There are times in the life of an LLC where the relationship between the members or managers becomes so dysfunctional that it is not reasonable to continue the business. The Delaware Limited Liability Company Act recognizes that fact and provides that the Delaware Court of Chancery “may decree dissolution of a limited liability company whenever it is not reasonably practicable to carry on the business in conformity with a limited liability company agreement.” 6 Del. C. Section 18-802. In In re Dissolution of T&S Hardwoods KD, C.A. No. 2023-0782-MTZ (Del. Ch. Jan. 20, 2023), Vice Chancellor Morgan T. Zurn provided helpful guidance on what must be alleged to satisfy that test for purposes of overcoming a motion to dismiss. See 2023 Del. Ch. LEXIS 16 (Del. Ch. Jan. 20, 2023); 2023 WL 334674 (Del. Ch. Jan. 20, 2023).

The details of the court’s decision are discussed below, however, the court’s holdings can be summarized as follows:

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