Delaware Alternative Entities: The Benefits and Burdens of Contractual Flexibility
Probate & Property Magazine: January/February 2009, Vol. 23, No. 1
By Norman M. Powell
Norman M. Powell is a partner in the Wilmington, Delaware, law firm of Young Conaway Stargatt & Taylor, LLP.
Real estate lawyers are expected to be conversant, if not expert, in a great many areas of law. These include zoning and land use, secured transactions, debtor-creditor, general commercial law and contracts, corporate and alternative entity law, and third-party legal opinions. Increasingly, lenders, rating agencies, and others involved in credit markets require that certain types of real estate assets be held in Delaware limited liability companies (Delaware LLCs) or, on occasion, Delaware statutory trusts (DSTs) with specific attributes. Many issues presented by the formation and use of such entities are governed, to a significant extent, by contractual terms crafted for inclusion in the entity’s governing instrument, which may supplement or even supersede statutory provisions.