Drafting and Litigating LLC Operating Agreements: Fiduciary Duties and Liability Protections

Tyler Leavengood, Partner | Potter Anderson LLP

Tyler J. Leavengood is a Partner at Potter Anderson LLP and a member of the firm’s Corporate Litigation group, concentrating on complex corporate and commercial litigation in the Delaware Court of Chancery. He regularly represents corporations, directors, officers, and board committees in stockholder class and derivative actions, appraisal and dissolution proceedings, advancement and indemnification disputes, and books-and-records litigation. Tyler also advises boards and special committees on fiduciary duty matters and internal governance issues. His clients have included four of the ten largest Fortune 500 companies.

Education & Credentials

• Tyler earned his J.D., with distinction and high honors, from the University of Iowa College of Law, where he served as Managing Editor of the Journal of Corporation Law. He received his B.S., summa cum laude, from Texas A&M University. He is admitted to practice in Delaware and the United States District Court for the District of Delaware.

Recognition & Leadership

• Tyler has been recognized by The Best Lawyers in America® in Corporate Law and Commercial Litigation since 2022. He is a frequent speaker on fiduciary duty, board governance, privilege, and derivative litigation trends.

Professional Involvement

• He is a member of the Delaware State Bar Association and the American Bar Association. He has authored articles addressing disclosure obligations, stockholder inspection rights, and developments in corporate litigation.

Experience

• Tyler represents Fortune 500 companies, directors, officers, and board committees in high-stakes corporate governance litigation, with a particular focus on proceedings in the Delaware Court of Chancery. His practice includes stockholder class and derivative actions involving oversight, disclosure, and fiduciary duty claims, as well as appraisal and dissolution matters. He regularly handles advancement and indemnification disputes and books-and-records actions, where early procedural and strategic positioning can significantly influence the trajectory of a case.
• In addition to active litigation, Tyler advises boards and special committees on fiduciary obligations, governance structures, internal investigations, and litigation risk mitigation strategies. He represents clients not only in the Delaware Court of Chancery, but also in the Delaware Superior Court, the United States District Court for the District of Delaware, and other state and federal courts, providing coordinated guidance in complex, multi-forum disputes.

Michael Maxwell, Partner | Potter Anderson

Michael P. Maxwell is a Partner at Potter Anderson LLP advising clients on Delaware corporate and alternative entity law in complex transactions involving limited liability companies, partnerships, and corporations. His practice includes investment and private equity fund formations, joint ventures, mergers and acquisitions, restructurings, cross-border transactions, and structured finance matters. Mike also counsels boards, managers, and special committees on fiduciary duty, governance, and contractual interpretation issues, and provides Delaware legal opinions in connection with significant transactions.

Education & Credentials

• Mike earned his J.D. from Tulane Law School and his B.A. from the University of Louisville. He has been admitted to practice in Delaware since 2008.

Recognition & Leadership

• Mike has been recognized in The Best Lawyers in America® for Securitization and Structured Finance Law and Corporate Law since 2021. He serves on the bar association drafting committee responsible for the Delaware Limited Liability Company Act, the Delaware Revised Uniform Limited Partnership Act, and the Delaware Revised Partnership Act. He is also Executive Editor of Symonds & O’Toole on Delaware Limited Liability Companies.

Professional Involvement

• He is a member of the American Bar Association’s Business Law Section and the Delaware State Bar Association, and serves on the Delaware Board of Bar Examiners. Mike is also a Contributing Editor to Business Law Today and co-author of regular updates addressing amendments to Delaware corporate and alternative entity statutes and the Delaware Uniform Commercial Code.

Experience

• Michael advises private equity sponsors, hedge funds, and other investment vehicles on fund formation, governance, and complex structuring matters involving limited liability companies and other alternative entities. He frequently serves as Delaware counsel in high-value mergers, acquisitions, asset sales, restructurings, structured finance transactions, and cross-border matters, providing strategic guidance on entity design, statutory compliance, and transactional execution. He also renders Delaware legal opinions in connection with significant corporate and financing transactions.
• In addition, Michael represents lenders and borrowers in commercial financing, asset-based lending, and real estate mortgage transactions, and regularly counsels boards, managers, and special committees on fiduciary duty, governance, and contractual interpretation issues. His practice also includes advising clients on unclaimed property audits, voluntary disclosure programs, and related compliance matters, offering practical solutions to complex regulatory and statutory challenges.

Tammy L. Mercer, Member | Akerman LLP

Tammy L. Mercer is a Partner in the Litigation practice at Akerman LLP in Wilmington, Delaware, where she brings more than 19 years of experience advising boards of directors and private equity clients on complex corporate governance matters. She concentrates her practice in the Delaware Court of Chancery and Delaware Superior Court, handling high-stakes disputes involving mergers and acquisitions, going-private transactions, proxy contests, valuation and appraisal proceedings, and directors’ and officers’ liability. Tammy also has extensive experience with indemnification and advancement proceedings, stockholder demands for books and records, and governance disputes involving alternative entities including LLCs, limited partnerships, and master limited partnerships.

Education & Credentials

• Tammy earned her J.D., summa cum laude and Order of the Coif, from Villanova University School of Law, where she served as Associate Editor of the Villanova Law Review. She received her B.S., cum laude, from Kutztown University. She is admitted to practice in Delaware.

Recognition & Leadership

• Tammy has been ranked by Chambers USA in Delaware for Chancery since 2022 and listed by Lawdragon 500 as one of the Leading Litigators in America for Complex Business Litigation, with particular recognition in alternative entity matters, in 2023, 2024, and 2026. She has been recognized by Best Lawyers in Delaware for Corporate Governance Law and Corporate Law, and by Delaware Today as a Top Lawyer in Corporate Law.

Professional Involvement

• Tammy is a Fellow of the American Bar Foundation and the American College of Governance Counsel, and serves on the Advisory Board for the Weinberg Center for Corporate Governance at the University of Delaware. She chairs the Litigation Subcommittee of the ABA Business Law Section’s LLCs, Partnerships and Unincorporated Entities Litigation Committee, and is a member of the ABA’s Corporate Laws Committee and the Delaware State Bar Association’s Subcommittee on Alternative Entities. She is a frequent speaker at leading CLE programs including the ABA LLC Institute, the Practicing Law Institute, and the Ray Garret Jr. Corporate & Securities Law Institute, and has authored articles in the Delaware Law Review on alternative entity law developments.

Experience

• Tammy represents boards of directors, private equity sponsors, and alternative entity clients in high-stakes governance litigation before the Delaware Court of Chancery and Delaware Superior Court. Her practice encompasses fiduciary duty disputes, M&A and going-private litigation, proxy contests, appraisal and dissolution proceedings, and advancement and indemnification matters — areas where early strategic positioning significantly shapes case outcomes. She has particular depth in LLC and alternative entity governance disputes, including matters involving the modification and elimination of fiduciary duties, indemnification and exculpation provisions, and stockholder books-and-records demands.

Thomas E. Rutledge, Member | Stoll Keenon Odgen PLLC

Thomas E. Rutledge is a Member at Stoll Keenon Ogden PLLC in Louisville, Kentucky, where his practice focuses on the law of business organizations, with particular depth in limited liability companies, partnerships, and corporations. He counsels clients on entity formation, governance, and operating agreement design, and regularly advises and serves as an expert witness in disputes involving fiduciary duties, agency, and the application of organizational documents. His work spans both transactional structuring and litigation support, bringing to each engagement a rare combination of statutory drafting experience and practical dispute-resolution insight.

Education & Credentials

• Tom earned his J.D. from the University of Kentucky College of Law, where he served as a law review editor, his Graduate Fellow from the University of Notre Dame, and his B.A., cum laude, from Saint Louis University. He has been admitted to practice in Kentucky.

Recognition & Leadership

• Tom has been recognized in The Best Lawyers in America® across multiple categories — including Corporate Law, Mergers and Acquisitions Law, Corporate Governance Law, and Business Organizations — since 2006, and was named 2026 Business Organizations Lawyer of the Year in Louisville. He is rated AV® Preeminent™ by Martindale-Hubbell® and recognized by Chambers USA as a Leading Lawyer for Business in Corporate/M&A.

Professional Involvement

• Tom is an elected member of the American Law Institute and has served as Chair of the American Bar Association’s Committee on LLCs, Partnerships and Unincorporated Entities. He is a Uniform Law Commissioner and has been appointed by the ABA Section of Business Law as an advisor to numerous Uniform Law Commission drafting projects. He is the co-author of Ribstein and Keatinge on Limited Liability Companies and Keatinge and Conaway on Choice of Business Entity, and has contributed chapters to Kentucky Business and Commercial Law.

Experience

• Thomas is one of the country’s foremost authorities on the law of business organizations, with decades of experience advising clients on LLC operating agreements, governance structures, and entity design across jurisdictions. He has served as principal drafter of Kentucky’s LLC Act, Partnership Act, Limited Partnership Act, and Limited Cooperative Association Act, and has participated in the drafting of uniform acts at the national level — giving him unmatched insight into how statutory frameworks translate into real-world drafting and dispute outcomes.
• His transactional experience includes complex reorganizations, equity offerings, recapitalizations, and private equity transactions, as well as Series LLC structuring built on his work on the Uniform Protected Series Act. Most recently, Thomas has concentrated significant attention on the Corporate Transparency Act, advising clients on beneficial ownership reporting compliance.

I. Fiduciary Duties & Operating Agreement Primacy | 1:00pm – 2:00pm

This session examines the fiduciary duty provisions in LLC operating agreements that most frequently drive high-stakes disputes. It analyzes the default duties of loyalty, care, disclosure, and oversight, and explores how Delaware’s contractarian framework under §18-1101 permits modification or elimination of those duties through carefully drafted language. Particular attention is given to the enforceability of fiduciary waivers, the risks created by drafting ambiguity, and the role of the implied covenant of good faith and fair dealing as a judicial backstop when agreements are silent or imprecise.

Drawing on common governance flashpoints, including self-dealing transactions, minority-member conflicts, squeeze-outs, and removal battles, the session connects drafting choices to litigation outcomes. It addresses strategic considerations from both plaintiff and defense perspectives, offering practical insight into how fiduciary provisions shape exposure, pleading strategy, and judicial scrutiny. Designed for transactional attorneys and litigators nationwide, this module links drafting precision to courtroom consequences.

Break | 2:00pm – 2:10pm

II. Governance Design and Dispute Resilience in LLC Agreements: Delaware and RULLCA Drafting Considerations | 2:10pm – 2:40pm

Operating agreements serve as the primary instrument for allocating power, managing conflicts, and shaping dispute outcomes within closely held entities. This session focuses on the governance provisions and dispute-planning mechanisms that determine how LLC conflicts unfold in practice, comparing frameworks under Delaware, RULLCA, and other jurisdictions to identify the drafting strategies that improve clarity, reduce internal disputes, and strengthen enforceability across governing regimes. The discussion analyzes managerial authority structures and removal mechanisms, conflict-of-interest procedures and safe harbor frameworks, and staged deadlock and buy-sell solutions designed to prevent escalation and preserve enterprise stability.

Attention is also given to books-and-records rights as strategic pre-litigation tools and the careful design of forum selection and arbitration clauses in LLC disputes. By examining how these provisions operate differently depending on the applicable statutory framework, the session equips attorneys to draft governance structures that function as intended when challenged, allocate leverage effectively, and reduce the uncertainty that arises when agreements are silent or imprecise. Designed for transactional counsel and litigators advising LLCs across jurisdictions, this session connects governance design choices to their practical consequences in disputed proceedings.

III. Indemnification, Advancement, and Exculpation Architecture: Delaware and RULLCA Perspectives | 2:40pm – 3:10pm

This session examines how indemnification, advancement, and liability protections may be structured in LLC operating agreements and how those provisions function when disputes arise. It addresses the statutory foundations of indemnification and advancement rights, the critical alignment between fiduciary duty standards and indemnification rights, and the drafting considerations that govern enforceable exculpation and limitation-of-liability provisions. The discussion compares Delaware’s contractarian approach with RULLCA and other frameworks, highlighting the structural differences that practitioners must account for when advising LLCs across jurisdictions.

The session also focuses on how these provisions are tested in practice, with particular attention to advancement disputes and defense-cost litigation. By connecting statutory structure to drafting choices and litigation outcomes, this module equips attorneys with a practical framework for building liability protections that remain enforceable and internally consistent when challenged in court.