Document: Ross Holding and Management Company v. Advance Realty Group LLC, C.A. No. 4113-VCN (Del. Ch. Apr. 28, 2010)

This opinion highlights the fact that Delaware’s Limited Liability Company Act and related case law do not provide much guidance with respect to the issue of what constitutes “material participation in the management of a limited liability company” for purposes of giving implied consent to jurisdiction pursuant to Section 18-109 of the LLC Act.  The Court noted that the current case law indicates that activities such as forming a limited liability company, executing documents on its behalf and occasionally conferring with management and/or occasionally being involved in an single issue before the board of directors would not generally constitute material participation.  On the other hand, the opposite conclusion was reached where a defendant was one of the founders of an LLC, maintained a large equity stake, and had once claimed to be its president and CEO.  In this case, the Court determined that additional discovery on the jurisdictional issue would be necessary prior to rendering a decision on the defendant’s motion to dismiss.