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Chancery Finds Merger Validly Amended LLC Agreement and Effectively Removed the LLC’s Manager

Campus Eye Management Holdings LLC v. DiDonato, C.A. No. 2024-0121-LWW (Del. Ch. Aug. 30, 2024) - This case arose out of a dispute between an optometrist who sold a majority stake in his company to a private equity buyer,...more

Chancery Determines LLC Agreement Required Payment to Remove Manager

Soleimani v. Hakkak, C.A. No. 2023-0948-LWW (Del. Ch. Apr. 12, 2024) - The defendants attempted to remove a manager-employee of several limited liability companies. The manager filed suit, and the parties moved for summary...more

Chancery Addresses Pleading-Stage Arguments for Dismissal in LLC Dispute

Principal Growth Strategies LLC v. AGH Parent LLC, C.A. 2019-0431-JTL (Del. Ch. January 25, 2023) - This decision provides helpful guidance to practitioners to address pleading-stage arguments for dismissal. The plaintiff...more

Chancery Finds Amendment to LLC Agreement Invalid for Want of Manager’s Involvement

DiDonato v. Campus Eye Management, LLC, C.A. No. 2023-0671-LWW (Del. Ch. Jan. 31, 2024) - In governance disputes among LLC constituencies, the operating agreement is the beginning and often end point. This action involved...more

Chancery Orders LLC’s Dissolution as Sanction

Kaufman v. DNARx LLC, C.A. No. 2022-0968-KSJM; C.A. No. 2022-0982-KSJM (Del. Ch. Dec. 29, 2023) (ORDER) - The Court of Chancery has broad power to address litigation misconduct....more

Chancery Upholds Claims Against LLC Officers and Others Arising from Squeeze-Out of Minority Unitholders

Cygnus Opportunity Fund, LLC v. Washington Prime Group, LLC, C.A. No. 2022-0718-JTL (Del. Ch. Aug. 9, 2023) - An Indiana corporation reorganized via bankruptcy into a Delaware LLC, and a senior note holder negotiated for...more

Chancery Finds Member Breached LLC Agreement in Unilaterally Dissolving the Company

VH5 Capital, LLC v. Jeremiah Rabe, C.A. No. 2020-0315-NAC (Del. Ch. June 30, 2023) - The at-issue LLC had two members – the defendant and the plaintiff, both of whom also constituted the company's board. The company never...more

Chancery Requires Fuller Disclosure for Receiver Appointment

In re VBR Agency LLC, C.A. No. 2022-0328-JTL (Del. Ch. Apr. 20, 2022) - Petitioners often call upon the Court of Chancery to appoint receivers to settle a company’s business. As this decision describes, “[i]n recent years,...more

Chancery Explains Standards of Review for Receiver Determinations and Shifts Fees and Expenses in Dissolution

In re Dissolution of Jeffco Management, LLC, C.A. No. 2018-0027-PAF (Del. Ch. Aug. 16, 2021) - When the Court of Chancery appoints a receiver to effectuate a company’s dissolution, certain determinations are subject to de...more

Chancery Addresses Whether LLC Agreement Modified or Eliminated Fiduciary Duties

In Re Cadira Group Holdings, LLC Litigation, Consolidated C.A. No. 2018-0616-JRS (Del. Ch. July 12, 2021) - The Delaware Limited Liability Company Act provides that “the fiduciary duties of a member, manager, or other...more

Chancery Addresses Claims Arising Out of LLC Dispute Involving Parallel Venture

Largo Legacy Group, LLC v. Evens Charles, C.A. No. 2020-0105-MTZ (Del. Ch. June 30, 2021) - In this LLC dispute, an investor in a hotel development company alleged that the company principals breached the operating...more

Implied Covenant of Good Faith and Fair Dealing Saves Employee’s Claim for Improper Termination Under Company’s LLC Agreement

Smith v. Scott, C.A. No. 2020-0263-JRS (Del. Ch. Apr. 23, 2021) - The Delaware LLC Act provides that fiduciary duties may be expanded or limited by the provisions of an LLC agreement. If the agreement is silent, then...more

Chancery Finds Implied-in-Fact LLC Agreement

Robinson v. Darbeau, C.A. No: 2019-0853-KSJM (Del. Ch. Mar. 1, 2021) - As Robinson v. Darbeau demonstrates, Delaware law recognizes implied limited liability company agreements. Plaintiff operated a daycare as a sole...more

Superior Court Applies Affiliate Privilege Doctrine To Dismiss Tortious Interference Claim Against Controller, While Sustaining...

Surf’s Up Legacy Partners, LLC v. Virgin Fest, LLC, C.A. No. N19C-11-092 PRW CCLD (Del. Super. Jan. 13, 2021) - In adjudicating a dispute over a scuttled deal in the music festival industry, the Delaware Superior Court...more

Chancery Addresses Statutes of Limitations Issues Arising Out Employment-Related Claims

Weik, Nitsche & Dougherty, LLC, v. Pratcher, C.A. No. 2018-0803-MTZ (Del. Ch. Aug. 26, 2020) - Following an employment dispute between former employers and employees of a Delaware limited liability company, the employers...more

Chancery Determines Validity of LLC Ownership Following Fraud and Deceit in Cross-Border Control Dispute

Lynch v. Gonzalez, C.A. No. 2019-0356-MTZ (Del. Ch. July 31, 2020) - Disputes over control of a Delaware limited liability company can turn on rigorous fact-finding efforts by the Court of Chancery where issues of witness...more

Chancery Interprets Right of First Refusal Provision in LLC Agreement

HUMC Holdco, LLC, et al. v. MPT of Hoboken TRS, LLC, et al., C.A. No. 2019-0972-KSJM (Del. Ch. July 2, 2020) Litigation arose among members of a limited liability company regarding the operating agreement’s right of first...more

Chancery Finds Unauthorized Transfer of LLC Interest Void and Denies Transferee Inspection Rights

Absalom Absalom Trust v. Saint Gervais LLC, C.A. No. 2018-0452-TMR (Del. Ch. June 27, 2019). Plaintiff was assigned a membership interest in the defendant, a Delaware limited liability company, and sought to exercise books...more

Chancery Orders Dissolution of Pharmaceutical LLC

Acela Investments LLC v. DiFalco, C.A. No. 2018-0558-AGB (Del. Ch. May 17, 2019). Because LLCs are “creatures of contract” and the policy of the Delaware Limited Liability Company Act is to give maximum effect to the...more

Chancery Enforces LLC Agreement’s California Forum Selection Clause For Advancement Claim

Li v. LoanDepot.com, LLC, C.A. No. 2019-0026-JTL (Del. Ch. Apr. 24, 2019). Delaware law permits parties conducting their business as limited liability companies to include mandatory arbitration or forum selection clauses...more

Chancery Declines to Find Personal Jurisdiction Over LLC Officers

CelestialRX Investments, LLC v. Krivulka, C.A. No. 11733-VCG (Del. Ch. Mar. 27, 2019). Section 109 of the Delaware Limited Liability Company Act is an “implied consent” statute. It provides for personal jurisdiction in...more

Court of Chancery Explains When to Dissolve an LLC

Decco U.S. Post-Harvest Inc. v. Mirtech Inc., C.A. No. 2018-0100-JTL (Del. Ch. Nov. 28, 2018) - Under Section 18-802 of the Delaware LLC Act, the Court of Chancery may dissolve an LLC when it is “not reasonably practical”...more

Court of Chancery Awards Fair Value to Forced-Out LLC Member

Domain Associates LLC v. Shah, C.A. No. 12921-VCL (Del. Ch. Aug. 13, 2018) - An LLC agreement may provide what payout a departing member receives for his or her interest. It also may provide that a member may be forced to...more

Court of Chancery Holds That Notice and an Opportunity To Be Heard Are Not Prerequisites to Dismissing an LLC Manager “For Cause”

A&J Capital, Inc. v. Law Office of Krug, C.A. No. 22018-0240-JRS (Del. Ch. July 18, 2018) - This decision holds that, absent contrary language in an LLC operating agreement, members do not need to provide notice and an...more

Court Of Chancery Applies LLC Contractual Fiduciary Duty

MHS Capital LLC v. Goggin, C.A. No. 2017-0449-SG (May 10, 2018) - Alternative entity agreements may eliminate common law fiduciary duties and often do, supplanting them with contractual fiduciary duties....more

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