Before the Merger, Encore was a publicly traded Delaware limited partnership that acquired, developed, and exploited onshore oil and natural gas fields in the United States. This dispute stems from the unit-for-unit exchange (the Merger) by which Vanguard Natural Resources, LLC (Vanguard) acquired the outstanding limited partnership units of Encore Energy Partners LP (Encore or the Partnership). We conclude that the plaintiff's allegations that the independent directors failed to negotiate effectively do not permit a reasonable inference that the independent directors breached their duty to act with subjective good faith, and therefore we AFFIRM the Court of Chancery's dismissal of the complaint. The limited partnership agreement replaces common law fiduciary duties with a contractually adopted fiduciary duty of subjective good faith and deems this contractual duty to be satisfied if a committee of independent directors grants "Special Approval" to a transaction, so long as the independent directors themselves act with subjective good faith. The plaintiff limited partner's complaint alleges that the general partner, its controller, and its directors took actions during and preceding the merger negotiations that breached the contractual duties the limited partnership agreement imposed. This is an appeal from the Court of Chancery's dismissal of a class action complaint challenging the merger of a limited partnership with its general partner's controller. Clifford Gunter III and Jonathan Sandlin, Bracewell & Giuliani LLP, Houston, Texas for appellees.īefore STEELE, Chief Justice, HOLLAND, BERGER, JACOBS and RIDGELY, Justices constituting the Court en Banc. Brandon, Vinson & Elkins LLP, Dallas, Texas Ronald L. Burns, Richards Layton & Finger, P.A., Wilmington, Delaware for appellees, David Baggett, John E. Bradley, Young Conaway Stargatt & Taylor LLP, Wilmington, Delaware for appellees Vanguard Natural Resources, LLC, Encore Energy Partners LP, Encore Energy Partners GP LLC, Scott W. Wohl (argued), Wohl & Fruchter LLP, New York, New York for appellant.
Keener, Rosenthal, Monhait & Goddess, P.A., Wilmington, Delaware.
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