   IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE


SOLARRESERVE CSP HOLDINGS,                )
LLC, a Delaware limited liability         )
company,                                  )
                                          )
                        Plaintiff,        )
                                          )
               v.                         )   C.A. No. 2019-0791-JRS
                                          )
TONOPAH SOLAR ENERGY, LLC,                )
a Delaware limited liability company,     )
                                          )
                        Defendant.        )



                         MEMORANDUM OPINION

                       Date Submitted: February 24, 2020
                        Date Decided: March 18, 2020


Francis G.X. Pileggi, Esquire of Eckert Seamans Cherin & Mellott, LLC,
Wilmington, Delaware and Michael G. Platner, Esquire, John S. Poulos, Esquire and
Vincent F. Alexander, Esquire of Lewis Brisbois Bisgaard & Smith LLP,
Ft. Lauderdale, Florida, Attorneys for Plaintiff.

Andrew D. Cordo, Esquire, Shannon E. German, Esquire and Nora M. Crawford,
Esquire of Wilson Sonsini Goodrich & Rosati, P.C., Wilmington, Delaware and
Matthew A. Feldman, Esquire, Todd G. Cosenza, Esquire and Charles D. Cording,
Esquire of Willkie Farr & Gallagher LLP, New York, New York, Attorneys for
Defendant.




SLIGHTS, Vice Chancellor
         Tonopah Solar Energy, LLC (“Tonopah”) was created to build and operate a

solar power plant in Nevada. At Tonopah’s formation, Plaintiff, SolarReserve CSP

Holdings, LLC (“SolarReserve”), was its sole owner. As the project moved forward,

and expenses mounted, SolarReserve determined that it needed to seek out other

funding sources to help cover expenses. After exploring its options, Tonopah took

out loans from the United States Department of Energy (“the DOE”) and entered

into a co-venture relationship with a construction firm, Cobra Thermosolar Plants,

Inc. (“Cobra”).

         The funding infusion did not solve Tonopah’s challenges. According to

SolarReserve, Cobra botched the construction of the power plant, which caused the

DOE to declare events of default under the governing loan documents.             The

declarations, in turn, triggered the DOE’s rights to alter Tonopah’s governance

structure, thereby removing SolarReserve from its position of control over Tonopah.

         SolarReserve now petitions the Court to dissolve Tonopah, not as a matter of

law under Delaware’s Limited Liability Company Act (the “Act”),1 but as a matter

of equity. According to SolarReserve, it is no longer reasonably practicable to carry

on Tonopah’s business.




1
    6 Del. C. § 18-101 et seq.

                                           1
         Statutory dissolution of a Delaware limited liability company (“LLC”) is only

available to the entity’s members and managers. SolarReserve is neither a member

nor manager of Tonopah. Acknowledging it has no statutory standing to seek

dissolution, SolarReserve urges the Court to invoke its equitable powers to order

Tonopah’s dissolution.       In response, Tonopah has filed a Motion to Dismiss

SolarReserve’s Amended Complaint for failure to state a viable basis for

dissolution.2

         After giving SolarReserve the benefit of all reasonable inferences, I conclude

it has not pled facts that would justify, much less allow, dissolution as a matter of

equity. SolarReserve may have other rights and remedies stemming from the facts

it alleges, but a Court order dissolving Tonopah is not one of them.

                        I. FACTUAL BACKGROUND

         I draw the facts from the allegations in the Complaint, documents

incorporated by reference or integral to that pleading and judicially noticeable facts.3




2
    Am. Compl. (D.I. 38) (“Complaint”).
3
  See Wal-Mart Stores, Inc. v. AIG Life Ins. Co., 860 A.2d 312, 320 (Del. 2004) (quoting
In re Santa Fe Pac. Corp. S’holder Litig., 669 A.2d 59, 69 (Del. 1995)) (noting that on a
motion to dismiss, the court may consider documents that are “incorporated by reference”
or “integral” to the complaint); D.R.E. 201–02 (codifying Delaware’s judicial notice
doctrine).

                                            2
For purposes of this Motion to Dismiss, I accept as true the Complaint’s well-pled

factual allegations and draw all reasonable inferences in Plaintiff’s favor.4

     A. Parties and Relevant Non-Parties

         Defendant, Tonopah, is a Delaware LLC.5 Plaintiff, SolarReserve, holds an

“indirect equity interest” in Tonopah “through several intermediary entities.” 6

Specifically, SolarReserve holds a 50% interest in Tonopah Solar Investments, LLC

(“TSI”), which has an interest in Tonopah Solar Energy Holdings I, LLC, which, in

turn, has an interest in Tonopah Solar Energy Holdings II, LLC (“Holdings”).

Holdings is the sole member of Tonopah.7

         Non-party, Cobra, is an engineering, procurement and construction firm. 8

As explained in more detail below, Cobra and SolarReserve agreed to become

“50/50 co-venturers” in the construction of the Tonopah solar power plant in




4
    Savor, Inc. v. FMR Corp., 812 A.2d 894, 896–97 (Del. 2002).
5
    Compl. at 1.
6
    Compl. ¶ 1.
7
    Compl. ¶¶ 1, 14.
8
    Compl. ¶ 10.

                                            3
Nevada.9 Non-party, the DOE, is a federal agency that agreed to fund “the majority”

of the power plant project.10

         The following organizational chart depicts the relationships between the

relevant parties and non-parties:11




9
    Compl. ¶¶ 17–18.
10
     Compl. ¶ 15.
11
     The chart is compiled from Compl. ¶¶ 11–14; Compl. Ex. C.

                                            4
      B. Tonopah’s Origins and Finances

           In March 2008, a SolarReserve affiliate formed Tonopah for the stated

purpose of developing, owning and operating a solar power plant in Nevada. 12

At first, SolarReserve effectively owned 100% of Tonopah’s membership

interests.13 To get its power plant up and running, Tonopah planned to proceed in

three steps.

           First, in response to higher costs than anticipated related to construction of

the power plant, Tonopah went in search of capital.14 In the fall of 2011, Tonopah

entered into agreements with the DOE by which the DOE guaranteed a $700 million

loan to Tonopah (the “DOE Loan”).15 The DOE Loan is governed by a Loan

Guarantee Agreement (the “LGA”).16

           Second, with capital in hand, Tonopah hired Cobra to design and build the

power plant.17 Cobra agreed to build the power plant not only as a contractor but




12
     Compl. ¶ 9.
13
     Id.
14
     Compl. ¶ 15.
15
     Compl. ¶ 9.
16
     Compl. ¶ 27.
17
     Compl. ¶ 10.

                                              5
also as a co-venturer with SolarReserve.18       SolarReserve surrendered its sole

ownership of Tonopah to allow Cobra to become a 50% investor in TSI, which, in

turn, held an indirect interest in Tonopah.19

           Third, as a condition of the DOE’s willingness to “fund the majority” of

Tonopah’s power plant project, the DOE required Tonopah to find a buyer for the

power plant’s energy before Tonopah could start building.20          To fulfill this

requirement, Tonopah contracted with Nevada Power Company d/b/a/ NV Energy

(“NVE”).21          NVE agreed to purchase Tonopah’s energy, subject to certain

conditions.22 To memorialize their agreement, Tonopah and NVE signed a Power

Purchase Agreement (the “PPA”), which obligated NVE to purchase energy over a

span of 25 years.23 The PPA required Tonopah’s plant to be up and running by

“late 2014.”24




18
     Compl. ¶¶ 17–18.
19
     Id.
20
     Compl. ¶¶ 15–16.
21
     Id.
22
     Compl. ¶ 20.
23
     Id.
24
     Id.

                                           6
         As a result of these three steps, SolarReserve surrendered its sole ownership

of Tonopah, took on a 50% co-venturer in Cobra, and assumed $700 million in debt

guaranteed by the DOE with significant strings attached (as discussed below). These

results were fine from SolarReserve’s perspective so long as the project moved

forward as planned. Unfortunately, it didn’t.

      C. Tonopah’s LLC Agreement

         Tonopah’s constitutive document is its Third Amended and Restated Limited

Liability Company Agreement (the “LLC Agreement”).25 The LLC Agreement

makes clear that SolarReserve was Tonopah’s “Original Member,” but that changed

over time. As of the time SolarReserve brought its Complaint, Tonopah had one

“sole member”—Holdings—not SolarReserve.26 Section 3.5 of the LLC Agreement

states, “[n]ew members shall be admitted only upon the approval of the Board of

Managers.”27 And Section 8.1 provides that Holdings may not “sell, assign or

transfer . . . all or any part of its Membership Interests . . . without the prior written




25
     Compl. at 1; Compl. Ex. A (D.I. 38) (the LLC Agreement).
26
   LLC Agreement at 1 (recitals) (“WHEREAS, [SolarReserve] assigned and transferred
all of its membership interests in [Tonopah] to [Holdings].”). Holdings is now Tonopah’s
sole member. Compl. ¶ 14.
27
     LLC Agreement § 3.5.

                                            7
consent of the Board of Managers.”28 These provisions, often called “choose your

partner” provisions, further remove SolarReserve from Tonopah’s governance.

      D. Tonopah’s Troubles

         SolarReserve alleges everything went south after Cobra encountered

“construction delays” and performed “grossly deficient work.”29 Indeed, the power

plant is still not fully operational today.30 These delays caused Tonopah to miss key

deadlines under the PPA, releasing NVE from its obligations to purchase Tonopah’s

energy.31

         When NVE walked away from the project, the DOE declared an event of

default under the LGA.32 This, in turn, allowed the DOE to exercise certain remedies

under the LGA and other related agreements, including (i) a right to replace

SolarReserve’s nominees to Tonopah’s Board of Managers (the “Board”) with its

own nominees and (ii) placing Holdings’ Tonopah units with a collateral agent for




28
     LLC Agreement § 8.1
29
     Compl. ¶ 30.
30
     Compl. ¶ 34.
31
     Compl. ¶¶ 35–36.
32
  Compl. ¶ 37; Compl. Ex. B at 1–2 (the DOE’s Default Letter, instructing Holdings to
“cease and desist from taking any action purporting to exercise the voting, consensus, and
other powers of ownership pertaining to the Pledged Collateral” under the LGA and the
Equity Pledge Agreement between Holdings and the DOE).

                                            8
the DOE’s benefit until the event of default was cured.33 Until the default is cured,

Holdings is prohibited from exercising the “powers of ownership” pertaining to its

Tonopah units.34 Currently, SolarReserve alleges Tonopah is insolvent and without

any realistic possibility of fulfilling its stated purpose (building a solar power

plant).35

         The Complaint contains a torrent of accusations against Cobra and the DOE

related to Tonopah’s post-loan troubles. The DOE allegedly “manufactured” its

events of default while Cobra used its 50% investment in TSI to “veto” Tonopah’s

efforts to sue Cobra for its negligent construction services.36 The Complaint also

insinuates the DOE and Cobra are working together to “freeze SolarReserve out” of

its investment in Tonopah.37 I do not tarry long on these allegations as none of the

alleged wrongdoers are parties to this action.



33
   Compl. ¶¶ 37, 42–43, 50; Compl. Ex. B at 2 (“Pursuant to . . . the Equity Pledge
Agreement, upon the occurrence and during the continuation of an Event of Default . . .
under the [LGA] all rights of [Holdings] to exercise the voting, consensus and other powers
of ownership pertaining to the Pledged Collateral . . . ceased and such rights vested in the
Collateral Agent.”); Opening Br. in Supp. of Def.’s Mot. to Dismiss the Am. Compl.
(D.I. 17) Ex. 3 (the “Equity Pledge Agreement”) §§ 2 (defining “Pledged Collateral” to
include “all limited liability company interests . . . of [Tonopah]”), 6(b).
34
     Equity Pledge Agreement §§ 2, 6(b).
35
     Compl. ¶ 45.
36
     Compl. ¶¶ 37, 40.
37
     Compl. ¶ 43.

                                             9
      E. Procedural History

          On October 2, 2019, SolarReserve filed its original Verified Complaint

pursuant to Section 18-110 of the Act seeking an order declaring that SolarReserve

had the right to appoint a manager to the Board and naming Tonopah and the DOE

as defendants.38 Soon after, the DOE removed the case to the United States District

Court for the District of Delaware (“Delaware District Court”).39

          While the case was proceeding in the Delaware District Court, SolarReserve

amended its pleading by filing the now-operative Complaint—dropping the DOE as

a defendant and seeking Tonopah’s equitable dissolution rather than a declaration of

rights.40 This amendment prompted the Delaware District Court to remand the case

back to this court for further proceedings on November 18, 2019.41 On that same

day, Tonopah filed a Motion to Dismiss under Court of Chancery Rule 12(b)(6).42

                                 II. ANALYSIS

          In considering a motion to dismiss under Court of Chancery Rule 12(b)(6),

the Court applies a well-settled standard:


38
     D.I. 1.
39
     D.I. 8.
40
     D.I. 38.
41
     D.I. 9.
42
     D.I. 10.

                                          10
         (i) all well-pleaded factual allegations are accepted as true; (ii) even
         vague allegations are ‘well-pleaded’ if they give the opposing party
         notice of the claim; (iii) the Court must draw all reasonable inferences
         in favor of the non-moving party; and (iv) dismissal is inappropriate
         unless the plaintiff would not be entitled to recover under any
         reasonably conceivable set of circumstances susceptible of proof.43

         Given that SolarReserve’s arguments in favor of dissolution rely heavily on

this Court’s equitable powers, I begin my analysis by considering the proper role of

equity in the context of Delaware LLCs. Next, I briefly address the statutory

standards for dissolution before turning to SolarReserve’s efforts to plead a case for

equitable dissolution. As I explain below, Tonopah’s Motion to Dismiss must be

granted because SolarReserve fails to state a reasonably conceivable claim for

equitable dissolution.

      A. Equity and the Enforcement of LLC Agreements

         At its essence, a Delaware LLC is a “creature of contract, designed to afford

the maximum amount of freedom of contract, private ordering and flexibility to the

parties involved.”44 Indeed, “[i]t is this flexibility that gives ‘uncorporate’ entities

like limited liability companies their allure.”45 With this in mind, Delaware courts

take care to uphold “the public policy of Delaware” to honor the expressed intent of


43
     Savor, 812 A.2d at 896–97 (citations omitted).
44
  6 Del. C. § 18-1101(b); R&R Capital, LLC v. Buck & Doe Run Valley Farms, LLC,
2008 WL 3846318, at *4 (Del. Ch. Aug. 19, 2008) (internal quotations omitted).
45
     R&R Capital, 2008 WL 3846318, at *4.

                                              11
the parties to an LLC agreement as determined from the language of the agreement.46

Except in the most extreme circumstances, this court will not “invoke equitable

principles to override the plain language of an [LLC agreement].”47

      B. Judicial Dissolution

         Delaware’s LLC Act identifies certain circumstances under which a Delaware

“a limited liability company [can be] dissolved and its affairs [] wound up.”48

Among them is “[t]he entry of a decree of judicial dissolution under § 18-802.”49

Section 18-802, in turn, allows a Delaware LLC’s “member or manager” to seek a

judicial decree of dissolution.50 To the extent a member or manager of a Delaware

LLC seeks court-ordered dissolution, Sections 18-801 and 18-802 lay out the path

he must traverse to achieve that result.



46
  Id., at *6; Absalom Absalom Trust v. Saint Gervais LLC, 2019 WL 2655787, at *5–6
(Del. Ch. June 27, 2019).
47
  Absalom, 2019 WL 2655787, at *6. See also id. (noting that equity “always attempts to
ascertain, uphold, and enforce rights and duties which spring from the real relations of the
parties.”); R&R Capital, 2008 WL 3846318, at *7 (observing that Chancery will not lightly
disregard clear contractual language under the guise of equity “lest the courts erode the
primary attraction of limited liability companies.”).
48
     6 Del. C. § 18-801(a).
49
  6 Del. C. § 18-801(a)(5). The Act lists other scenarios that trigger dissolution, including
that the lifespan of the entity as stated in the LLC agreement has expired, that members by
two-thirds vote agree to dissolution, and that the LLC no longer has members. See 6 Del.
C. § 18-801(a)(1)–(5).
50
     6 Del. C. § 18-802.

                                             12
         As noted, SolarReserve does not seek Tonopah’s statutory dissolution because

it is neither member nor manager of Tonopah.51 Instead, SolarReserve asks the

Court to dissolve Tonopah as a matter of equity.52 This is a far less-traveled path to

achieve the dissolution of a Delaware LLC. To be sure, this court views any form

of judicial dissolution as a “limited remedy that [should be] grant[ed] sparingly.”53

Where, as here, a petitioner seeks equitable dissolution outside of the grounds

enumerated in the Act, such as where a non-member/non-manager seeks dissolution,

that petitioner must “explain” in a “convincing manner” why this court should

“invoke equitable principles to override the plain language” of the Act and the

relevant LLC agreement.54

         Apparently recognizing that its “lack of formal status as a member or

manager” is likely fatal to its bid for dissolution, SolarReserve understandably



51
   Pls.’ Answering Br. in Opp’n to Defs.’ Mot. to Dismiss (“PAB”) (D.I. 29) at 10–11;
Trusa v. Nepo, 2017 WL 1379594, at *6 (Del. Ch. Apr. 13, 2017); In re Carlisle Etcetera
LLC, 114 A.3d 592, 597 (Del. Ch. 2015) (Section 18-802 “[b]y its terms . . . limits the right
to seek statutory dissolution . . . to members and managers of an LLC.”) (emphasis
supplied).
52
  Compl. ¶¶ 65–71. For its part, Tonopah does not challenge whether “this Court has the
jurisdiction to find equitable standing here.” Reply Br. in Further Supp. of Def.’s Mot. to
Dismiss the Am. Compl. (D.I. 35) (“DRB”) at 5 n.10 (emphasis supplied). Instead, it
contends SolarReserve has not “pled facts that would compel the Court to exercise its
power under the circumstances.” Id.
53
     In re Arrow Inv. Advisors, LLC, 2009 WL 1101682, at *2 (Del. Ch. Apr. 23, 2009).
54
     Absalom, 2019 WL 2655787, at *6.

                                             13
cleaves to Carlisle, “the only extant LLC precedent where the Chancery Court has

explicitly relied on its constitutionally vested equitable powers” to dissolve a

Delaware LLC where the petitioner lacks standing to seek dissolution under the

Act.55 Carlisle, however, was a very different case.

           Carlisle, a Delaware LLC, had two original members, Tom James Company

(“James”) and Well Union Capital Limited (“Wu Parent”).56 When the original

members formed Carlisle, they “executed a simple form of operating agreement . . .

in which they committed to work promptly on a more detailed operating

agreement.”57 Shortly after Carlisle’s formation, and when business was going well,

Wu Parent decided to assign its membership interests to a wholly owned subsidiary

for tax purposes.58 After the assignment, James treated the subsidiary as Carlisle’s

member.59 For example, all of Carlisle’s tax filings and all subsequent agreements



55
   PAB at 11 n.13 (citing Carlisle, 114 A.3d 592). SolarReserve makes other arguments in
support of dissolution, all of which assume it has overcome its lack of member or manager
status as a predicate to seek this extreme remedy. See, e.g., PAB at 13–23 (arguing why it
is no longer practicable to achieve Tonopah’s stated purpose). While these arguments may
have merited consideration if made by a member or manager, they have no bearing on the
question of whether the Court should invoke equity on behalf of an outsider to dissolve an
entity when neither the member nor manager of the entity seek that relief.
56
     Carlisle, 114 A.3d at 594.
57
     Id. at 594, 596.
58
     Id. at 594.
59
     Id.

                                           14
between James, Wu Parent and Carlisle identified the subsidiary as the member, not

Wu Parent.60

           The parties drafted an amended LLC agreement which referred to the

subsidiary as Carlisle’s member, but “because their relationship seemed amicable,

and business matters took precedence,” they never got around to executing the

amended LLC agreement.61 Unfortunately, James and Wu Parent’s relationship did

not remain amicable. Disagreements over management issues eventually led to

deadlock.62

           Despite the managerial disagreements, James was satisfied with the status

quo. Four members comprised Carlisle’s board of managers (two nominated by each

party), yet James had appointed Carlisle’s CEO.63 Since the board of managers was

in deadlock, neither party could remove the CEO, leaving James effectively in

control of Carlisle because its hand-picked CEO ruled the roost “free of any

oversight.”64




60
     Id. at 595.
61
     Id. at 596.
62
     Id.
63
     Id.
64
     Id. at 594.

                                           15
           Alarmed by these developments, Wu Parent and its subsidiary both petitioned

for Carlisle’s dissolution.65 In response, James moved to dismiss, arguing neither

Wu Parent nor its subsidiary had standing to seek dissolution since the former had

assigned its interest and the latter had never been formally admitted to Carlisle as a

member.66 James pressed these arguments even though it had drafted an agreement

referring to the subsidiary as Carlisle’s member just months before the case began.67

           The court agreed with James that Wu Parent and the subsidiary had not stated

a claim for statutory dissolution.68 Yet, under the extreme facts alleged, following a

thorough and thoughtful explication of the origin and scope of this court’s equitable

powers, Vice Chancellor Laster held the subsidiary had stated a claim for equitable

dissolution based on the court’s “retain[ed] . . . residual authority” that prevents a

Delaware LLC from being “wholly exempt” from judicial oversight.69 As the court

explained, contrary to James’ argument, Chancery cannot be divested (by statute or

agreement) of its authority to order dissolution “where it appears manifest that equity




65
     Id. at 597.
66
     Id.
67
     Id. at 596–97.
68
     Id. at 601.
69
  Id. at 606 (quoting In re Revlon, Inc. S’holders Litig., 990 A.2d 940, 960 n.8
(Del. Ch. 2010)).

                                            16
so requires.”70 With this principle, I heartily agree. And I fully endorse Carlisle’s

application of the principle to the unique facts presented there.

           But, again, the facts here bear no resemblance to Carlisle. Before drawing

the dispositive distinctions, it is useful to bring the question into focus—has

SolarReserve pled a set of reasonably conceivable facts “where it appears manifest”

that equity must intervene?71 In this regard, equity has no indurated rules, but it does

have many apothegms. “Equity always attempts to ascertain, uphold, and enforce

rights and duties which spring from the real relations of parties.”72 “Equity regards

substance rather than form.”73 Equity also “regards that as done which in good

conscience ought to be done.”74 In Carlisle, these formulations prompted the court

to give effect to the parties’ “real relationship” as a “joint venture in which they are

equal participants” with neither member intending to be a “passive investor.”75

Critical to the court’s analysis were the well-pled facts revealing that James treated



70
 Id. (citing Huatuco v. Satellite Healthcare and Satellite Dialysis of Tracy, LLC, 2013
WL 6460898 (Del. Ch. Dec. 9, 2013), aff’d, 93 A.3d 654 (Del. 2014)).
71
     Id.
72
  Id. at 607 (citing 4 John Norton Pomeroy, Equity Jurisprudence § 1333(1) (Spencer W.
Symons ed., 5th ed. 1941) (emphasis in original)).
73
     Id. (citing Monroe Park v. Metro. Life Ins. Co., 457 A.2d 734, 737 (Del. 1983)).
74
     Id. (citing Monroe Park, 457 A.2d at 737).
75
     Id. (citation omitted).

                                              17
the subsidiary as a member throughout its course of dealing with Wu Parent, right

up to the point where it sought a decree of equitable dissolution.76

          In contrast, SolarReserve pleads that it made calculated choices to reshape

Tonopah’s complicated ownership structure in order to secure additional funding.77

As a result, unlike Wu Parent in Carlisle, by virtue of its own choices, and as

recognized by all of the entity’s constituents, SolarReserve’s “real relationship” to

Tonopah is that of a remote, indirect investor, not a member.78 The LLC Agreement

unambiguously states, “[Holdings is] the sole member of [Tonopah].”79 If I were to

allow SolarReserve to seek Tonopah’s dissolution, I would not be “upholding”

rights, I would be creating new ones SolarReserve did not bargain for or reasonably

expect.80

          This inescapable reality is further revealed in the fact that SolarReserve’s

claim to ownership runs through Holdings, which has pledged all of its “right, title

and interest in . . . [Tonopah’s] limited liability company interests” to a collateral




76
     Id. at 606.
77
  See, e.g., Compl. ¶¶ 17–18 (describing SolarReserve’s decision to give up its sole
ownership of Tonopah).
78
     Compl. ¶¶ 17–19.
79
     LLC Agreement at 1 (recitals).
80
     Carlisle, 114 A.3d at 607.

                                           18
agent to secure the DOE Loan.81 Now that the DOE has foreclosed under the LGA,

SolarReserve cannot rely on equity to recoup rights it knowingly bargained away. 82

There is no “manifest” role for equity here; the parties’ contract must prevail.83

         As a last ditch argument, SolarReserve points to provisions in the LLC

Agreement that grant SolarReserve rights like those commonly held by members

and maintains that this somehow reflects an intent to confer member status on




81
     Equity Pledge Agreement § 2(a).
82
   At oral argument on the Motion to Dismiss, SolarReserve’s counsel represented that
Tonopah was operating without “adult supervision” such that no one can hold Tonopah’s
fiduciaries responsible for hypothetical (but unalleged) breaches of their fiduciary duties.
Oral Arg. on Def.’s Mot. to Dismiss the Am. Compl. (“Tr.”) (D.I. 43) at 37. This argument
was not clearly articulated in SolarReserve’s Answering Brief, but the idea appears to be
that Cobra is using its rights at the TSI level to “veto” any efforts SolarReserve makes to
hold Cobra and the DOE responsible for alleged wrongdoing, such that dissolution is the
only available remedy left for SolarReserve. Compl. ¶¶ 40–42. The argument is
unpersuasive for several reasons. First, SolarReserve has not brought a claim for breach
of fiduciary duty and equity will not support an extraordinary order to dissolve an LLC on
the mere speculation that someone may be breaching fiduciary duties. See In re Shawe &
Elting LLC, 2015 WL 4874733, at *33 (Del. Ch. Aug. 13, 2015). Second, nothing in this
decision prevents SolarReserve from pursing relief at the TSI level to vindicate wrongs
TSI’s fiduciaries allegedly committed at the Tonopah or Holdings levels. See, e.g.,
Case Fin., Inc. v. Alden, 2009 WL 2581873, at *7 (Del. Ch. Aug. 21, 2009) (holding that
fiduciaries have “a duty not to intentionally . . . participate in conduct that would injure
[a parent entity] . . . regardless of how far down the causal chain the injury would occur”).
Finally, to the extent SolarReserve would seek equitable dissolution based on the
wrongdoing of either Cobra or the DOE, both Cobra and the DOE would be necessary
parties to this proceeding. Del. Ct. Ch. R. 19(b).
83
  Carlisle, 114 A.3d at 606 (holding the court should invoke equity to overcome a contract
only “where it appears manifest that equity so requires”); Libeau v. Fox, 880 A.2d 1049,
1056 (Del. Ch. June 16, 2005) (“When parties have ordered their affairs voluntarily through
a binding contract, Delaware law is strongly inclined to respect their agreement.”).

                                             19
SolarReserve in all matters.84 By way of example, Section 7.2 gives SolarReserve

rights to obtain certain Tonopah books and records.85 According to SolarReserve,

these provisions create ambiguity concerning its membership status such that it is

reasonably conceivable that it may seek dissolution just as a member could.

          The fact SolarReserve knew how to retain rights, while giving up others, does

not engender a sense that equity is needed here to vest SolarReserve with rights for

which it did not bargain.86 Tonopah is a “creature[] of contract, [and] I must enforce

[its] LLC agreement as written.”87 The LLC Agreement unambiguously states

Tonopah had one “sole member”—which was not SolarReserve.88 Under these

circumstances, SolarReserve cannot swoop in on the wings of equity as if it were a

Tonopah member to impose its preferences for the Company’s future when it

bargained away that status.89


84
     Tr. at 29.
85
  LLC Agreement §§ 1.1 (definitions of “SolarReserve Sponsor” and “Sponsor Entity”),
7.2.
86
  Norton v. K-Sea Transp. P’rs L.P., 67 A.3d 354, 364 (Del. 2013) (declining to infer that
an omission resulted from “sloppy drafting” when an LPA’s drafters “knew how to impose
an affirmative obligation when they so intended”).
87
  Touch of Italy Salumeria & Pasticceria, LLC v. Basico, 2014 WL 108895, at *4 (Del. Ch.
Jan. 13, 2014).
88
     LLC Agreement at 1 (recitals).
89
  Norton, 67 A.3d at 364; In re Shorenstein Hays-Nederlander Theatres LLC Appeals, 213
A.3d 39, 56 (Del. 2019) (stating that courts “interpret contracts as a whole [by giving] each
provision and term effect, so as not to render any part of the contract mere surplusage”).
                                             20
                            III. CONCLUSION

      For the foregoing reasons, Defendant’s Motion to Dismiss must be

GRANTED.

      IT IS SO ORDERED.




Delaware LLCs respect the principle that “one generally is entitled to select his own
business associates in a closely held enterprise.” Achaian, Inc. v. Leemon Family LLC,
25 A.3d 800, 804 n.14 (Del. Ch. 2011). That the LLC Agreement’s drafters opted to
include “choose your partner” provisions is yet another factor weighing against
SolarReserve’s right to seek dissolution. LLC Agreement §§ 3.5, 8.1.



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