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Chancery Holds Defendant Breached Fiduciary Duties by Failing to Distribute Assets Equally During Dissolution of LLC

Mehra v. Teller, C.A. No. 2019-0812-KSJM (Del. Ch. Sept. 20, 2024) - In this post-trial decision, the plaintiffs claimed that one of the defendants breached his fiduciary duties by failing to distribute assets equally at...more

Chancery Says Litigation Privilege No Shield Against LLC Interest Repurchase

Seva Holdings Inc. v. Octo Platform Equity Holdings, LLC, C.A. No. 2022-0437-PWR (Del. Ch. Aug. 29, 2024) - In deciding limited cross motions for summary judgment, the Court of Chancery held that the absolute litigation...more

Chancery Orders Dissolution of Single Asset LLC

Gibson v. Konick, C.A. No. 2022-1036-LWW (Del. Ch. July 10, 2024) - The Court of Chancery dissolved a single asset LLC even though the LLC agreement required a unanimous vote of the members to dissolve, and one of the two...more

Chancery Enforces LLC Agreement in Prince Estate Dispute

McMillan v. Nelson, C.A. 2024-0016-KSJM (Del. Ch. July 5, 2024) - In a dispute over the management of Prince Legacy, LLC, an entity formed to manage assets from the estate of the late musician Prince, the Court of...more

Chancery Requires Bond in Connection With Status Quo Order

Leon v. Orlando, C.A. No. 2024-0311-LWW (Del. Ch. June 5, 2024) - In an action to determine the rightful manager of a Delaware limited liability company (“the Company”), the Court of Chancery required plaintiff to post a...more

Chancery Suggests Alternative Approach To Contracts Providing That Prohibited Acts Are Void Ab Initio

XRI Investment Holdings LLC v. Holifield, et al., C.A. No. 2021-0619-JTL (Del. Ch. Sept. 13, 2022) - Under precedents such as CompoSecure, L.L.C. v. CardUX, LLC (Del. 2018), acts defined by an LLC agreement as “void” or...more

Chancery Explains Pleading Standard and Sustains Unjust Enrichment Claim Related to Plaintiff’s Forfeiture of LLC Acquisition...

Angel v. Warrior Met Coal, Inc., C.A. No. 2019-0235-SG (Del. Ch. Jun. 30, 2021) - Under Delaware’s notice pleading standard, a plaintiff’s claim will survive a motion to dismiss if it is “reasonably conceivable” that the...more

Court of Chancery Stays Action for Violation of Rule against Claim Splitting Pending Resolution of a Duplicative Federal Action

Goureau v. Lemonis, C.A. No. 2020-0486-MTZ (Del. Ch. Mar. 30, 2021) Delaware follows the modern “transactional” view of claim splitting, which bars a plaintiff from bringing bring duplicative proceedings in different courts...more

Chancery Confirms that the Implied Covenant Imposes a “Good Faith” Component to an Agreement to Negotiate

DG BF, LLC v. Ray, C.A. No. 2020-0459-MTZ (Del. Ch. Mar. 1, 2021) - The Operating Agreement for an LLC involved in the cannabis industry provided for a five-member board of managers, with one Independent Manager appointed...more

Court of Chancery Harmonizes Operating Agreement Governance Provisions To Resolve LLC Control Dispute

Pearl City Elevator, Inc. v. Gieseke, C.A. No. 2020-0419-JRS (Del. Ch. Mar. 23, 2021) - Under Delaware law, limited liability company agreements are interpreted like other contracts; they are read as a whole in light of...more

Chancery Holds That a Deadlock Warranting Dissolution Can Be Genuine Even If the Circumstances Giving Rise to the Deadlock Were...

Mehra v. Teller, C.A. No. 2019-0812-KSJM (Del. Ch. Jan. 29, 2021) - In a dispute over the validity of the dissolution of a limited liability company, the Court of Chancery held in a post-trial opinion that a deadlock...more

Chancery Finds Company Responsible for Advancing Costs of Defense to Its CEO in a Claim Brought by the Company

International Rail Partners LLC v. American Rail Partners, LLC, C.A. No. 2020-0177-PAF (Del. Ch. Nov. 24, 2020) - The Delaware Limited Liability Company Act (the “LLC Act”) allows a limited liability company (“LLC”) to...more

Chancery Dismisses Complaint Challenging Dilution for Lack of Standing and Failure to State a Claim

Hindlin v Gottwald, C.A. No. 2019-0586-JRS (Del. Ch. July 22, 2020) - The plaintiff, a minority investor (“Plaintiff”) in a Delaware limited liability company, Core Nutrition, LLC (the “Company”), brought an action for...more

Court Finds LLC Manager Consent Statute Authorizes Personal Jurisdiction for Tort Claims Related to the Company, Not Just Alleged...

CLP Toxicology, Inc. v. Casla Bio Holdings LLC, C.A. 2018-0783-PRW (Del. Ch. Jun. 29, 2020) & NC18C-10-332 PRW CCLD (Del. Super. Jun. 29, 2020) - In both the corporation and LLC contexts, Delaware law employs consent...more

Chancery Defers to Liquidating Trustee in Approving a Sale of LLC Assets

Acela Invs. LLC v. DiFalco, C.A. No. 2018-0558-AGB (Del. Ch. Apr. 27, 2020). This case affirms that, absent an abuse of discretion, the Court of Chancery will defer to a sale agreement proffered and negotiated by a...more

Chancery Enforces LLC Agreement Arbitration Clause and Finds that Member’s Resignation Did Not Prevent Enforcement

360 Campaign Consulting, LLC v. Diversity Communication, LLC, C.A. No. 2019-0807-MTZ (Del. Ch. Mar. 20, 2020). Following a dispute between the two members of a Delaware LLC, Plaintiff filed an eleven (11) count complaint...more

Chancery Denies Non-Member, Non-Manager’s Bid for Equitable Dissolution of LLC

SolarReserve CSP Holdings, LLC v. Tonopah Solar Energy, LLC, C.A. 2019-0791-JRS (Del. Ch. Mar. 18, 2020). While the Court of Chancery has recognized the concept of equitable standing to seek judicial dissolution, this...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 Rejects Use of the Implied Covenant of Good Faith and Fair Dealing to Preserve LLC Members’ Exit Sale Rights

The implied covenant of good faith and fair dealing inheres in all contracts governed by Delaware law. In some circumstances, the implied covenant may apply to fill “gaps” in an agreement consistent with the parties’...more

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