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ARTICLE · 29 MARCH 2021

Recent Delaware Chancery Decision Addresses Dissolution Based On LLC Deadlock

Lewis Brisbois Bisgaard & Smith LLP
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A recent Delaware Court of Chancery decision provided an exemplary analysis of when a deadlock in an LLC might be the basis for a dissolution. In Mehra v. Teller, C.A. No. 2019-0812-KSJM...

United StatesLitigation, Mediation & Arbitration
Francis Pileggi
Francis Pileggi
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Wilmington, Del. (March 25, 2021) - A recent Delaware Court of Chancery decision provided an exemplary analysis of when a deadlock in an LLC might be the basis for a dissolution. In Mehra v. Teller, C.A. No. 2019-0812-KSJM (Del. Ch. Jan. 29, 2021), the court analyzed case law, statutes, and learned commentary that it synthesized in a careful application to the facts of this case.

Two central issues were addressed by the court: (1) whether there was a failure to achieve votes necessary for board action; and (2) whether the board deadlock was "genuine" or merely manufactured to force the appearance of a deadlock.

This 75-page opinion by Vice Chancellor Kathaleen St. Jude McCormick deserves to be read in its entirety, but the key takeaways that make this decision especially noteworthy are the following:

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