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1
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MEMORANDUM OPINION
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EXTRACTED KEY WORDS
MATTES INSPECTION RESTAURANTS PAUL TESTIMONY CHECKERS ASSETS STORES PURPOSE DELAWARE DEMAND COSTS EVIDENCE DEFENDANT COMPLAINT FRANCHISEE VENDOR REBATES PAUL AUGER LOAN TRANSACTION AGREEMENT ATTORNEYS MISMANAGEMENT PAUL AUGER VAN HAWKINS WILMINGTON VICE CHANCELLOR CORPORATION ILAW MERITORIOUS TECHNICAL DEFENSES PROPER PURPOSE |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY d
CRAIG MATTES, >>
Plaintiff, 1>
V. > C.A. No. 17775
>
CHECKERS DRIVE-IN >
RESTAURANTS, INC., >> I : c: .-
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_^. ,,.,< P-s
Defendant. > 5.: !_ ) -`A
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MEMORANDUM OPINION ',,,i; Ej
Submitted: January 29, 2001
Decided: March 28, 2001
Paul A. Bradley,, Esquire, McCARTER & ENGLISH, LLP, `Wilmington,
Delaware, Attorneys for PlaintifS
Jesse A. Finkelstein, Esquire, Raymond J. DiCamillo, Esquire, and Peter B.
Ladig, Esquire, YRICHARDS, LAYTON & FINGER, `Wilmington, Delaware,
Attorneys for Defendant
LAMB, Vice Chancellor
This is an action pursuant to Section 220 of the Delaware General
Corporation ILaw ("DGCL") seeking the inspection of corporate books and
records. The complaint was originally filed on February 8, 2000. It was
subject to meritorious technical defenses and was dismissed with leave to
refile.' On Nlovember 22, 2000, plaintiff filed his Second Amended
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2
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POST HEARING BRIEF FOR PLAINTIFF
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EXTRACTED KEY WORDS
CHECKERS PLAINTIFF RESTAURANTS CORPORATE MISMANAGEMENT COURT CRAIG MATTES WASTE DELAWARE INSPECTION PURPOSE DEL CREDIBLE BASIS BOOKS CHECKERS DRIVE-IN STOCKHOLDER PROPER PURPOSE CITATIONS NATURE SECURITV FIRST FRANCHISE UNDISPUTED FACTS STOCK EXCHANGE TRIAL TRANSCRIPT DEMAND LETTER JOINT VENTURE BALANCE SHEETS AGREEMENT TESTIMONY FINANCIAL STATEMENTS |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
CRAIG MATTES,
Plaintiff, : C.A. No. 17775 NC
V .
CHECKERS DRIVE-IN RESTAURANTS, INC., :
Defendant.
POST HEARING BRIEF FOR PLAINTIFF CRAIG MATTES
-23
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McCARTER & ENGLISI&LL$ : `.=
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b.~
W< ..p
PAUL A . BRADLEY -";;a -& --"
Mellon Bank Center, Su& 95r
919 Market Street
P.O. Box 111
Wilmington, Delaware 19899
(302) 654-2194
Attorneys for Plaintiff
Craig Mattes
Dated: January 24,200l
TABLE OF
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3
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ANSWER
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EXTRACTED KEY WORDS
COMPLAINT PARAGRAPH ALLEGATIONS DEFENDANT DENIES PLAINTIFF REFERS DEFENDANT ADMITS COURT CHECKERS RESPONSE INSPECTION EXHIBIT COUNSEL BOOKS STATUTORY HAND DELIVERY CHECKERS DRIVE-IN RESTAURANTS ATTORNEYS HEREBY FIRST SENTENCE DEFENDANT LACKS KNOWLEDGE STOCK AUTHORIZATION PROPER PURPOSE REFERS TILE COURT EXA ACT DEMAND THIRD SENTENCE |
IN THE COURT OF CHANCER.Y OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
CRAIG MA,TTES, >
V. ; C.A. No. 17775
CHECKERS DRIVE-IN RESTAURANTS,
rNC.,
i
Defendant. >
&VSWER
Defendant Checkers Drive-In Restaurants, Inc., ("Checkers") by and through its attorneys,
hereby answers plaintiffs Second Amended Complaint For Inspection of Corporate Records (the
`Complaint") as follows:
1. Defendant lacks knowledge or information sufficient to form a belief as to the
allegations of the first sentence of paragraph 1 of the Complaint. Defendant lacks knowledge or
inforrr ation sufficient to form a belief as to the allegations of the second sentence of
the Complaint except it is admitted that plaintiff appears as a record holder of shares of common
stock of Checkers on the stock list of Checkers on or about May 30,200O.
2. Defendant admits the allegations of paragraph 2 of the Complaint.
3. Defendant admits that it received a letter dated August 9, 1999, and respectfully
:refers the C!ourt to that letter (D.I. 7, E.K. A) for its terms. To the extent required, Defendant
all other allegations of paragraph 3 of the Complaint.
4. Defendant admits that it received a letter dated September 1, 1999, and
refers the Cou.rt to that letter for its terms. (D.I. 7, Ex. A). Defendant admits that a purported
authorization accompanied the letter dated September 1, 1999. To the extent required, Defendant
denies all other allegations of paragraph 4 of the Complaint.
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4
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SECOND AMENDED COMPLAINT FOR INSPECTION OF RECORDS
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EXTRACTED KEY WORDS
DEFENDANT COUNSEL INSPECTION DEMAND COURT REQUEST RESTAURANT DELAWARE PROPER PURPOSE CHECKERS DRIVE-IN RESTAURANT ESQUIRE DEL CORPORATION MISMANAGEMENT WASTE ORDER DIRECTING DEFENDANT CRAIG MATTES PURSUANT WILMINGTON PERMIT EXHIBIT SHAREHOLDER STOCK CERTIFICATES BRANDT SCHEDULE AUTHORIZATION PLAINTIFF ALLEGES BOOKS CORRECI |
IN THE COURT OF CHANCERY OF THE STAT113 OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
CRAIG MATTES,
Plaintiff,
: C . A.NCl.: 17775NC
vs.
CHECKERS DRIVE-IN RESTAURANTS, INC., :
Defendant.
SECOND AMENDED COMPLAINT i .
FOR INSPECTION OF CORPORATE RECORDS . I
_ _ _ _ _ _ _
1. At all times relevant to this action, Plaintiff, Craig Mattes, has been a
of Checkers Drive-In Restaurants, Inc. On or about June 2, 2000, the stock certificates held in
his account under a street name, pursuant to industry custom and practice, were issued to the
Plaintiff and registered in his name.
2. At all times relevant to this action Defendant, Checkers Drive-In Restaurant,
was a general corporation organized under the laws of the State of Delaware. Defendant can be
served b:y serving the Corporation Service Company, 1013 Centre Road, Wilmington, Delaware
19805.
3. On August 9, 1999, Plaintiff, through his counsel, Ellen F. Brandt, Esquire
("Plaintiffs counsel"), sent a letter to Defendant requesting that a date certain be scheduled for
the purpose of pennitting Plaintiff to view the corporation b'ooks and records of Defendant
pursuant to 8 Del. C. 4220.
4. On September 1, 1999, Plaintiffs counsel sent a letter to Defendant's counsel,
Andrew D. Simons, Esquire ("Defendant's counsel"), again reqLiesting that Defendant permit
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5
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LETTER OPINION
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EXTRACTED KEY WORDS
COMPLAINT STATUTORY MATTES CHECKERS DISMISS DEL ATTORNEY REASONS PLAINTIFF ESQUIRE CHECKERS DRIVE-IN DEFENDANT MANDATE HARTNETT PROPER FORM LITIGATION ASSERTION DEFENSES COURT AMEND CHECKERS DRIVE-IN RESTAURANTS MOTION AMENDED COMPLAINT OATH ACCOMPANY POWER FAILURE STRICT ADHERENCE PROMPT |
C O U R T O F C H A N C E R Y
OF THE
S TATE OF D E L A W A R E
S TEPHEN P. L A M B C O U R T H O
VICE-CHANCELLOR W I L M I N G T O N ,
November 15,200O
Paul A. Bradley, Esquire
McCarter & English, LLP
Mellon Bank Cente,r Suite 950
919 Market Street
P.O. Box 111
Wilmington, DE 19899
Jesse A. Finkelstein, Esquire
Raymond J. DiCamillo, Esquire
Peter B. Ladig, Esquire
Richards, Layton & Finger
One Rodney Square
P.O. Box 551
Wilmington, DE 19899
RE: Craig Mattes v. Checkers Drive-In Restaurants, Inc.
C.A. No. 17775
Gentlemen:
This is an action under Section 220 of the Delaware General Corporation
Law to compel defendant, Checkers Drive-In Restaurants, Inc., to make certain
documents available for inspection and copying by plaintiff, Craig Mattes, or his
attorneys or agents. Checkers has filed a timely motion to dismiss the Amended
Complaint on the ground that Mattes's demand did not comply with the statutory
requirements of 6 220. Because Mattes's demand failed to comply with the
mandate of the statute, the motion to dismiss will be granted and the Amended
Complaint will be dismissed. Haber v. Harnischfeber.'
' Del. Ch., C.A. No. 6930, Hartnett, V.C. (Feb. 3, 1983).
Maus v. Checkers Drive-In Restummts, Inc.
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6
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REPLY IN SUPPORT OF MOTION TO DISMISS
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EXTRACTED KEY WORDS
DEMAND DISMISS COURT DEFENDANT ATTORNEY DEL POWER FAILURE STATUTORY COMPLAINT CHECKERS ORIGINAL POWER RECORD HOLDER AUTHORITY OPP COMPLIANCE PROVISIONS OBJECTION INVALID DELAY CURE MOTION MISTAKES BOOKS ARGUE LITIGATION BENEFICIAL OWNERS SUPR DELAWARE SUPREME COURT |
IN THE COURT OF CHANCERY OF `THE STATE OF DELAWARE 16
IN AND FOR NEW CASTLE COUNTY
CR~AIG MATTES,
Plainl:iff,
;
v. ) CA. No. 17775
1
CHECKERS DRIVE-IN RESTAURANTS, )
INC.,
;
Defendant. 1
REPLY YN SUPPORT OF MIDTION TO DISMISS
Defendant Checkers Drive-In Restaurants, Inc. ("Checkers" or the "Company") hereby
submits this reply in support of its motion to dismiss::
1. Plaintiff concedes that he has failed to comply with the requirements of 8 Del. 5
220 by admiuing that a power of attorney authorizing his attorney to make a demand did not
accompany the operative demand letter. (Plaintiffs' Memorandum In Opposition to Defendant's
Motion to Dismiss ("Pl. Opp.") 11:2,4). Yet, plaintiff asks the Court to excuse his mistakes and
ignore the statutory requirements of Section 220.' Plaintiffs arguments must fail and the Amended
Complaint must be dismissed.
2. In his answering brief, plaintiff stat'es that "[tlhe September 12, 2000 demand
complied with 8 Del. 5 220 in all respects except that the Power of Attorney was not enclosed
with the demsnd." (Pl. Opp. 74). T:hus, it is undisputed that the operative demand does not comply
with Section 220. This concession is fatal to plaintiffs case. Section 220 requires compliance with
all of its provisions, not most of its provisions or whichever provisions a stockholder deems
`Capitalized temrs in this me:morandum have the same definitions as in Defendant's
to Dismiss unless otherwise noted.
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7
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PLAINTIFFS MEMORANDUM IN OPPOSITION TO MOTION TO DISMISS
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EXTRACTED KEY WORDS
ATTORNEY DEMAND MATTES COURT AUTHORITY PLAINTIFF DEFENDANT DISMISS ACT BRANDT DEL ENCLOSE AMENDED COMPLAINT DELAWARE MOTION PREJUDICE DEFECT STATUTORY REQUIREMENT PLAINTIFF REQUESTS CRAIG MATTES MEMORANDUM COUNSEL SHAREHOLDER AFFIDAVIT VERIFYING PURPOSE INSPECTION ACTING RESPONSE ALLEGATIONS |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
CRAIG MATTES,
Plaintiff, : C.A. No. 17775 NC
V.
CHECKERS DRIVE-IN RESTAURANTS, INC., :
Defendant.
PLAINTIFF'S MEMORANDUM IN
OPPOSITION TO DEFENDANT'S MOTION TO DISMISS
McCARTER & ENGLISH, LLP
PAUL A. BRADLEY
Mellon Bank Center, Suite 950
919 Market Street
Wilmington, IDelaware 19801
(302)654-X9,4
Attorneys for Plaintiff
IN THE COURT OIF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
CRAIG MATTES,
Plaintiff, : C.A. No. 17775 NC
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8
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MOTION TO DISMISS
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EXTRACTED KEY WORDS
PLAINTIFF COMPLAINT ATTORNEY POWER BRANDT INSPECTION PURPORTING BOOKS AMENDED COMPLAINT STOCKHOLDER DISMISS ACCOMPANY AUTHORIZING CHECKERS STATUTORY OATH REQUEST DEL COMPLIANCE COMPL PROPER MATTES STOCK STATUTORY PREREQUISITES CURE SLIP ALLEGE AFFIDAVIT PURPOSE |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
CRAIG MATTES,
Plaintiff,
i
V. ) CA. No. 17775
CHECKERS DRIVE-IN RESTAURANTS, ;
INC.,
;
Defendant. 1
MOTION TO DISMISS
Defendant Checkers Dlrive-In Restaurants, Inc. ("Checkers" or the "Company!`) hereby
r
submits this memorandum of law in support of its motion to dismiss: <
INTRODUCTION
1. Plaintiff Craig Mattes, a former executive of the Company, has sought to
books and records of the Company during the time period in which he was an officer of the
Company. Not once, however, has plaintiff complied with the statutory requirements of Section 220
of the General Corporation Law of the State of Delaware ("Section 220"). Because of plaintiffs
failure to adhere to the requirements of Section 220, the Amended Complaint must be dismissed.
STATEMENT OF FACTS
2. On August 9,1999, plaintiffpurported to demand inspection of the books and
of the Company pursuant to a letter sent by his attorney, Ellen F. Brandt (the "August 9 Demand").
(Amended Complaint ("Am. Compl.") Ex. A). The August 9 Demand was not made under oath, nor
was it accompanied by a power of attorney indicating that Ms. Brandt had authority to make such
demand. Moreover, the August 9 Demand failed to specify any purpose, let alone a proper one, for
such inspection, other than stating it was plaintiffs "right to do so as a Checker's shareholder."
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9
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AMENDED COMPLAINT FOR INSPECTION OF CORPORATE RECORDS
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EXTRACTED KEY WORDS
DEFENDANT COUNSEL INSPECTION REQUESTING COURT RESTAURANT DEMAND PROPER PURPOSE PERMIT CORPORATION MISMANAGEMENT WASTE ORDER DIRECTING DELAWARE CHECKERS DRIVE-IN RESTAURANTS EXHIBIT EXPENDITURES CRAIG MATTES TIMES RELEVANT SHAREHOLDER STOCK SCHEDULE BOOKS PURSUANT DEL CORRESPONDENCE PLAINTIFF ALLEGES SENTEMBER COPVING DEMANDED MATERIALS |
IIN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
CRAIG MATTES,
Plaintiff,
: C. A. NO.: 17775 NC .I
VS. I
CHECKERS DRIVE-IN RESTAURANTS, INC., : ;,.
Defendant. " .
ALMENDED COMPLAINT
FOR INSPECTION OF CORPORATE RECORDS
1-. At all times relevant to this action, Plaintiff, Craig Mattes, has been a
of Checkers Drive-In Restaurants, Inc. On or about June 2. 2000. the stock certificates held b
his account under a street namunusuant to industrv custom and practice. were issued to the
mintiff and registered in his name..
2. At all times relevant to this action Defendant, Checkers Drive-In Restaurant,
was a genelral corporation organized under the laws of the State of Delaware. Defendant can be
served by serving the Corporation Service Company, 1013 Centre Road, Wilmington, Delaware
19805.
3. On August 9, 1999, Plaintiff, through his counsel, Ellen F. Brandt, Esquire
("Plaintiffs counsel"), sent a letter to Defendant requesting that a date certain be scheduled for
the purpose of permitting Plaintiff to view the corporation books and records of Defendant
pursuant to 8 Del. C. $220. All correspondence referenced herein is attached as Exhibit "A",
except the September 12,200O demand letter is which is Exhibit B.
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10
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COMPAINT FOR INSPECTION OF CORPORATE RECORDS
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EXTRACTED KEY WORDS
INSPECTION REQUESTING COUNSEL STOCK CHECKERS PURPOSE CORPORATE BOOKS DEFENDANT PLAINTIFF RESTAURANTS COURT MISMANAGEMENT CRAIG MATTES DELAWARE SHAREHOLDER PROPER PURPOSE SCHEDULE SIMONS DEPRECIATION DRIVE-IN RESTAURANTS PERMIT PRICE DIRECTORS ANDREW DECLINE SENIOR VICE PRESIDENT BRANDT ANNUAL REPORTS LEGAL PROCEEDINGS |
I `- , ~
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
CRAIG MATTES,
Plaintiff, \
: C.A. No.: py?5&
V. I
CHECKERS DRIVE-IN
RESTAURANTS, INC.
r: I.
Defendant. c4
COMPLAINT FOR INSPECTION OF CORPORATE RECORDS
1. At all times relevant to this action, Plaintiff Craig
Mattes has been a shareholder of Checkers Drive-In Restaurants,
Inc.
2 . At all time relevant to this action Defendant Checkers
Drive-In Restaurants, Inc. was a general corporation organized
under the laws of the State of Delaware. Defendant can be served
by serving the Corporation Service Company, 1013 Centre Road,
Wilmington, Delaware 19805.
3 . On August 9, 1999, Plaintiff, through his counsel, Ellen
F. Brandt, Esquire, ("Plaintiff's counselN), sent a letter to
Defendant requesting that a date certain be scheduled for the
purpose of permitting Plaintiff to view the corporation books and
records of Defendant pursuant to 8 Del. C. 522O.l
`All correspondence referenced herein is attached as Exhibit A.
1
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