Friday, November 22, 2013

The Dunbar Group, LLC v. Tignor case brief

The Dunbar Group, LLC v. Tignor case brief summary
593 S.E.2d 216 (2004)


CASE SYNOPSIS
The Circuit Court for the City of Richmond (Virginia) entered a judgment that ordered the dissolution of a limited liability company after it found appellee owner had to be expelled as a member and owner of the limited liability company following the filing of a lawsuit against the owner by appellant co-owner. The co-owner appealed, not to challenge the order expelling the order, but to attach the portion of the order providing for dissolution.

CASE FACTS
The limited liability company was formed by the parties through the execution of an operating agreement under which the parties were the company's sole managers. The co-owner created the limited liability company's proprietary software and conducted the company's daily operations. The other owner's main function was to provide the limited liability company with access to his business contacts. The operating agreement provided the parties with a way to assert a breach of the agreement, including a right to petition a court of competent jurisdiction for dissolution, but stated that termination of a membership would not cause dissolution. The co-owner sought expulsion of the owner based on alleged acts of misconduct. After receiving evidence, the chancellor ordered the expulsion and the dissolution of the limited liability company.

DISCUSSION
On appeal, the state supreme court found that expulsion of the owner was proper, but dissolution was not because the record did not show it was not reasonably practicable to carry on the limited liability company's business.

CONCLUSION
That part of the trial court's judgment that ordered the owner to be expelled as a member of the limited liability company was affirmed. However, that part of the judgment that ordered the dissolution of the limited liability company itself was reversed, and final judgment was entered on those rulings.

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