December 11, 2025
Willkie secured the dismissal at the Delaware Supreme Court of a class action lawsuit against Warburg Pincus (WP) relating to its $8.9 billion sale of Summit Health-CityMD to VillageMD in 2023. The Delaware Supreme Court affirmed the Chancery Court’s judgment dismissing the shareholder lawsuit with prejudice.
On December 9, Chief Justice Collins J. Seitz, Jr. affirmed the Court of Chancery’s dismissal of the lawsuit brought by minority investors against WP and six WP investment funds. The rulings hold that the implied covenant of good faith and fair dealing has limited application and reinforce the authority of fiduciary duty waivers in limited liability company agreements.
Two minority unitholders of CityMD sued WP in April 2024 after their consideration from Walgreens-backed VillageMD’s acquisition of Summit Health-CityMD lost value. The complaint alleged that they were treated unfairly and coerced into voting for an amendment to CityMD’s limited liability company agreement that eliminated the minority members’ tag-along right to the same terms in the sale that WP received.
The Chancery Court, however, determined that the complaint was doomed because the limited liability agreement waived fiduciary duties owed by WP and allowed the private equity investor to act in its own interests in the transaction.
“[The plaintiffs’] arguments, however, improperly inject common law fiduciary duties into a contractual relationship that eliminated them,” the Chancery Court ruled. “Because the limited liability agreement leaves no room for a quasi-fiduciary theory disguised as an implied covenant claim, this case is dismissed.”
Willkie partner Sameer Advani argued the appeal in the Delaware Supreme Court and the motion to dismiss in the Court of Chancery. The team was also led by partners Tariq Mundiya, Vanessa Richardson and Richard Li, and included associates M. Annie Houghton-Larsen, Autumn Adams-Jack and Joanna Lamberta.
The case is Khan et al. v. Warburg Pincus LLC et al., case number 236, 2025, in the Supreme Court of the State of Delaware.
On December 9, Chief Justice Collins J. Seitz, Jr. affirmed the Court of Chancery’s dismissal of the lawsuit brought by minority investors against WP and six WP investment funds. The rulings hold that the implied covenant of good faith and fair dealing has limited application and reinforce the authority of fiduciary duty waivers in limited liability company agreements.
Two minority unitholders of CityMD sued WP in April 2024 after their consideration from Walgreens-backed VillageMD’s acquisition of Summit Health-CityMD lost value. The complaint alleged that they were treated unfairly and coerced into voting for an amendment to CityMD’s limited liability company agreement that eliminated the minority members’ tag-along right to the same terms in the sale that WP received.
The Chancery Court, however, determined that the complaint was doomed because the limited liability agreement waived fiduciary duties owed by WP and allowed the private equity investor to act in its own interests in the transaction.
“[The plaintiffs’] arguments, however, improperly inject common law fiduciary duties into a contractual relationship that eliminated them,” the Chancery Court ruled. “Because the limited liability agreement leaves no room for a quasi-fiduciary theory disguised as an implied covenant claim, this case is dismissed.”
Willkie partner Sameer Advani argued the appeal in the Delaware Supreme Court and the motion to dismiss in the Court of Chancery. The team was also led by partners Tariq Mundiya, Vanessa Richardson and Richard Li, and included associates M. Annie Houghton-Larsen, Autumn Adams-Jack and Joanna Lamberta.
The case is Khan et al. v. Warburg Pincus LLC et al., case number 236, 2025, in the Supreme Court of the State of Delaware.
