Delaware Court of Chancery Finds That “Blocking Rights” Exercised By Minority Investors May Amount to an “Actual Control” Position
By Scott E. Waxman and Frank J. Mazzucco
In Skye Mineral Investors, LLC and Clarity Copper, LLC v. DXS Capital (U.S.) Limited et al., C.A. No. 2018-0059-JRS (Del. Ch. Feb. 24, 2020), the Delaware Court of Chancery allowed claims to survive a motion to dismiss when such claims sufficiently pled that, by exercising certain “blocking rights,” minority members of an LLC achieved an actual control position over the LLC and, in bankrupting the LLC’s subsidiary in order to purchase its assets at a reduced price, breached their related fiduciary duties.
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