By Jon Ballis and Daniel Wolf, Kirkland & Ellis LLP ( May 12, 2017, 10:56 AM EDT) -- Many financial investors structure their investments in private companies in the form of preferred stock. This instrument provides the investor with a preference as to dividends and liquidation proceeds over other equity holders, typically management or legacy stockholders, who hold common stock. A recent Delaware case, ODN Holding, highlights some potential fiduciary duty complications when enforcing those preferences in the context of an investment that has gone sideways or negative (i.e., when the portfolio company has limited funds available to satisfy those preferences — whether the payment of preferential dividends, the redemption of the preferred, or the distribution of substantially all sale proceeds to the preferred)....