## Facts

- GR BURGR, LLC (GRB) was a Delaware LLC formed to develop and operate burger-themed restaurants.
- GR US Licensing, LP (GRUS), affiliated with Gordon Ramsay, and Rowen Seibel each owned 50% of GRB and each appointed one manager (Gillies for GRUS; Seibel for himself).
- The LLC agreement required unanimous approval of the two managers for all business decisions and provided no mechanism to resolve deadlock.
- GRB’s only revenue-producing activity was a development/operation/license agreement with a Caesars affiliate for a restaurant at Planet Hollywood in Las Vegas.
- The Caesars agreement allowed Caesars, in its sole discretion, to deem any GRB member/manager/affiliate an “Unsuitable Person,” requiring termination of that relationship or risking termination of the Caesars agreement.
- Seibel pled guilty to a felony tax-related offense; Caesars designated him an Unsuitable Person and demanded GRB end its relationship with him.
- GRUS asked Seibel to dissociate; Seibel refused and proposed assigning his interest to a family trust; GRUS rejected that proposal.
- Caesars terminated the Caesars agreement, eliminating GRB’s only operating business.

## Issues

1. Whether GRB should be judicially dissolved under 6 Del. C. § 18-802 because it was not reasonably practicable to carry on the business in conformity with the LLC agreement, given manager deadlock, no deadlock-breaking mechanism, and loss of the only revenue-generating contract.
2. Whether equitable arguments that the dissolution petition was brought in bad faith to capture the business opportunity could defeat dissolution even if § 18-802’s standard was met.

## Decision

- The Court of Chancery granted GRUS’s motion for judgment on the pleadings.
- The court ordered judicial dissolution of GRB under 6 Del. C. § 18-802.
- The court found dissolution warranted because (1) the members were deadlocked, (2) the LLC agreement provided no method to resolve the deadlock, and (3) GRB had no ongoing business after termination of the Caesars agreement.
- The court rejected Seibel’s equitable defenses, concluding the petition responded to the company’s governance and business failures rather than bad-faith opportunism.

## Legal Principles

- Under 6 Del. C. § 18-802, an LLC may be dissolved when it is not reasonably practicable to carry on the business in conformity with the LLC agreement.
- “Not reasonably practicable” does not require literal impossibility; it focuses on whether the LLC can realistically pursue its contractual purpose under the agreed governance structure.
- In assessing § 18-802 dissolution, relevant considerations include: (1) deadlock at the member/manager level, (2) whether the operating agreement supplies a deadlock-resolution mechanism, and (3) whether there remains a viable business to operate given the company’s financial and operational condition.
- A 50–50 unanimity governance model without a contractual tiebreaker supports dissolution when relations deteriorate into persistent deadlock preventing action required by the agreement.
- Equity will not prevent dissolution where the company lacks a viable operating business and the petitioner’s conduct is consistent with contractual risk allocation and business realities, even if one party may benefit from dissolution.

## Conclusion

The court dissolved a 50–50 LLC because unanimous-consent governance produced unresolvable deadlock and, after a regulated counterparty terminated the LLC’s only contract due to a member’s disqualifying status, the company no longer had a viable business capable of being carried on in conformity with the LLC agreement.


In re GR BURGR, LLC, C.A. No. 12825-VCS (Del. Ch. 2017)