By Jason Jowers
This article examines the evolution of the Delaware Court of Chancery’s position on waiver of an LLC member’s right to seek judicial dissolution. In particular, the article addresses the Court of Chancery’s recent ruling that a provision in an LLC operating agreement opting-out of all default rights under the Delaware Limited Liability Company Act also waives the right of a member to seek judicial dissolution. Although the Court of Chancery had found in the past that a specific provision in an LLC agreement expressly waiving the members’ right to seek judicial dissolution was enforceable, this was the first time the Court has found that a more general provision opting-out of all default rights also waived the right to judicial dissolution if that right was not then preserved in a specific provision of the LLC agreement.
First published in Business Law Today, January 2014. Link to article.
Reprinted with permission.