Reed Smith Client Alerts

In In re Dissolution of Doehler Dry Ingredient Sols., Ltd. Liab. Co., No. 2022-0354-LWW, 2022 Del. Ch. LEXIS 235 (Del. Ch. Sept. 15, 2022), after considering threshold jurisdiction questions, the Delaware Court of Chancery dismissed the petitioner’s claim for judicial dissolution on the grounds that the “dysfunction and contrived deadlock complained of fall well short of the high bar to plead a claim for judicial dissolution.” The Court held that the petitioner failed to adequately allege that “it is not reasonably practicable for the company to carry on its business in conformity with its LLC agreement."


The company, Doehler Dry Ingredient Solutions, LLC, is a Delaware limited liability company with its principal place of business in Indiana. The company is governed by an LLC agreement, which provides that the company is managed by a board of managers. The Doehler board of managers initially included (i) the petitioner, Russell Davis; respondents (ii) Garry Beckett and (iii) Stuart McCarroll; and (iv) non-party J. Patrick O’Keefe. Petitioner Davis was allegedly the beneficial owner (through another entity controlled by the petitioner) of 25 percent of the company. The second 25 percent of the company was owned by Respondent Beckett. The remaining 50 percent was owned by Respondent Doehler North America, Inc., a subsidiary of a German company.

By March 2022, a dispute had emerged between Davis and the other board members. On March 24, 2022, board members representing a majority of the company’s ownership voted by written consent to remove Davis from the board and to limit Davis’s ability to invoice the company for compensation for services. The same day, Davis accused Beckett of hacking Davis’s corporate email accounts and sharing information with Andreas Klein, the chairman of Doehler North America’s German parent company.

According to Davis, other disagreements arose between Davis and the other board members, including that (i) at least one of the other board members argued that a prior separate agreement controlled (rather than the terms of the LLC agreement), and (ii) Beckett allegedly formed one or more of his own companies to compete with the company. Davis also alleged that the LLC agreement was violated when the company incurred more than $25,000 of debt without unanimous member consent and when Doehler North America sought to purchase Davis’s interests in the company. The Court found that Davis’s descriptions of these alleged other disagreements were “vague at best.”

On April 20, 2022, Doehler North America filed an action against Davis (and the entity controlled by Davis) in Delaware District Court alleging that Davis breached the LLC agreement by refusing to sell his units in the company to Doehler North America. The next day, Davis filed this petition in Delaware Chancery Court seeking judicial dissolution of the company under section 18-102 of the Delaware LLC Act. Davis contended that judicial dissolution was warranted because of “[i]rreconcilable differences among the members and managers.”

Respondents Doehler North America, McCarroll, and Klein filed a motion to dismiss or stay the Chancery action. Davis, in turn, filed a motion for partial summary judgment.