A Delaware Chancery Court opinion was cited in a recent New York Supreme Court decision where a dissolution was denied to one of 3 members of a profitable LLC, based on the interpretation of a statute that is very similar to the Delaware LLC Act’s provision for allowing an LLC member to petition the court for dissolution “…when it is not reasonably practicable to carry on the business in conformity with the operating agreement”. The New York case is Horning v. Horning Construction LLC, download file.
The Delaware Chancery Court case cited was Haley v. Talcott, which was summarized on my blog here; and you can also download the opinion here. The Haley case interpreted Section 18-802 of the Delaware LLC Act which is similar to the New York statute interpreted by the Horning court. The Haley case however, only involved 2 members each of whom owned 50% of the LLC, which allowed the court to apply by analogy a Delaware joint venture statute that would not likely apply to a 3 member LLC.
The New York case cites to several articles and cases that collect sources on the history of the model LLC Act on which the Delaware and New York statutes are based. The NY court explains why it was intended to be harder to dissolve an LLC as opposed to a corporation, and ultimately, noting that there is no absolute right to dissolution.