Olson v. Halvorsen

Summary

Post-trial oral arguments after Vice Chancellor Lamb ruled the statute of frauds applied to an LLC agreement.

Brian Olson was one of three co-founders of long/short equity hedge fund Viking Global Management, along with David Ott and Andreas Halverson. Olson sought to recover pursuant to a termination provision in an LLC agreement that provided for various equity and income splits among the three owners, but gave Halverson majority rights.

Viking generated revenue by charging a 1.5% management fee for funds invested, plus 20% of any profits gained.

Outcome

Found that if an LLC agreement contains a provision or multiple provisions which cannot possibly be performed within one year, such provision or provisions are unenforceable.