William Allen, Below v. Encore Energy Partners, L.p., Encore Energy Partners Gp LLC, Scott W. Smith, Richard A…

Summary

The Supreme Court of Delaware affirmed dismissal of a limited partner’s challenge to a merger between the partnership and the controller of its general partner. The court held that the partnership agreement replaced common-law fiduciary duties with a subjective contractual good-faith duty, and that allegations of ineffective negotiation, an inadequate exchange ratio, and reduced distributions did not support an inference of subjective bad faith or conscious disregard. Because the independent conflicts committee validly granted Special Approval, the merger was deemed not to breach the agreement.