Dysart v. Dragpipe Saloon, LLCAnnotate this Case
The Supreme Court reversed the judgment of the circuit court ordering dissolution and the sale of Dragpipe Saloon, LLC's assets, holding that the drastic remedy of judicial dissolution was not supported by the evidence in this case.
In their efforts to sell their membership interests two members of Dragpipe requested judicial dissolution and an order authorizing the sale of Dragpipe's assets. The circuit court granted the request for dissolution, concluding that judicial dissolution was authorized under S.D. Codified Laws 47-34A-801(a)(4)(i) and (iii) because Dragpipe's economic purpose was unreasonably frustrated and because it was not reasonably practicable to carry on its business under the provisions of the operating agreement. The Supreme Court reversed, holding (1) the circuit court erred in its interpretation of the operating agreement and in its application of sections 47-34A-801(a)(4)(i) and (iii); and (2) the economic purpose was not likely to be unreasonably frustrated by Dragpipe's continued operation, and the LLC was operating within the purposes stated in the operating agreement.