## Facts

- Omniglow, LLC, a Delaware LLC, was owned by Leemon Family LLC (50%), the Holland trust (30%), and Achaian, Inc. (20%).
- The LLC agreement defined “Membership Interest” as a member’s “entire ownership interest” in Omniglow.
- The agreement permitted members to transfer all or any portion of their interest, but required written consent of the members to admit any person as a member after formation.
- In January 2010, Holland executed a purchase agreement purporting to transfer its entire 30% membership interest to Achaian.
- Achaian asserted the transfer gave it Holland’s voting and management rights, making Achaian and Leemon equal 50% members.
- Achaian sued seeking (1) a declaration that it held Holland’s full membership interest (including voting rights) and (2) judicial dissolution under 6 Del. C. § 18-802 for member deadlock.
- Leemon moved to dismiss, arguing the transfer conveyed only an economic interest because unanimous consent was required for any transfer of voting/management rights.

## Issues

1. Whether the LLC agreement permitted an existing member to acquire another member’s entire membership interest, including voting and management rights, without unanimous consent, notwithstanding a unanimous-consent clause for admitting “new” members.
2. Whether allegations of a resulting 50/50 ownership split and managerial impasse supported judicial dissolution under 6 Del. C. § 18-802.

## Decision

- The court denied the motion to dismiss.
- The court declared that Holland’s assignment to Achaian was effective to transfer Holland’s entire membership interest, including associated voting and management rights.
- The court determined the post-transfer structure created two coequal 50% members.
- The court granted judicial dissolution of Omniglow under 6 Del. C. § 18-802 based on deadlock rendering continued operation not reasonably practicable under the LLC agreement.

## Legal Principles

- The Delaware LLC Act supplies default rules; the parties’ LLC agreement principally controls members’ rights and obligations.
- Under 6 Del. C. § 18-702(b), an assignee lacks management and voting rights unless the LLC agreement provides otherwise; contractual language can displace that default.
- A unanimous-consent requirement for admission of “new” members does not, without express language, require “readmission” or separate consent when an existing member acquires an additional membership interest from another existing member.
- Judicial dissolution under 6 Del. C. § 18-802 is available when, considering the pleaded facts, it is not reasonably practicable to carry on the business in conformity with the LLC agreement, including where two 50% members are deadlocked.

## Conclusion

The court interpreted the LLC agreement to permit a member to transfer its entire membership interest, including governance rights, to another existing member without obtaining other members’ consent, and it dissolved the LLC after the transfer produced a 50/50 deadlock that made continued operation not reasonably practicable under the governing agreement.


Achaian, Inc. v. Leemon Family LLC, 25 A.3d 800 (Del. Ch. 2011)