In re Doehler Dry Ingredient Solutions, LLC

Doehler Dry Ingredient Solutions, LLC (defendant) was a Delaware limited-liability company (LLC) formed to allow its members to invest in the dry-foods industry. The LLC’s operating agreement stated that the LLC was to be managed by a board of managers. Russell Davis (plaintiff) was one of four initial managers. He was also the beneficial owner of 25 percent of the LLC via Crosskeys Associates Limited (Crosskey), an entity he controlled. Manager Gary Beckett (defendant) owned 25 percent of the LLC, and Doehler North America, Inc. (Doehler) (defendant) owned the remaining 50 percent. When a dispute arose between Davis and the LLC’s other members, a majority of the LLC’s membership interests voted to remove Davis as a manager and restrict payment for his services. The same day, Davis accused Beckett of hacking Davis’s email account and sharing discovered information with Andreas Klein (defendant), the chair of Doehler’s parent company. Doehler subsequently filed a federal suit against Davis, seeking an order compelling Davis to sell Crosskey’s LLC interest to Doehler per the LLC agreement. Davis then filed suit against the LLC, the LLC’s members and managers (defendants), Doehler, and Klein in Delaware state court. Davis sought judicial dissolution of the LLC and winding up of the LLC’s affairs due to irreconcilable differences among the members and managers. He made vague, unsubstantiated claims that the other members and managers violated their fiduciary duties and the LLC agreement. He also stated that he, via Crosskey, would deadlock future votes on LLC matters that required unanimous approval. The trial court granted a motion to dismiss Davis’s action for failure to state a viable claim. Davis appealed.