Recently, in Kundrun v. AMCI Group, LLC, the Delaware Court of Chancery resolved a dispute at the intersection of corporate governance and litigation control by closely examining the intended allocations of authority within a company’s LLC agreement.  The Court focused on the agreement’s division of authority among the company’s (i) two equal-equity owners, who comprised the company’s two-member board vested with management authority, and (ii) an executive chairman—one of the two board members—with authority to manage the day-to-day operations of the business.  Reading the agreement as a whole, the Court concluded that it did not authorize one member of a deadlocked, evenly split board to direct the actions of company counsel when the matter at issue falls outside the business’s day-to-day operations.  In resolving the issue, the Court reaffirmed the long-standing principle that, when a company board is evenly deadlocked in a dispute that effectively is bilateral, company counsel must stay neutral and may not side with one board member or faction over another.

(more…)