Barbieri v. Swing-N-Slide Corp.
Delaware Court of Chancery
1997 Del. Ch. LEXIS 9 (Jan. 29, 1997)
Mueller and other officers (defendants) of Swing-N-Slide Corp. (SNS) formed an LLC, Greengrass Management, solely to make a tender offer for SNS, and Management then formed a general partnership, Greengrass Holdings, with a second LLC (Capital) made up of members unaffiliated with SNS. Holdings and SNS entered a two-step tender-offer agreement letting Holdings buy a majority stake in SNS, while Mueller remained SNS's president, CEO, and director throughout. Shareholder Barbieri (plaintiff) sued, adding Holdings and Management as defendants for breach of fiduciary duty and equitable fraud; Holdings and Management moved to dismiss.
Whether, under Delaware law, the fiduciary duties of a corporation's officers may be imputed to an LLC made up of those officers.