VGS, Inc. v. Castiel

David Castiel (plaintiff) formed Virtual Geosatellite LLC to pursue an FCC license, later admitting Ellipso and Sahagen Satellite as additional members alongside Castiel's own Holdings entity, which together with Ellipso (both Castiel-controlled) held 75 percent of the LLC's equity to Sahagen's 25 percent. A three-manager board ran the LLC, with Castiel empowered to appoint and remove two managers and Sahagen the third; after Castiel named himself and Tom Quinn as his two managers, Sahagen convinced Quinn that Castiel couldn't run the LLC properly, and Sahagen and Quinn, without any notice to Castiel, merged the LLC into VGS, Inc. (defendant), ending the LLC's existence and diluting Holdings' and Ellipso's combined 75 percent interest down to 37.5 percent of VGS while boosting Sahagen's stake to 62.5 percent. Sahagen and Quinn admitted the sole reason they excluded Castiel from notice was that he would have removed Quinn as manager and blocked the merger if he'd known. Castiel sued.