Rating Agency Perspective on LLC Law

In a discussion on an email list that I started by talking about the update to my list of the differences between Delaware and New York LLC law, Daniel Rubock of Moody’s commented on the importance to Moody’s of the organization of a borrower in Delaware. With his permission I have reproduced his comment below  in full with only clarifying edits:

“A key difference cited is that Delaware permits the waiver of an independent manager’s fiduciary duty to the equityholders, whereas New York does not. In Moody’s view, this waiver is the lynchpin to sidestepping the “corporate family doctrine” that just about mandated the independent directors voting for bankruptcy in the General Growth Properties case in 2009. For securitized loans, the absence of such a waiver or uncertainty about its enforceability, whether in New York  or any other state of formation, is credit negative.”

Add a comment

Type the following characters: six, niner, november, november, november

* Indicates a required field.

Subscribe

Recent Posts

Contributors

Archives

Jump to Page

Necessary Cookies

Necessary cookies enable core functionality such as security, network management, and accessibility. You may disable these by changing your browser settings, but this may affect how the website functions.

Analytical Cookies

Analytical cookies help us improve our website by collecting and reporting information on its usage. We access and process information from these cookies at an aggregate level.