Document: Kahn v. Portnoy, C.A. No. 3515-CC, Chandler, C. (Del. Ch. Dec. 11, 2008)

Plaintiff brought suit against the directors of an LLC for breach of fiduciary duty where the LLC’s operating agreement explicitly imported the fiduciary duty principles of Delaware corporate law, but modified them with respect to certain transactions.  As the LLC agreement’s language inadequately defined the parameters of the contractual fiduciary duties at issue, the Court of Chancery denied the defendant directors’ motion to dismiss because the fiduciary duties were ambiguously defined and the Court could not choose between reasonable interpretations of ambiguous contractual provisions.  Plaintiff’s allegations of bad faith were sufficient to survive motion to dismiss.