Master In Chancery Recommends Plaintiffs Have Standing Based On Membership Ledger

In Gill v. Genency Holdings, LLC, C.A. No. 2023-0349-BWD (Del. Ch. June 26, 2023), a Master in Chancery recommended that LLC members established standing to inspect books and records by relying on the company's membership ledger, and declined to litigate the company's challenge to the validity of the members' interests in a summary books and records action.

Plaintiffs were alleged to be members of Genency Holdings, LLC (the Company or the LLC) and former managers of the Company's subsidiaries. The LLC was formerly wholly-owned by Plaintiffs' father, who appointed Plaintiffs managers of the operating subsidiaries and assigned them 46% of the LLC's membership interests.

Following their father's unexpected death, Plaintiffs' mother removed Plaintiffs from their positions of managers of the LLC and its subsidiaries. Plaintiffs were replaced by their sister, who purportedly discovered that plaintiffs had misappropriated LLC funds and engaged in self-interested