The Delaware Court of Chancery has granted the plaintiffs' request for judicial dissolution of BVWebTies LLC, a Delaware limited liability company. In the case, co-equal owners and managers of the LLC disagreed over the company's management. The company's LLC agreement, however, provided no method by which to break a deadlock among the members. The plaintiffs, citing the inability to break the deadlock, sought for the dissolution of the company, while defendants, citing the company's profitability, argued that the business should be allowed to continue and that its existence was reasonably practicable. The court agreed with the plaintiffs, finding that it was not reasonably practicable for the company to operate in conformity with the LLC Agreement and that judicial dissolution was warranted. In cases involving co-equal owners or co-equal managers, one co-equal manager cannot simply lock out the other or operate the business without the consent of the other, but if an attempt is made, it is a persuasive basis for dissolution. The opinion adds depth to the case law surrounding Section 18-802 of the Delaware LLC Act, which allows members of an LLC to seek dissolution when it is not reasonably practicable to continue to operate an LLC.
Vila v. BVWebTies LLC, C.A. No. 4308-VCS (Del. Ch. Oct. 1, 2010)