Emerging Views®


Restrictive Covenants: Potential Impact on Private Equity Acquisitions of Statutory Limitations

As state legislatures in a growing number of states have adopted or are considering adopting legislation with respect to restrictive covenants, a private equity sponsor and its counsel considering a portfolio acquisition need to assess the potential impact of statutory limitations on restrictive covenants. This article discusses the statutory landscape in the U.S. and identifies some of the questions that should be addressed in any analysis of the enforceability of restrictive covenants in the context of a private equity acquisition.

The Liability of Directors and Officers of a Delaware Limited Liability Company

A limited liability company has historically been considered an attractive structure for an entity based upon its flexibility in organizational structure (like a corporation or partnership), its taxation as a pass-through entity (like a partnership) and the owners' limited liability for actions and debts of the company (like a corporation). Based on two recent Delaware court decisions, there are now more reasons to favor LLCs.

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