice by-law in a publicly traded LLC. In the ruling he stated:
limited liability companies are creatures of contract. They are entities governed strictly by the language set forth in their LLC agreements. It's that language that will in large part govern and control my decision today.
For those who read tea leaves this may be an indiciation that Chandler, at least, thinks that the doctrine of Delaware applying to proxy disputes and the shareholder vote (Blasius, Schnell, etc.) may not apply in the LLC paradigm. For those who want more color here is the complaint, and I am sure that this will fit in well with the able work of Larry Ribstein.
The day earlier Chancellor Chandler issued a brief order opinion allowing the expert testimony of the esteemed Professor Randall Thomas on federal securities law issues but not on Delaware law. Chandler also permitted testimony on the issue of materiality since it is a mixed fact and law question. As you may all remember Chandler has been a bit hard on the academy in permitting expert testimony, so this at least gives his thinking on where he will permit it (Bainbridge has previously had some good thoughts on this).