Pepsi-Cola Bottling Co. v. Handy

Randall Handy (defendant), acting through his own corporation, contracted to buy land for development along with Michael Ginsburg and Larry McKinley, then learned the land contained wetlands that hurt its value, but did not disclose this when granting Pepsi-Cola Bottling Company (plaintiff) an option to purchase it. Handy, Ginsburg, and McKinley then formed an LLC, Willow Creek, which bought the property for $174,000 and, four months later, sold it to Pepsi for $455,000. After discovering the undisclosed wetlands, Pepsi sued Handy, Ginsburg, McKinley, and the entities for rescission and damages, and the individual members moved to dismiss, arguing Delaware's LLC statute shielded them from personal liability.