In Staiger v. Holohan, 100 A.3d 622 (Pa. Super. 2014), a Pennsylvania appellate court found that a trial court could order the dissolution of a profitable Pennsylvania Limited Liability Company (“LLC”).
The facts of the case are simple and fairly straightforward. Plaintiff Michael Staiger (“Staiger”) and Defendant Kevin Holohan (“Holohan”) formed two Pennsylvania LLCs: 200 East Airy, LLC (“200 East Airy”) and Green and Airy Laundromat, LLC (“Laundromat”). Stainger lent 200 East Airy $165,000, to be used as start-up capital. The members agreed in writing that Stainger would be repaid the start-up money within five years. Both men owned 50% of both 200 East Airy and Laundromat. Both 200 East Airy’s and Laundromat’s operating agreements contained identical language which set forth that the members (Holohan & Stainger) have the authority to make business decisions and the decisions of a majority are controlling. Shortly after forming Laundromat, the members executed an agreement which provided that another unnamed LLC of Holman’s was to manage Laundromat for a fee for an initial term of five years, then continue for two additional five-year periods.