Richards Layton & Finger
 

Cargill, Incorporated v. JWH Special Circumstance LLC

November 18, 2008

For the first time since the enactment of the Delaware Statutory Trust Act more than 20 years ago, a Delaware court has addressed fiduciary duties in the context of a Delaware statutory trust. In Cargill, Incorporated v. JWH Special Circumstance LLC, C.A. No. 3234, Parsons, C. (Del. Ch. Nov. 7, 2008), the court held that a corporate parent that exercises dominion and control of a fiduciary of a statutory trust owes a duty of loyalty directly to the trust in certain circumstances absent provisions in the governing instrument to the contrary. In so doing, the court extended the holdings of a line of partnership cases, beginning with In re USACafes, L.P. Litigation, 600 A.2d 43 (Del. Ch. 1991), to statutory trusts.