A recent Delaware Court of Chancery decision interpreted an ambiguous LLC agreement that it described–at least “at first read”–as “confusing and internally inconsistent.” The decision in MKE Holdings Ltd. v. Schwartz, C.A. No. 2018-0729-SG (Del. Ch. Sept. 26, 2019), in addition to being a helpful analysis for purposes of providing an insight into how the court analyzes an agreement that is not self-explanatory, will remain noteworthy because its introductory paragraph should be required reading for any lawyer who drafts an LLC operating agreement.  The introduction to the referenced opinion provides as follows:

“This matter requires me to construe an LLC operating agreement. My father was an engineer.  He frequently remarked that machinery would not be so poorly designed if the designer were condemned personally to keep it operating.  I am a lawyer.  I am struck that LLC agreements would be better drafted if the drafters were compelled to litigate over them, or worse, construe them as judges.  In any event, such is the task I must undertake here.” (footnotes omitted.)