COURT OF CHANCERY
OF THE
STATE OF DELAWARE
TAMIKA R. MONTGOMERY-REEVES Leonard L. Williams Justice Center
VICE CHANCELLOR 500 N. King Street, Suite 11400
Wilmington, Delaware 19801-3734
Date Submitted: October 7, 2016
Date Decided: November 15, 2016
Richard L. Renck William A. Hazeltine
Oderah C. Nwaeze Sullivan Hazeltine Allinson LLC
Duane Morris LLP 901 North Market Street, Suite 1300
222 Delaware Avenue, Suite 1600 Wilmington, DE 19801
Wilmington, DE 19801
RE: Jonathan Abelmann and Richard B. Greiwe v. Bryan Granum, et al.
Civil Action No. 12041-VCMR
Dear Counsel:
This Letter Opinion addresses plaintiffs’ motion for judgment on the
pleadings and petition for judicial dissolution. For the reasons stated below, the
motion is granted.
On February 24, 2016, Jonathan Abelmann (“Abelmann”) and Richard B.
Greiwe (“Greiwe,” together with Abelmann, “Petitioners”) filed a verified petition
(the “Petition”) for judicial dissolution of NAP Partners, LLC (the “Company” or
“NAP Partners”). On April 6, 2016, Bryan Granum (“Granum”) and Element
NYC, LLC (“Element,” collectively with Granum, “Respondents”), filed their
Abelmann v. Granum
C.A. No. 12041-VCMR
November 15, 2016
Page 2 of 4
verified answer and affirmative defenses to the petition (the “Answer”). On May
11, 2016, Petitioners filed a motion for judgment on the pleadings (“Motion”). On
June 13, 2016, Respondents filed their opposition to the motion for judgment on
the pleadings (“Opposition”). On October 7, 2016, the Court held oral argument
on the Motion.
A court may grant a motion for judgment on the pleadings under Court of
Chancery Rule 12(c) when, accepting as true and drawing all reasonable inferences
from the nonmoving party’s well-pleaded facts, the Court finds that “there is no
material fact in dispute and the moving party is entitled to judgment under the
law.”1 Under Section 18-802 of Chapter 6 of the Delaware Code, a member or
manager may apply to the court for dissolution of a limited liability company
“whenever it is not reasonably practicable to carry on the business in conformity
2
with a limited liability company agreement.” Judicial dissolution is a
discretionary remedy and is “granted sparingly.” 3 The remedy may be granted
1
In re Seneca Invs. LLC, 2008 WL 4329230, at *2 (Del. Ch. Sept. 23, 2008)
(quoting Warner Commc’ns Inc. v. Chris-Craft Indus. Inc., 583 A.2d 962, 965
(Del. Ch.1989), aff’d, 567 A.2d 419 (Del. 1989)).
2
6 Del. C. § 18-802.
3
Meyer Natural Foods LLC v. Duff, 2015 WL 3746283, at *3 (Del. Ch. June 4,
2015) (quoting Wiggs v. Summit Midstream P’rs, 2013 WL 1286180, at *12 (Del.
Ch. Mar. 28, 2013).
Abelmann v. Granum
C.A. No. 12041-VCMR
November 15, 2016
Page 3 of 4
when there is a deadlock “that prevent[s] the entity from operating and where the
defined purpose of the entity [is] fulfilled or impossible to carry out.”4
Here, both parties agree that Petitioners have standing to bring the Petition,
that the Company is at a deadlock, and that the entity should be dissolved. 5
Respondents’ only argument against the judicial dissolution is that it may prejudice
Element in a civil action currently pending in California state court. Respondents
therefore request that the Court use its discretion to delay dissolution until after
that matter is resolved. Petitioners argue that any delay in dissolution may affect
the damages awarded in any potential recovery under the California action.6
At argument, Petitioners stated they are not opposed to an order that
dissolves the entity on the condition that Petitioners cannot use the non-existence
of the entity as a defense or to challenge Respondents’ standing to bring the
California action once the entity is dissolved.7 While Respondents agree to certain
conditions preventing them from using the dissolution as a sword in the California
4
Id. (quoting In re Seneca Invs. LLC, 970 A.2d 259, 262 (Del. Ch. 2008)).
5
Resp’t Opp’n Br. 1 (stating Petitioners are members and managers of NAP
Partners); Oral Arg. Tr. 11.
6
Oral Arg. Tr. 6.
7
Id. at 13.
Abelmann v. Granum
C.A. No. 12041-VCMR
November 15, 2016
Page 4 of 4
action, they ask that the dissolution not foreclose argument in the California action
over any damages or mitigation thereof. While the Court expresses no opinion on
the merits or validity of any potential argument regarding damages, the request is a
reasonable one.
I grant the motion for judgment on the pleadings, subject to the conditions
that the Petitioners may not use the dissolution of the company as a pretext for any
challenge to the validity of the California action or Element’s standing to prosecute
that action. This ruling, however, does not preclude any argument by the
Petitioners regarding the end date for mitigation of damages in the California
action.
Parties shall submit a joint implementing form of order within ten days of
the date of this letter.
IT IS SO ORDERED.
Sincerely,
/s/Tamika Montgomery-Reeves
Vice Chancellor
TMR/jp