Is Your Written-Consent Requirement an Impenetrable Shield?

Think your operating agreement's written-consent requirement is an impenetrable shield?

It isn't.

Last month, the Delaware Court of Chancery decided In re Priority Responsible Funding LLC — a sprawling post-trial decision involving a deadlocked 50/50 LLC in the litigation finance space, claims of fiduciary breach, breach of contract, tortious interference, and ultimately a judicial dissolution under 6 Del. C. § 18-802.

One issue stood out for me.

The two co-managing members had to "act by unanimous vote" — through written action or written consents. The agreement itself could only be amended by "a written instrument signed by all of the Members."

One member sued and argued: the company's pivot from a direct litigation funder into an origination-and-servicing shop for the other side's affiliated hedge funds materially changed the business — and was never papered by a unanimous written consent. So, he argued, the entire restructuring was unauthorized.

The court didn't bite. It didn't even need to decide whether the documents the member had signed — assignment contracts, services agreements, a pledge agreement — qualified as proper written consents.

Here's why.

As a signatory to the LLC agreement, the suing member knew his rights under the written-consent provision. He signed the assignment contracts and the services agreements on the company's behalf.

And then, for years, he actively helped facilitate the very transition he now challenged:

→ Creating written materials to attract investors to the new fund structure → Participating in weekly meetings to discuss the new fundings → Helping originate fundings for the new funds over the course of years

He never raised the written-consent provision once — until his falling-out with his partner.

The court applied the equitable doctrine of acquiescence — recognized not just in Delaware but across U.S. jurisdictions, including New York — and held that a party who knows its rights, watches the "unauthorized" conduct unfold, participates in it for years, and only objects after a falling-out is "complicit in the very breach for which [it] seeks damages."

The takeaway:

A written-consent requirement is not a dormant weapon you can wake up years later when a relationship sours. And it isn't just silence that costs you the right to invoke it — it's behavior. If you spend years signing the side documents, helping execute the unauthorized strategy, and drawing your salary off the new business model, a court is going to read that as approval. Because it is.

If something is happening at your company that you believe requires a written consent and didn't get one, you raise it then — and you stop participating in the conduct you're calling unauthorized. Not three years later, when you want out and you need a theory.

See the court decision here: https://law.justia.com/cases/delaware/court-of-chancery/2026/c-a-no-2024-0651-nac.html

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