Meyer Natural Foods LLC v. Duff, C.A. No. 9703-VCN (Del. Ch., June 4, 2015). This Court of Chancery letter ruling is noteworthy to the extent that the Court granted dissolution of an LLC despite: (i) no deadlock (one member owned 51%); (ii) an ongoing profitable company; (iii) language in the LLC agreement barring voluntary dissolution; (iv) the ability of the LLC to continue to operate within the scope of its purpose clause, at least in theory; and (v) the court went beyond the four-corners of the agreement to explore the core purpose of the LLC. Specifically, notwithstanding an integration clause, the court considered other agreements that were contemporaneously entered into by the parties in connection with the formation of the LLC, only one of which had a Delaware choice of law clause. That factual consideration was key to addressing the “practicability” requirement for dissolution in 16 Del. C. Section 18-802
Key facts as noted by the Court:
The operative facts here are that PNB’s business depended on the integrated supply and distribution of natural beef, the Output and Supply Agreement is no longer effective, Respondents no longer believe that non-compete obligations apply, and no one wants to remain in the business as originally structured.
This decision should be juxtaposed with other rulings denying requests for dissolution even in the face of a deadlock, for example, as highlighted on these pages. But see recent decision highlighting broad equitable basis for court to consider dissolution of an LLC.