This article was written by Rae Ra, a corporate litigation associate in the Delaware office of Lewis Brisbois.

In the matter styled In re Coral Gables Luxury Holdings, 2025 WL 1356027, Order (Del. Ch. May 9, 2025), the Court of Chancery granted summary judgment in favor of a 50% member of an LLC who sought the appointment of a liquidating trustee for the LLC.

The LLC was owned by two members who owned equal 50% interests. The members were in a bitter dispute in Florida since at least January 2016, during which the LLC’s main property was sold, and the sale proceeds were held in an escrow agreement.

Both members agreed that the sale of the property, under the LLC Agreement, mandated the dissolution of the LLC, but they disputed whether a liquidating trustee was needed with the escrow agreement in place.

The Court held that, under both the LLC Agreement and the LLC Act, there was cause to appoint a liquidating trustee and rejected the contention that a trustee could not be appointed in the face of the escrow agreement. The Court noted that, even if a party “might be right about how the Escrow Agreement works; this decision does not reach that issue [, because under] Delaware law, the question is whether the party seeking the appointment of a trustee has shown cause.” Here, the members’ history and inability to cooperate on anything constituted just cause.