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1
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MEMORANDUM OPINION
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EXTRACTED KEY WORDS
COUNTERCLAIM SHARES PLAINTIFFS PMBC COURT VOTE DEFENDANTS STOCK CONSENT DELAWARE RELIEF AUTHORIZES MOTION CERTIFICATES DEL VOTING CONTENDS ISSUANCE ESQUIRES DIRECTORS FRAUD ORAL AGREEMENT PROCEEDING ENTERTAIN COMMON STOCK ALLEGES RESOLUTION GRANT CORE |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
RALPH J. CARBALLAL and
ROBERT D. HUGHES,
Plaintiffs, ....
V. .. C.A. No. 17058
..
PMBC CORP., a Delaware corporation, :
DOUGLAS T. MCCLURE, JR., THE :
PRIVATE MERCHANT BANKING :
SECURITIES CORP., a Delaware :
corporation, and FCHM, INC., a ..
Delaware corporation, ... _
. 1
Defendants. ..
_______________--__-----------------------------------. ...
PMBC CORP., a Delaware corporation, :
Counterclaim Plaintiff,
V.
RALPH J. CARBALLAL and ROBERT D. :
HUGHES, ..
Counterclaim Defendants.
MEMORANDUM OPINION
Date Submitted: May 11,1999
D
M a a
y 1 -4 , 1 9 9 9
Arthur L. Dent, Esquire, of POTTER, ANDERSON & CORROON, Wilmington,
Delaware; Attorney for Plaintiffs
Gregory P. Williams and Raymond J. DiCamillo. Esquires, of RICHARDS,
LAYTON & FINGER, Wilmington, Delaware; and William J. McSherry, Jr. and
Patrick J. Rohan, Esquires of BATTLE FOWLER LLP, New York, New York;
Attorneys for Defendant/Counterclaim Plaintiff PMBC Corp.
Martin P. Tully and Alan J. Stone, Esquires, of MORRIS, NICHOLS, ARSHT &
TUNNEL, Wilmington, Delaware; Attorneys for Defendant Douglas T. McClure, Jr.
SNIPPETS:
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2
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ANSWERING BRIEF OF DEFENDANT/COUNTERCLAIM PLAINTIFF PMBC IN OPPOSITION TO PLAINTIFFS MOTION TO SEVER
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EXTRACTED KEY WORDS
COURT PLAINTIFFS PROCEEDING COUNTERCLAIM DEFENDANTS DEL DELAWARE STOCK VALIDITY HUGHES MOTION SEVER FACTS MCCLURE WRITTEN CONSENT CHANCERY VOTING POWER STOCKHOLDERS DIRECTORS ELECTION CORPORATE ELECTION SECURITIES OPPOSITION COUNSEL COMMON STOCK HARTNETT INVERNESS MANAGEMENT FRAUDULENT DETERMINATION |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
RALPH J. CARBALLAL and ROBERT D. )
HUGHES, >>
Plaintiffs, >
>
V. ) C.A. No. 17058
>
PMBC CORP., a Delaware corporation, >
DOUGLAS T. MCCLURE, JR., THE >
PRIVATE MERCHANT BANKING >
SECURITIES CORP., a Delaware corporation, )
and FCHM, INC., a Delaware corporation, >>
Defendants. >
___--_-___-------__--------------------------------------- >
PMBC CORP., a Delaware corporation,
Counterclaim Plaintiff,
V. >
>
RALPH J. CARBALLAL and ROBERT D. )
HUGHES, )>
Counterclaim Defendants. >
ANSWERING BRIEF OF DEFENDANT/COUNTERCLAIM PLAINTIFF
PMBC CORP. IN OPPOSITION TO PLAINTIFFS' MOTION TO SEVER
OF COUNSEL:
William J. McSherry, Jr. Gregory P. Williams
Patrick J. Rohan Raymond J. DiCamillo
Battle Fowler LLP Richards, Layton & Finger
Park Avenue Tower One Rodney Square
75 East 55th Street P.O. Box 551
New York, New York 10022 Wilmington, Delaware 19899
(212) 856-7000 (302) 658-6541
Attorneys for
Dated: May 6, 1999 Plaintiff PMBC Corp.
RLFl-2006868-1
TABLE OF CONTENTS
SNIPPETS:
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3
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PLAINTIFFS MOTION TO SEVER
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EXTRACTED KEY WORDS
MCCLURE PLAINTIFFS HUGHES COURT COUNTERCLAIM STOCK DEFENDANTS ALLEGE DELAWARE CORPORATION ROBERT PURPOSES DEL STOCKHOLDERS EQUITABLE RELIEF DOUGLAS ATTORNEYS PLAINTIFF RALPH YORK PMBC BOARD SHAREHOLDER WRITTEN CONSENT AGREEMENT PROPER EXHIBIT REQUEST PURPORTING KEY TERMINATION PROVISIONS OFFICERS RESOLUTION OUTSTANDING STOCK |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
RALPH J. CARBALLAL and ROBERT >
D. HUGHES, >>
Plaintiffs, 111 C.A. No. 17058-NC
1
PMBC CORP., a Delaware corporation,
DOUGLAS T. MCCLURE, JR., THE
PRIVATE MERCHANT BANKING
SECURITIES CORP., a/k/a PMB
SECURITIES CORP., a Delaware
Corporation, and FCHM Inc., a
Delaware corporation,
Defendants.
PMBC CORP., a Delaware corporation,
and DOUGLAS T. MCCLURE, JR.,
Counterclaim >
Plaintiffs, >>
V. )>
RALPH J. CARBALLAL and 1
ROBERT D. HUGHES, and 1
PMBC CORP., a Delaware corporation, )>
Counterclaim )
Defendants. 1
NOTICE OF MOTION
To: Gregory P. Williams, Esquire Martin P. Tully , Esquire
Richards Layton & Finger Morris Nichols Arsht & Tunnel1
One Rodney Square 1201 N. Market Street
Wilmington, DE 19899 Wilmington, DE 19899
PLEASE TAKE NOTICE that the attached Motion will be presented at the
convenience of the Court and counsel.
ORROONLLP
SNIPPETS:
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4
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ANSWER AND COUNTERCLAIM OF CARBALLAL AND ROBERT D. HUGHES
|
EXTRACTED KEY WORDS
PMBC DEFENDANTS DELAWARE CORPORATION ALLEGATIONS SECURITIES COUNTERCLAIM HUGHES PARAGRAPH RESPONSE ROBERT PRIVATE MERCHANT BANKING PMB FCHM DEFENDANTS RALPH OFFICER YORK ATTORNEYS ESQUIRE WILMINGTON HAND DELIVERY GREGORY WILLIAMS RICHARDS LAYTON FINGER RODNEY SQUARE MARTIN MORRIS NICHOLS ARSHT TUNNEL1 MARKET STREET |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
RALPH J. CARBALLAL and ROBERT )
D. HUGHES, >>
Plaintiffs, >) C.A. No. 17058-NC
V.
PMBC CORP., a Delaware corporation,
DOUGLAS T. MCCLURE, JR., THE
PRIVATE MERCHANT BANKING
SECURITIES CORP., a/k/a PMB
SECURITIES CORP., a Delaware
Corporation, and FCHM INC., a
Delaware corporation,
Defendants.
PMBC CORP., a Delaware corporation, )
and DOUGLAS T. MCCLURE, JR., >>
Counterclaim >
Plaintiffs, >>
V. >
>
RALPH J. CARBALLAL and 1
ROBERT D. HUGHES, and >
PMBC CORP., a Delaware >
Corporation, >
>
Counterclaim >
Defendants. >
ANSWER OF PLAINTIFFS/COUNTERCLAIM
DEFENDANTS RALPH J. CARBALLAL AND ROBERT D. HUGHES
TO COUNTERCLAIM OF DEFENDANT/COUNTERCLAIM PLAINTIFF PMBC CORP.
67. The first two sentences of this paragraph are admitted. The remaining
allegations of the paragraph are denied, except it is admitted that PMB L.P. maintains a portfolio
of securities, equity interests and entitlements having a value exceeding $10 million.
68. Admitted, except it is denied that Carballal ceased to be a director and
of PMBC on March 11,1999.
SNIPPETS:
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5
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ANSWER OF PLAINTIFFS/COUNTERCLAIM DEFENDANTS
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EXTRACTED KEY WORDS
PMBC DEFENDANTS PARAGRAPH COUNTERCLAIM HUGHES MCCLURE DELAWARE CORPORATION FIRST SENTENCE FOWLER RESPONSE MARCUS YORK ATTORNEYS ESQUIRE WILMINGTON ROBERT DOUGLAS OFFICER SHARES ALLEGATIONS ADMIT DENY TAX SUBSEQUENT PAYMENTS COUNTERCLAIM SETS BUSINESS WHEREFORE PLAINTIFFS/COUNTERCLAIM DEFENDANTS REQUEST |
c., >
Plaintiffs, >) C.A. No. 1705%NC
V. >
>
PMBC CORP., a Delaware corporation, )
DOUGLAS T. MCCLURE, JR., THE >
PRIVATE MERCHANT BANKING 1
SECURITIES CORP., a/k/a PMB >
SECURITIES CORP., a Delaware >
Corporation, and FCHM INC., a >
Delaware corporation, >
>
Defendants. >
PMBC CORP., a Delaware corporation, )
and DOUGLAS T. MCCLURE, JR., >>
Counterclaim >
Plaintiffs, >>
V. >
>
RALPH J. CARBALLAL and >
ROBERT D. HUGHES, and >
PMBC CORP., a Delaware >
Corporation, >>
Counterclaim >
Defendants. >
ANSWER OF PLAINTIFFS/COUNTERCLAIM DEFENDANTS
RALPH J. CARBALLAL AND ROBERT D. HUGHES TO
COUNTERCLAIM OF DOUGLAS T. MCCLURE, JR.
54. Denied.
55. Admitted, except it is denied that Hughes ceased to be a director and officer of
PMBC on March 11, 1999.
56. Admitted, except it is denied that Carballal ceased to be a director and officer
SNIPPETS:
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6
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ANSWER AND COUNTERCLAIM
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EXTRACTED KEY WORDS
PMBC COMPLAINT MCCLURE ADMITS DENIES HUGHES DEFENDANT FOWLER STOCK DIRECTORS MARCUS SECURITIES PMB PLAINTIFFS THIRD SENTENCE OFFICER COUNTERCLAIM OUTSTANDING STOCKHOLDER RESPONSE SHAREHOLDERS EMPLOYEE PURSUANT RELIEF WRITTEN CONSENT REQUEST SECOND SENTENCES SHARES LETTERS |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
RALPH J. CARBALLAL and ROBERT )
D. HUGHES, ))
Plaintiffs, )1
V . ) C.A. No. 17058-NC
PMBC CORP., a Delaware ;
corporation, DOUGLAS T. )
MCCLURE, JR., THE PRIVATE 1
MERCHANT BANKING SECURITIES )
CORP., a/k/a PMB SECURITIES )
CORP., a Delaware corporation,)
and FCHM INC., a Delaware )
corporation, 11
Defendants. ))
---_--___---_----_-----------
DOUGLAS T. MCCLURE, JR., ))
Counterclaim )
Plaintiff, )1
V . 1
1
RALPH J. CARBALLAL and )
ROBERT D. HUGHES, and )
PMBC CORP., a Delaware )
corporation 1)
Counterclaim 1
Defendants. 1
ANSWER AND COUNTERCLAIM
Defendant Douglas T. McClure, Jr. ("McClure") for his
answer hereby responds to the numbered paragraphs of the
complaint as follows:
1. Admits that plaintiffs purport to bring this
action pursuant to 8 Del. c. §§ 211, 225 and 226 and purport to
seek the relief set forth in paragraph 1, but denies that
plaintiffs have any legal right to the requested relief.
SNIPPETS:
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7
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ANSWER AND COUNTERCLAIM
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EXTRACTED KEY WORDS
PMBC COMPLAINT FOWLER STOCK SECURITIES STOCKHOLDERS AGREEMENT PMBC SHAREHOLDERS PARAGRAPH COMMON STOCK HUGHES PMB DEFENDANTS ADMIT PMB DEFENDANTS DENY DELAWARE PRIVATE MERCHANT BANKING PLAINTIFFS OUTSTANDING STOCK BONUS POOL DISTRIBUTION THIRD SENTENCE OWNERSHIP FRAUDULENT KEY TERMINATION PROVISIONS DIRECTORS INVESTMENT BANKING WRITTEN CONSENT SECOND SENTENCES MATERIAL MISREPRESENTATIONS CONNECTION FULLY SET |
i K, [ G g p jy,; 1,
t .?`.\
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
RALPH J. CARBALLAL and ROBERT D. )
HUGHES, >>
Plaintiffs,
j'
V. ) C.A. No. 17058
>
PMBC CORP., a Delaware corporation, >
DOUGLAS T. MCCLURE, JR., THE )
PRIVATE MERCHANT BANKING >
SECURITIES CORP., a Delaware corporation, )
and FCHM INC., a Delaware corporation, >>
Defendants. >
-.---------------_--_------------------------------------- >
PMBC CORP., a Delawai-e corporation, >>
Counterclaim Plaintiff, )
>
V.
;
RALPH J. CARBALLAL and ROBERT D. )
HUGHES, >)
Counterclaim Defendants. )
ANSWER AND COUNTERCLAIM
Defendants PMBC Corp. ("PMBC"), The Private Merchant Banking Securities Corp.
(,"Securities Corp.") and FCHM Inc. ("FCHM") (collectively, the "PMB Defendants") hereby answer
t.he complaint herein as follows:
CounterStatement Of The Nature Of The Action
1. Plaintif%' claim that the two of them own a majority of the issued and
outstanding stock of PMBC and, thus, can outvote the other three shareholders of PMEK, is
predicated on: (a) nefarious ulterior motives; (b) deceittil renouncement of
RLFl-214198-1
SNIPPETS:
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8
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VERIFIED COMPLAINT
|
EXTRACTED KEY WORDS
CARBALLAL/HUGHES HUGHES SECURITIES MCCLURE SHAREHOLDER OFFICER PLAINTIFFS FCHM PURSUANT PMB DIRECTORS FOWLER SHAREHOLDERS MEETING DEL OUTSTANDING ANNUAL SHAREHOLDERS MEETING DELAWARE CORPORATION MERCHANT BANKING DEFENDANT COMMON SHARES CUSTODIAN GENERAL PARTNER PMBC BOARD LIMITED PARTNERSHIP EMPLOYEES TRANSACTIONS REGISTERED PRINCIPALS COMPLAINT APPOINTMENT |
.I
i,iiI L.~/.
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
RALPH J. CARBALLAL and ROBERT D.
HUGHES,
Plaintiffs,
1
V. ) C.A.No. /yos%fle.
\ I
. 1
.
PMBC CORP., a Delaware corporation,
DOUGLAS T. MCCLURE, JR., THE PRIVATE ) r" -.
.
MERCHANT BANKING SECURITIES CORP., )
a/k/a PMB SECURITIES CORP., a Delaware ) : `
.. i
corporation, and FCHM INC., a Delaware ) - "
corporation, ) C-
1 ! ..I
Defendants. 1
VERIFIED COMPLAINT
Plaintiffs Ralph J. Carballal ("Carballal") and Robert D. Hughes ("Hughes"), for
their Complaint, allege as follows:
NATURE OF THE ACTION
1. In this action, pursuant to 8 Del. C. 0 225 plaintiffs seek a declaration that
plaintiffs Carballal and Hughes are and remain directors and officers of PMBC Corp. ("PMBC"
or the "Company"), that collectively they own a majority of the authorized and outstanding
voting stock of the Company, and that defendant Douglas T. McClure, Jr. ("McClure") is neither
an officer nor a director of the Company. In addition, as shareholders of defendants The Private
Merchant Banking Securities Corp. ("Securities") and FCHM Inc. ("FCHM"), pursuant to 8 Del.
C. 5 211 plaintiffs Carballal and Hughes seek the entry of an order compelling each of Securities
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