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EFiled:  Mar 07 2013 04:06PM EST   Transaction ID 49979594  Case No. 4113VCN    

COURT OF CHANCERY OF THE STATE OF DELAWARE
JOHN W. NOBLE VICE CHANCELLOR 417 SOUTH STATE STREET DOVER, DELAWARE 19901 TELEPHONE: (302) 739-4397 FACSIMILE: (302) 739-6179

February 28, 2013 Revised March 7, 2013

John V. Fiorella, Esquire Jennifer L. Dering, Esquire Archer & Greiner, P.C. 300 Delaware Avenue, Suite 1370 Wilmington, DE 19801 Re:

Christopher Viceconte, Esquire Gibbons P.C. 1000 N. West Street, Suite 1200 Wilmington, DE 19801

Ross Holding and Management Company, et al. v. Advance Realty Group, LLC, et al. C.A. No. 4113-VCN Date Submitted: November 1, 2012

Dear Counsel: Plaintiffs own units of Defendant Advance Realty Group, LLC ("ARG"), a New Jersey-based real estate development enterprise. The Individual Plaintiffs were high-ranking executives of ARG until their termination in 2007. The Entity Plaintiffs are owned by Individual Plaintiffs. A wide range of claims has been asserted. Two require attention at this point. First, the Plaintiffs complain about ARG's refusal to redeem their units at market value. Second, the Plaintiffs



Ross Holding and Management Company, et al. v. Advance Realty Group, LLC, et al. C.A. No. 4113-VCN February 28, 2013; Revised March 7, 2013 Page 2 challenge the Conversion and Exchange Agreement (the "Conversion

Agreement"), adopted in September 2008, which involved a capital restructuring of ARG. The Plaintiffs claim that the Conversion Agreement materially and adversely affected the value of their ARG holdings because other Defendants who control ARG diverted its assets for their benefit.1 The Defendants have moved for partial summary judgment on nine grounds.2 Before turning to each of the reasons sponsored by the Defendants, the standards governing the Court's consideration of a motion for partial summary judgment should be briefly reviewed. Summary judgment, governed by Court of Chancery Rule 56, requires the Court to view the facts in the light most favorable to the nonmoving party.3 The moving party must demonstrate that there is no material question of fact.4 Then, the moving party may prevail on its motion if it is
1

This incomplete summary of the dispute provides sufficient context for the matters before the Court. A fuller development of the background may be found at Ross Hldg. & Mgmt. Co. v. Advanced Realty Gp., LLC, 2010 WL 1838608, at *1-4 (Del. Ch. Apr. 28, 2010) (Defendants' Motion for Judgment on the Pleadings) and Ross Hldg. & Mgmt. Co. v. Advanced Realty Gp., LLC, 2010 WL 3448227, at *1-2 (Del. Ch. Sept. 2, 2010) (Plaintiffs' Motions to Amend Their Complaint and for the Appointment of a Receiver). 2 The parties waived oral argument on the Defendants' motion for partial summary judgment. 3 Merrill v. Crothall-Am., Inc., 606 A.2d 96, 99 (Del. 1992); see also Cerberus Int'l., Ltd. v. Apollo Mgmt., L.P., 794 A.2d 1141, 1150 (Del. 2002). 4 Whittington v. Dragon Gp. L.L.C., 2008 WL 4419075, at *3 (Del. Ch. June 6, 2008).

Ross Holding and Management Company, et al. v. Advance Realty Group, LLC, et al. C.A. No. 4113-VCN February 28, 2013; Revised March 7, 2013 Page 3 entitled to judgment as a matter of law. 1. The Unopposed The Defendants have sought dismissal of (i) Defendant Rothschild Realty, Inc. for lack of personal jurisdiction; (ii) the Plaintiffs' claim for punitive damages for lack of subject matter jurisdiction; and (iii) the Plaintiffs' claims for attorneys' fees and costs because they have not demonstrated any basis for fee shifting.5 The Plaintiffs do not contest these aspects of the Defendants' motion,6 and partial summary judgment will be entered as to each of these elements.7 2. The Unit Holders Agreements The Plaintiffs have alleged that ARG breached the Unit Holders Agreements by failing to repurchase their Class A units of ARG when the Individual Plaintiffs were terminated. The Unit Holders Agreements provide that, upon termination, "[ARG] may repurchase some or all of the Units of Investor" under certain terms.8 The use of the word "may," as contrasted with the word "shall," denotes a

5 6

The Court does not understand the Defendants' motion to reach traditional "court costs." Pls.' Br. in Opp'n to Defs.' Mot. for Summ. J. ("Pls.' Br.") 5. 7 This conclusion moots the balance of the motion on behalf of Defendant Rothschild Realty, Inc. to the extent that it sought an analysis of the merits of the claims against it. 8 Aff. of Joseph A. Martin, Esq. ("Martin Aff.") Ex. 8 (the "Unit Holders Agreement")

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