During the past year, a fascinating and important dispute has arisen among the Delaware judiciary over the duties owed by managers of funds, including hedge funds, organized as limited partnerships (LPs) or limited liability companies (LLCs) (together, LPs and LLCs are often called “alternative entities”). Some Delaware judges hold the view that traditional fiduciary obligations exist, while others believe that they do not, and that the parties’ duties can be defined solely by contract. The debate has spilled over from judicial decisions to the pages of the New York Times. And make no mistake, this is an issue with immense “real-world” consequences. Alternative entities represent a significant business, and that business has been growing over time. To help investors understand the scope of fiduciary obligations owed by hedge fund managers to their funds and investors, this article – the first in a two-part series – summarizes the development of fiduciary duty law with respect to private investment funds organized as LPs or LLCs in Delaware, as well as issues concerning waiver of fiduciary duties by contract. The second installment will discuss examples of successful and unsuccessful claims brought against fiduciaries in the LP and LLC contexts, focusing on three theories of liability: breach of fiduciary duties, breach of contract and breach of the implied covenant of good faith and fair dealing. The authors of this series are Jay W. Eisenhofer and Caitlin M. Moyna, managing director and associate, respectively, at Grant & Eisenhofer P.A.