Document: Auriga Capital Corp. v. Gatz Properties, LLC, C.A. No. 4390-CS (Del. Ch. Jan. 27, 2012)
The Delaware Court of Chancery held that the manager and majority owner of a limited liability company (the “LLC”) breached his fiduciary duties by allowing the LLC’s most valuable asset to depreciate in value and then forcing the minority holders to sell their LLC interests to him for a fraction of their value. The Court also confirmed that absent a provision in the limited liability company agreement to the contrary, the managers of Delaware limited liability companies owe fiduciary duties of care and loyalty to the members of the limited liability company. In this case, the limited liability company did not alter the manager’s fiduciary duties, and the Court ordered the defendant manager and majority owner to pay the minority holders $776,515 in damages.