Court of Chancery Finds that MLP Breached Partnership Agreement by Unfairly Issuing Securities

In In re Energy Transfer Equity L.P. Unitholder Litigation, the Court of Chancery of the State of Delaware concluded that a private offering of securities by Energy Transfer Equity, L.P. (ETE) breached its limited partnership agreement (LPA). The court considered, among other issues, the meaning of the term “distribution” in the LPA and considered which party would bear the burden of proving that a conflicted transaction was fair or unfair if the alternative entity governing document imports an “entire fairness” equivalent for review of conflicted transactions.

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Tarik J. Haskins, “Court of Chancery Finds that MLP Breached Partnership Agreement by Unfairly Issuing Securities,” Month-In-Brief: Corporations, LLCs & Partnerships, ABA Business Law Today (July 2018).