Section 18-802 of Delaware’s Limited Liability Act (“LLC Act”) provides a statutory basis for the Court of Chancery to dissolve a Delaware LLC. The statute, which confers standing upon an LLC member of manager, states that the Court of Chancery “may decree dissolution of a limited liability company whenever it is not reasonably practicable to
Dissolution
Chancery Approves Sale of TransPerfect Global, Inc.
By Fox Rothschild LLP on
Posted in Dissolution
The Delaware Court of Chancery recently approved a plan to sell TransPerfect Global, Inc. (“TransPerfect” or the “Company”) to co-owner Philip Shawe. In the Court’s most recent opinion issued earlier on February 15, 2018, In re TransPerfect Global, Inc., C.A. No. 9700-CB (Del. Ch. Feb. 15, 2018), Chancellor Bouchard approved a sale agreement that…
Chancery Grants Dissolution Under Section 18-802 of the LLC Act
By Fox Rothschild LLP on
Posted in Dissolution
In the recent decision of In re: GR Burgr, LLC; GR US Licensing, LP v. Rowen Seibel, C.A. No. 12825-VCS (Del. Ch. Aug. 25, 2017), Vice Chancellor Slights entered an order judicially dissolving a Delaware limited liability company under Section 18-802 of the Delaware LLC Act. This decision provides an excellent roadmap for parties…
You Can’t Pick Your Facts
By Beth B. Miller on
Clients can pick their own attorneys but they cannot pick their own facts. A recent case decided by Master Ayvazian highlights the difficulties that unfortunate facts can present.
Creditors have eight months to file a claim against an estate (see 12 Del.C. §2102(a)). After a claim is presented, the executor (or personal administrator) can pay…
Creditor Lacks Standing to Bring Derivative Suit against LLC
By Fox Rothschild LLP on
Posted in Derivative Actions, Dissolution
The recent decision of Trusa v. Nepo, C.A. No. 12071-VCMR (Del. Ch. April 13, 2017), stands for the proposition that a creditor lacks standing to assert a derivative claim against a limited liability company. In Trusa, the plaintiff creditor Steven B. Trusa brought a derivative action for breach of fiduciary duty and dissolution…
Court Appoints Custodian to Deadlocked Corporation to Serve as 7th Director
By Fox Rothschild LLP on
Posted in Dissolution
In the recent decision of Kleinberg v. Aharon, C.A. No. 12719-VCL (Del. Ch. Feb. 3, 2017), the Court of Chancery appointed a custodian over a Delaware corporation under Section 226 of the Delaware General Corporation Law (“DGCL”) to break deadlock. A voting agreement allowed for 6 board seats, 3 of which were controlled by…
Personal Jurisdiction over LLC Manager Act Analyzed by Chancery
By Fox Rothschild LLP on
Posted in Case Summaries, Dissolution
In the recent decision of In the Matter of Dissolution of Artic Ease LLC, C.A. No. 8932-VCMR (Del. Ch. Dec. 9, 2016), the Court of Chancery analyzed whether an LLC member and certain affiliated entities were subject to the jurisdiction of Delaware under 6 Del. C. § 18-109, and ultimately dismissed third-party claims for…
High Standard for Court-Ordered Dissolution of a Solvent Delaware Corporation
By Fox Rothschild LLP on
Posted in Dissolution
Often times, shareholders may seek to dissolve a Delaware corporation and appoint a receiver for a variety of reasons, including the fact that the stockholders and/or management simply cannot “get along.”
Unfortunately for such stockholders, if the corporation is solvent (other than “joint venture” entities which are governed by Section 273), the Court will exercise…
Joint Venture Dissolution Under Section 273: Appropriate Remedies
By Fox Rothschild LLP on
Posted in Dissolution
If a petitioner is able to satisfy the three requirements set forth in Section 273 of the DGCL—namely (i) two 50/50 stockholders, (ii) engaged in a joint venture, and (iii) are unable to agree as to whether to discontinue the company—will the Court automatically grant dissolution of the entity?
The statute provides that the Court…
Section 273 Dissolution – Inability to Agree upon the Desirability of Discontinuing the Joint Venture
By Fox Rothschild LLP on
Posted in Dissolution
Under Section 273 of the DGCL, the third requirement under the statute is the inability of the two stockholders to agree upon the desirability of discontinuing the joint venture and disposing of its assets.
The meaning of this phrase was addressed in the case of In re Venture Advisers, Inc., 1988 Del. Ch. LEXIS…