Gibson v. Konick, C.A. No. 2022-1036-LWW (Del. Ch. July 10, 2024)
The Court of Chancery dissolved a single asset LLC even though the LLC agreement required a unanimous vote of the members to dissolve, and one of the two members refused to consent to dissolution. The two members were involved romantically and purchased a beach home together through the LLC for their personal use and enjoyment. The relationship soured, and the parties were unable to reach an agreement on how to manage the beach home, which led Gibson to seek judicial dissolution pursuant to 6 Del. C. § 18-802.
Konick argued there was no deadlock because Gibson did not pursue a formal meeting of the LLC’s members to vote on dissolution, but the Court held there was no requirement that a petitioner pursue such “performative proposals … in vain” before claiming deadlock. The Court found that deadlock existed because the LLC agreement required Konick’s consent to dissolve, and Konick did not agree to dissolve. The Court ruled that the “purpose of enjoying the home over the long-term” had been “frustrated” by the parties’ breakup, and the deadlock between them meant that it was “no longer reasonably practicable to maintain the LLC.” The Court thus granted the motion for dissolution and appointed a liquidating trustee to oversee the LLC’s dissolution.
