In re Doehler Dry Ingredient Solutions, LLC

Court of Chancery of the State of Delaware · 2022 · Corporations

Updated August 22, 2026

CorporationsLLC dissolutionpersonal jurisdictionDelaware LLC ActSection 18-802Section 18-803judicial dissolutionreasonable practicability

Facts

Doehler Dry Ingredient Solutions, LLC was formed to buy, source, manufacture, distribute, market, and sell dry foods, and its business was managed by a board of managers under an LLC agreement. Petitioner Russell Davis allegedly beneficially owned 25% of the company and was removed as a manager by written consent of majority members in March 2022; he also accused manager Garry Beckett of hacking his email and alleged other breaches of the LLC agreement and fiduciary duties. Davis claimed irreconcilable differences and asserted that he would withhold consent on future matters requiring unanimous member approval. The LLC agreement also contained a buy-sell option and a contractual dissolution process for unresolved deadlock.

Issue

Did the petition adequately state a claim for judicial dissolution under 6 Del. C. § 18-802 by alleging that it was not reasonably practicable for the LLC to carry on its business in conformity with the LLC agreement? Separately, did the court have personal jurisdiction over Klein under a conspiracy theory, and did a related federal action deprive the court of subject matter jurisdiction under Princess Lida?

Rule

Judicial dissolution under 6 Del. C. § 18-802 is a limited remedy granted sparingly and is available only when it is not reasonably practicable to carry on the LLC's business in conformity with the operating agreement, such as when management is so dysfunctional or the business purpose so thwarted that the company can no longer operate, including genuine voting deadlock or impossibility of fulfilling the entity's defined purpose. Mere disagreement, alleged fiduciary breaches, or a party's contrived refusal to consent do not suffice, especially where the operating agreement provides mechanisms to address deadlock. Conspiracy-based personal jurisdiction is narrowly construed and requires specific facts showing each Istituto Bancario element, including a substantial act or substantial effect in Delaware tied to the conspiracy.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

North Harbor Botanicals, LLC is a Delaware LLC that manufactures and sells dried herbs from its facility in Ohio. Two members in Chicago and Columbus accuse each other of self-dealing and breach of the operating agreement, but the company continues filling orders and earning revenue under a board-managed structure.

If one member petitions in Delaware for judicial dissolution based only on these accusations and interpersonal conflict, what is the most likely result?

Explanation. Judicial dissolution under 6 Del. C. § 18-802 is an extreme, limited remedy granted sparingly. The key question is whether it is not reasonably practicable to carry on the business in conformity with the operating agreement. Under the majority opinion, mere disagreement, accusations of breach, and generalized dysfunction are insufficient where the company is still operating its stated business. (Derived from In re Doehler Dry Ingredient Solutions, LLC (n.d.).)