The Homer C. Gutchess 1998 Irrevocable Trust v. Gutchess Companies, LLC, C.A. No. 4916-VCN (Del. Ch. Feb 16 and 22, 2010), read letter decision here and original transcript of ruling here.
Maura Burke, an associate in our Delaware office, prepared this case summary.
Introduction: In The Homer C. Gutchess 1998 Irrevocable Trust v. Gutchess Companies, LLC, the Court of Chancery first issued a bench ruling (dated Feb. 16, 2010) and then published a supplemental opinion letter (dated Feb. 22, 2010) dismissing a petition for judicial dissolution of a Delaware limited liability company. Although the limited liability company at issue was created as part of an estate planning program, the Delaware Court of Chancery treated the dissolution of this company as it would with any LLC—by respecting the member’s private preferences as expressed in the company’s operating agreement.
Background: Gutchess Companies, LLC (the “LLC”) was created in 2002 as an estate planning vehicle to hold Homer C. Gutchess’s shares in Gutchess Lumber, a lumber mill and leading supplier of hardwood lumber located in New York state. The operating agreement of the LLC split the voting interest from the equity interest. Homer retained 100% of the voting interest, and 1% of the equity interest. Homer’s wife, Martha, initially held only a 1% equity interest. The remaining 98% equity interest was held by The Homer C. Gutchess 1998 Irrevocable Trust (the “Trust”). Later, Homer transferred his voting interest to Martha, such that Martha held 100% voting interest, and a 1% equity interest in the LLC. After Homer’s death in 2006, Martha appointed Gary Gutchess, her son, as the LLC’s sole manager. Subsequently, a...
