Dieckman v. Regency General Partner LP

Regency's general partner (defendant) appointed a conflicts-committee member, Brannon, who sat on the board of an affiliate of the merger counterparty both before and immediately after his committee service, and the proxy statement sent to unaffiliated unit-holders for their merger vote never disclosed that conflict; even though the merger was approved through both of the partnership agreement's literal safe-harbor mechanisms (conflicts-committee approval and unaffiliated unit-holder approval), Dieckman (plaintiff), a unit-holder, sued claiming the general partner breached the implied covenant of good faith and fair dealing by failing to disclose Brannon's conflict, and the Court of Chancery dismissed on the theory the safe harbors displaced any implied disclosure duty.