Document: Kelly v. Blum, et al., C.A. No. 4516 – VCP, Parsons, V.C. (Del. Ch. Feb. 24, 2010)
This action, brought as an individual and derivative action on behalf of the nominal defendant limited liability company (“LLC”), challenged a merger involving the LLC. Plaintiff sought a declaratory judgment that the merger was void and also alleged breach of contract and fiduciary duties, breach of the implied covenant of good faith and fair dealing and defamation. The Court considered plaintiff’s motion for partial summary judgment that the merger was invalid for failure to comply with notice provisions of the LLC agreement and seeking to restore him as a member and manager of the LLC. The Court also considered defendants’ motion to dismiss all counts of plaintiff’s complaint. The Court found that the LLC agreement permitted the merger and the merger was not void for failure to comply with the LLC notice requirements. Thus, plaintiff could not sue derivately as he lost his standing as a result of the merger. The Court granted defendants’ motion to dismiss certain of the counts and plaintiff withdrew certain counts, but the Court denied the motion as to plaintiff’s breach of fiduciary duty and aiding and abetting breaches, as well as his defamation claim.