The Delaware Court of Chancery recently addressed the titular topic and reasoned after a thorough analysis that, in opposing the appointment of a receiver, counsel’s “purported representation of a defunct limited liability company is not only puzzling, but impossible.” In Re Reinz Wisconsin Gasket, LLC, C.A. No. 2022-0859-MTZ, Slip op. at 2 (Del. Ch. May 8, 2023).
The Court had previously decided in a post-trial decision that a receiver should be appointed for a cancelled LLC under 6 Del. C. section 18-805, in connection with a request that the cancellation of the LLC should be nullified. In this heavily-footnoted 12-page letter ruling, the Court explained that because the LLC was cancelled and lacks a decisionmaker, the LLC “cannot participate in the process of appointing its own receiver or retain counsel to do so.” Slip op. at 11.