ZS Obtains Favorable Connecticut Supreme Court Ruling in Corporate Governance Matter

Zabel Schellenberg is pleased to announce a significant appellate victory before the Connecticut Supreme Court in Clinton v. Aspinwall. Working closely with Garrett S. Flynn, Barbara M. Schellenberg represented the defendants in this complex corporate governance dispute involving the interpretation of a Delaware limited liability company operating agreement.

In its decision, the Supreme Court reversed the trial court’s judgment and remanded the case for a new trial. The Court agreed with the defendants’ position that the second sentence of the operating agreement’s duty of care provision was a classic exculpatory clause under Delaware law—limiting liability rather than imposing affirmative duties. The Court concluded that the trial court’s jury instructions improperly treated the exculpatory provision as creating contractual obligations and shifted the burden of proof to the defendants on issues that were elements of the plaintiff’s claim.

This ruling provides important clarification on the proper construction and application of exculpatory provisions in LLC operating agreements governed by Delaware law. It reinforces the principle that such provisions operate as limitations on liability only after a breach of an independent duty has been established.

We are proud to have helped secure this outcome for our clients. To read this decision, click here.