Haley v. Talcott case brief summary
864 A.2d 86
SYNOPSIS: The manager member (P) sued defendants, the LLC and the investor member, for dissolution of the limited liability company under Delaware statute. The manager moved for summary judgment.
FACTS:
-The manager member and the investor member formed the LLC to own property upon which the manager member managed a restaurant that the investor member owned.
-The members each owned 50 percent of the LLC and gave a personal guaranty for the LLC's debt to a bank.
-After the members had a falling out, the manager member alleged that pursuant to Del. Code Ann. tit. 6, § 18-802 the court had to exercise its discretion and dissolve the LLC because it was not reasonably practicable for it to continue the business of the company in conformity with the LLC agreement.
-The investor member responded that the manager member was limited to a contractually-provided exit mechanism in the LLC agreement, by which he could buy out the manager member.
HOLDING:
-The court stated that it was not reasonable for the LLC to continue to carry on business in conformity with the agreement of the LLC.
ANALYSIS:
-Furthermore, the exit mechanism was not a reasonable alternative.
-It was not sufficient to provide an adequate remedy to the manager member under the circumstances, as the manager would be personally liable for the debt of the LLC.
-Therefore, the manager member was entitled to a judicial dissolution of the LLC.
CONCLUSION:
The motion for summary judgment was granted.
The parties were directed to confer and, within four weeks, they were to submit a plan for the LLC's dissolution.
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864 A.2d 86
SYNOPSIS: The manager member (P) sued defendants, the LLC and the investor member, for dissolution of the limited liability company under Delaware statute. The manager moved for summary judgment.
FACTS:
-The manager member and the investor member formed the LLC to own property upon which the manager member managed a restaurant that the investor member owned.
-The members each owned 50 percent of the LLC and gave a personal guaranty for the LLC's debt to a bank.
-After the members had a falling out, the manager member alleged that pursuant to Del. Code Ann. tit. 6, § 18-802 the court had to exercise its discretion and dissolve the LLC because it was not reasonably practicable for it to continue the business of the company in conformity with the LLC agreement.
-The investor member responded that the manager member was limited to a contractually-provided exit mechanism in the LLC agreement, by which he could buy out the manager member.
HOLDING:
-The court stated that it was not reasonable for the LLC to continue to carry on business in conformity with the agreement of the LLC.
ANALYSIS:
-Furthermore, the exit mechanism was not a reasonable alternative.
-It was not sufficient to provide an adequate remedy to the manager member under the circumstances, as the manager would be personally liable for the debt of the LLC.
-Therefore, the manager member was entitled to a judicial dissolution of the LLC.
CONCLUSION:
The motion for summary judgment was granted.
The parties were directed to confer and, within four weeks, they were to submit a plan for the LLC's dissolution.
---
Interested in learning how to get the top grades in your law school classes? Want to learn how to study smarter than your competition? Interested in transferring to a high ranked school?
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