Del. Court Rules Against LLC Parties With `Unclean Hands’

A father and son whose misrepresentations led to the formation of two limited liability companies can’t enforce fiduciary duties that were created partly through the lies, a Delaware state judge ruled July 31.

The decision provides guidance on how the Delaware Chancery Court approaches plaintiffs with “unclean hands,” and fiduciary duties connected with an LLC (McKenna v. Singer, 2017 BL 265007, Del. Ch., No. 11371-VCMR, 7/31/17).

The Singer family owned and operated an energy distribution business in New York. The family formed two LLCs with Thomas McKenna and his son Garrett to capitalize on a business opportunity to ...