Document: In re Seneca Investments LLC, C.A. No. 3624-CC, Chandler, C. (Del. Ch. Sept. 23, 2008)
Petitioner, a former Chief Executive Officer of Seneca Investments LLC (“Seneca”), sought judicial dissolution of Seneca because the company was functioning only as a passive investment vehicle and has conducted limited business activity over the past several years. Seneca made several counterclaims against Petitioner, alleging claims of conversion and unjust enrichment for unlawfully funneling money out of Seneca. The court dismissed Petitioner’s claim, holding that Seneca’s corporate function as a passive instrumentality holding title to assets was both lawful and common. Accordingly, Petitioner failed to allege sufficient facts to support a claim that it was not reasonably practicable for the company to carry on business in conformity with its broadly-stated business purpose. The strategy of holding assets while awaiting future developments represented a rational and lawful use of the corporate form, a view further supported by Seneca’s active pursuit of legal claims against the Petitioner.