LRC Successfully Defends Atlantic Coast Dining-T.G.I. Friday’s franchise holder-in Court of Chancery
Landis Rath & Cobb, LLP successfully defended Atlantic Coast Dining, Inc., the general partner of a Delaware limited partnership that owns franchise rights for twenty-nine T.G.I. Friday’s restaurants along the Atlantic seaboard, and its individual directors in dismissing an action in the Court of Chancery. One of the limited partners filed a complaint asserting claims for reformation of the partnership agreement, breach of the implied covenant, breach of contract, and breach of fiduciary duty. In dismissing the amended complaint, and denying further leave to amend, Vice Chancellor Montgomery-Reeves agreed with the defendants that the claim for reformation was lacking as the plaintiff merely alleged that the plain language of the agreement was not what had been intended, but failed to allege what language should replace the purported mistake. The failure of the reformation claim mandated the dismissal of the implied covenant and breach of contract claims that depended on a finding that the plain language of the contract was not what had been intended by the sole signatory to the limited partnership agreement. Finally, the Court agreed that the facts as pled did not state a claim for breach of fiduciary duty because the director defendants had made adequate disclosures to the limited partners concerning an amendment to the limited partnership agreement. All claims were dismissed with prejudice.
The opinion received coverage in Delaware Law Weekly