Title: In re Reinz Wisconsin Gasket, LLC, a cancelled Delaware limited liability company

State: delaware

Issuer: Delaware Supreme Court

Document:

IN THE SUPREME COURT OF THE STATE OF DELAWARE 
 
IN RE REINZ WISCONSIN 
GASKET, LLC, a cancelled 
Delaware limited liability company. 
§  No. 197, 2023 
§   
§  Court Below—Court of Chancery  
§  of the State of Delaware 
§   
§  C.A. No. 2022-0859 
§ 
 
  Submitted:   June 2, 2023 
 
 
 
 
      Decided:      July 10, 2023  
 
Before VALIHURA, TRAYNOR, and LEGROW, Justices. 
 
ORDER 
 
 
 
Upon consideration of the amended notice of interlocutory appeal and the 
attached exhibits, it appears to the Court that: 
(1) 
This interlocutory appeal arises from the Court of Chancery’s letter 
opinion, dated May 8, 2023, holding that a cancelled entity cannot retain counsel to 
represent it (“Letter Opinion”).  Petitioner Linda A. Cook (“Petitioner”), 
individually and as executor of the Estate of Roland Cook, filed a petition to nullify 
the certificate of cancellation and to appoint a receiver for Reinz Wisconsin Gasket, 
LLC (“RWG”), a defendant in asbestos litigation pending in the United States 
District Court for the District of Massachusetts.  Richards, Layton & Finger, P.A. 
(“Counsel”) appeared on behalf of  RWG in the Court of Chancery action.   On 
March 20, 2023, the Court of Chancery issued a post-trial opinion holding that 
Petitioner had established good cause for appointment of a receiver and deferring 
2 
 
whether to nullify RWG’s certification of cancellation until submission of the 
receiver’s report.1  Before the parties submitted the names of three possible 
receivers, the court asked the parties to address how a cancelled entity could retain 
counsel and oppose appointment of a receiver and nullification of its cancellation.2   
(2) 
On March 31, 2023, Petitioner filed a Motion to Determine Proper 
Respondent and Counsel (“the Motion”).  Petitioner argued that as a cancelled 
company RWG could not take a position in the matter or retain counsel until a 
receiver was appointed.  Petitioner sought to strike the appearance of Counsel, 
prohibit Counsel from representing any related entities, and to submit her preferred 
receivers unilaterally.  RWG opposed the Motion. 
(3) 
On May 8, 2023, the Court of Chancery granted the Motion in part in 
the Letter Opinion.3  The court held that a cancelled entity “cannot participate in the 
process of appointing its own receiver or retain counsel to do so” and concluded that 
Counsel “never actually represented RWG before this Court,” leaving “it to Counsel 
to withdraw their purported appearances.”4  The court directed Petitioner to submit 
the names of three possible receivers, but declined to rule on Petitioner’s “request to 
 
1 In re Reinz Wisconsin Gasket, LLC, 2023 WL 2568326 (Del. Ch. Mar. 20, 2023). 
2 Id. at *2 n.21. 
3 In re Reinz Wisconsin Gasket, LLC, 2023 WL 3300042 (Del. Ch. May 8, 2023). 
4 Id. at *4-5. 
3 
 
disqualify Counsel from representing any other interested party unless and until 
Counsel enters their appearance.”5 
(4) 
On May 15, 2023, RWG, as represented by Counsel, filed an 
application for certification of an interlocutory appeal of the Letter Opinion and a 
motion for stay of further proceedings.  Petitioner opposed the application and 
motion.  On June 2, 2023, the Court of Chancery denied the application for 
certification and motion for stay.    
(5) 
In denying certification, the court initially noted that the application for 
certification lacked the required “statement that the applicant and the applicant’s 
counsel have determined in good faith that the application meets the criteria” of Rule 
42(b)(iii). The court next found that the Letter Opinion did not decide a substantial 
issue of material importance because it did not decide the merits of the underlying 
petition.  Finally, the court considered the Rule 42(b)(iii) criteria.   
(6) 
Counsel argued that Rule 42(b)(iii)(A), Rule 42(b)(iii)(B), and Rule 
42(b)(iii)(H) weighed in favor of certification.  The Court of Chancery disagreed, 
finding that Rule 42(b)(iii)(A) (a question of law resolved for the first time) weighed 
against certification because the court had simply applied Delaware law to the 
question of a cancelled entity’s retention of counsel.   The court also rejected 
Petitioner’s reliance on Rule 42(b)(iii)(B) (conflicting trial court decisions on the 
 
5 Id.  
4 
 
question of law) because Delaware courts had not directly addressed whether a 
cancelled entity could retain counsel until the Letter Opinion.  As Rule 42(b)(iii)(H) 
(review of the interlocutory order may serve considerations of justice), the court 
concluded that other cases in which disqualification of counsel has been considered 
on interlocutory appeal were distinguishable.  The court rejected Counsel’s 
contention that cancelled entities would lose their voice in receivership actions, 
emphasizing that decisionmakers behind a cancelled entity could still enter their own 
appearances.6  The court also reviewed the remaining Rule 42(b)(iii) criteria and 
determined that all of those criteria weighed against certification. 
(7) 
The court next considered the motion for stay.  Applying the four 
factors in Kirpat, Inc. v. Delaware Alcoholic Beverage Control Commission,7 the 
court concluded that a stay was unwarranted.   
(8) 
Applications for interlocutory review are addressed to the sound 
discretion of the Court.8  In determining whether to accept an interlocutory appeal, 
this Court may consider all relevant factors, including the trial court’s decision about 
whether to certify an interlocutory appeal.9  We agree with the Court of Chancery 
that the Rule 42(B)(iii) criteria do not weigh in favor of interlocutory review and 
 
6 The Court of Chancery docket reflects that, on June 13, 2023, RWG’s sole member filed a motion 
to intervene. 
7 741 A.2d 356 (Del. 1998). 
8 Supr. Ct. R. 42(d)(v). 
9 Id. 
5 
 
that the potential benefits of interlocutory review do not outweigh the inefficiency, 
disruption, and probable costs caused by an interlocutory appeal. 
NOW, THEREFORE, IT IS ORDERED that the interlocutory appeal is 
REFUSED.   
BY THE COURT: 
 
 
 
 
 
 
 
/s/ Gary F. Traynor  
 
 
 
 
 
 
Justice