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1
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COMPLAINT MAY 1
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EXTRACTED KEY WORDS
BOYS SHAREHOLDERS PLAINTIFFS DIRECTORS BACKSTREET BOYS SOLE AGREEMENT EXHIBIT PURPORTS BUSINESS SHARES MEETING MAJORITY SHAREHOLDERS DISPUTE CONTRACTS WRITTEN CONSENTS CONTROL RELIEF NOMINAL DEFENDANT PURSUANT STOCK REQUIRING OBLIGATES VOTE MANAGER VOTING OUTSTANDING PROVISION ELECTION |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
NICKOLAS CARTER, ALEXANDER:
MCLEAN, HOWARD DOROUGH, KEVIN: , ,
RICHARDSON, BRIAN LITTRELL, : .* L .
: . '
- L
Plaintiffs, : c. 7
:
V. : C.A. NO. /<;3syNc ..." .
. -.., "_
LOUIS J. PEARLMAN, : I' . *
: _ c3
Defendant, : --
:
and :
BACKSTREET BOYS, INC., :
Nominal Defendant.
COMPLAINT PURSUANT TO 8 DEL.C. 5225
Plaintiffs, by and through the undersigned counsel, for their
Complaint, hereby allege as follows:
1. This is an action pursuant to 8 De1.C. §225 to establish
Plaintiffs Nickolas Carter, Alexander McLean, Howard Dorough, Kevin
Richardson, and Brian Littrell (collectively, "The Backstreet Boys"
or t'B~y~") as directors of Nominal Defendant Backstreet Boys, Inc.
THE PARTIES
2. Plaintiffs are the members of a popular vocal group, The
Backstreet Boys, formed in 1993, and based in the Orlando, Florida
area. The Plaintiffs are all residents of Florida.
3. Nominal Defendant Backstreet BOYS, Inc.
CorporationI') is a Delaware corporation, incorporated on or about
June 24, 1993, whose principal place of business is located at 7380
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2
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LETTER
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EXTRACTED KEY WORDS
ARBITRATION PLAINTIFFS ESQUIRE DIRECTORS PEARLMAN STOCKHOLDERS AGREEMENT DELAWARE ELECTION JOHN THOMAS ESQUIRE GREGORY VARALLO PARAGRAPH CONTROVERSY WRITTEN CONSENT VOTE ARBITRATION CLAUSE DISPUTE DISMISS MOTION COURT MATTER RIGHTS OFFICERS COMMON STOCK NOMINATE IRREVOCABLE PROXY DEFENDANT PEARLMAN EXECUTION |
C O U R T O F C H A N C E R Y
OF THE
S TATE OF D ELAWARE
S T E P H E N P . !-AMB C OURT
VICE-CHANCELLOR June 12, 1998 W I L M I N G T O N
John F. Thomas, Jr., Esquire
Tighe, Cottrell & Logan, P.A.
First Federal Plaza, Suite 500
P.O. Box 1031
Wilmington, Delaware 19899
Gregory V. Varallo, Esquire
Richards, Layton & Finger
One Rodney Square
P.O. Box 551
Wilmington, Delaware 19899
RE: Carter v. Pearlman, C.A. No. 16354-NC
Dear Counsel:
This Section 225 action is presented in a troubling posture. Plaintiffs purport to
have elected themselves directors of Backstreet Boys, Inc., a Delaware corporation (the
"Corporation"), by action taken by written consent. Their right to have done so is at
once justified and challenged by the language of a Stockholders Agreement, dated
September 17, 1993, entered into among all of the stockholders and the Corporation.
Specifically, the Stockholders Agreement provides as follows:
1. DIRECTORS AND OFFICERS
(a) The Corporation's Board of Directors shall consist of six (6)
individuals. Each Stockholder, for so long as he shall own at least 5 % of the
outstanding Common Stock, shall have the right to nominate himself to be a
John F. Thomas, Jr., Esquire
Gregory V. Varallo, Esquire
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3
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STATUS QUO ORDER
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EXTRACTED KEY WORDS
PENDING ARBITRATION PEARLMAN LOUIS PARTIES PENDING ENTRY JUDGEMENT MATTER RULING ELECTION AGREEMENT DEFENDANT LOUIS LITIGATION DIRECTORS PREJUDICE ISSUANCE WILMINGTON QUO BASIS SOLE PLAINTIFFS MEMBERS CONFLICTING ACTING COUNSEL ROUTINE ORDINARY COURSE BUSINESS OPERATIONS DISTRIBUTION |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
NICKOLAS CARTER, ALEXANDER )
MCLEAN, HOWARD DOROUGH, KEVIN 1
RICHARDSON, BRIAN LITTRELL, 1 t
.
Plaintiffs, > .
>
V. ) Civil Action No. 16i54-NC
> c
LOUIS J. PEARLMAN, > L.
. :
Defendant, ;>
and >
BACKSTREET BOYS, INC., ;>
Nominal Defendant. >
STATUS QUO ORDER
WHEREAS, Defendant Louis J. Pearlman having moved the Court for an Order
maintaining the status quo pending the Court's adjudication of the instant litigation;
WHEREAS, the parties to this action having approved the form of Order entered herein
after discussion between themselves; and
WHEREAS, it appears to the Court on the basis of the present record that a bonafide
dispute exists as to whether Pearlman is the Sole Director of Backstreet Boys, Inc., ("the
Company") and as to whether Plaintiffs are duly elected as members of the Board of Directors of
the Company;
RLFl-169029-I
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4
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ORDER
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EXTRACTED KEY WORDS
DEFENDANT MATTER MOTION COUNSEL DISCOVERY EXPEDITE THERETO SCHEDULE REQUESTS ADMISSION ALEXANDER MCLEAN HOWARD DOROUGH KEVIN BACKSTREET BOYS NOMINAL DEFENDANT OPPOSITION THERETO COMPLAINT DISMISS OPENING CONFER BRIEFING SCHEDULE SUMMARY JUDGMENT EXPEDITED BASIS RESPONDING INTERROGATORIES PRODUCTION PLEADINGS EVIDENCE |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
NICKOLAS CARTER, ALEXANDER:
MCLEAN, HOWARD DOROUGH, KEVIN:
RICHARDSON, BRIAN LITTRELL, :
Plaintiffs,
V. C.A. No. 16354-NC
LOUIS J. PEARLMAN, :.,
Defendant, I I
-.-
and , s-1
BACKSTREET BOYS, INC.,
Nominal Defendant.
ORDER
This pfi day of June, 1998, upon consideration of Plaintiffs' Motion to
Expedite Proceedings, and Defendant's opposition thereto, it is hereby ORDERED:
1. That Defendant shall file an Answer to the Complaint on or before May 28, 1998;
2. That Defendant's Motion to Dismiss or Stay shall be heard on June 9, 1998, at
4:30 PM. Defendant shall file its Opening Brief on said matter on or before May 28, 1998.
Plaintiff shall file an Answering Brief thereto on or before Thursday, June 4, 1998, and
Defendant may file a Reply brief on or before Monday, June 8, 1998;
3. That counsel shall confer and agree upon a briefing schedule for Plaintiffs' Motion
for Summary Judgment, should Plaintiffs file such Motion;
4. That discovery shall proceed on an expedited basis in this matter, and shall be
completed by July 3, 1998, or such other date as Counsel may agree upon. The time for
responding to interrogatories, requests for admission, or requests for production in this matter
shall be shortened to fifteen (15) days, or as otherwise agreed upon by counsel. Discovery in
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5
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BRIEF
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EXTRACTED KEY WORDS
AGREEMENT COURT CONTRACT ARBITRATE PARTIES PLAINTIFFS ARBITRABILITY EXCEPTIONS DELAWARE BASIS ACT INTERPRET LAW JURISDICTION CORPORATE GOVERNANCE PROVISION STOCKHOLDERS INTERSTATE COMMERCE ARBITRATORS ROSE HEART PRECEDENT OLDE DISCOUNT FAA PREEMPTION IMPEDE VITIATES PERTINENCEHERE STATE POLICY LIEN ACTION |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
NICKOLAS CARTER, ALEXANDER
MCLEAN, HOWARD DOROUGH, KEVIN
RICHARDSON, BRIAN LITTRELL, >>
Plaintiffs,
;
V. ) Civil Action No. 16354-NC
LOUIS J. PEARLMAN, 11
Defendant, >>
and >>
BACKSTREET BOYS, INC., 1) - `-
Nominal Defendant. ) : . *
.-
DEFENDANT'S REPLY BRIEF IN SUPPORT OF " -- -
HIS MOTION TO DISMISS OR STAY
Gregory V. Varallo
Catherine G. Dearlove
OF COUNSEL: Leanne J. Reese
Richards, Layton & Finger, P.A.
Michael D. Friedman One Rodney Square
Joel M. Wolosky P.O. Box 55 1
Parker Chapin Flattau & Klimpl, LLP Wilmington, DE 19899
1211 Avenue of the Americas (302) 65 l-7772
New York, NY 10036 Attorneys for Defendant Louis J. Pearlman
Dated: June 8, 1998
RLFl-167352-1
TABLE OF CONTENTS
TABLE OF AUTHORITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PRELIMINARY STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SNIPPETS:
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6
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MEMORANDUM
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EXTRACTED KEY WORDS
COURT AGREEMENT LAW STOCKHOLDERS PEARLMAN DELAWARE ARBITRATION ACT PLAINTIFFS PENDING ARBITRATION DEL DISPUTE FEDERAL ARBITRATION ACT DISMISS CHANCERY PROVISIONS CONTROVERSY ARBITRATION CLAUSE ARBITRATE COMPLAINT PEARLMAN AFF INTERPRETATION CONNECTION COMMON STOCK SHAREHOLDERS WRITTEN CONSENT PRESIDENT ARBITRATION PANEL INJUNCTIVE RELIEF DIRECTORS |
ORIGINAL 12
c
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
NICKOLAS CARTER, ALEXANDER >
MCLEAN, HOWARD DOROUGH, KEVIN >
RICHARDSON, BRIAN LITTRELL, >>
Plaintiffs, >
>
V. ) Civil Action No. 16354-NC
>
LOUIS J. PEARLMAN, >)
Defendant, )>
and >>
BACKSTREET BOYS, INC., >)
Nominal Defendant. )
MEMORANDUM OF LAW IN SUPPORT OF
DEFENDANT'S MOTION TO DISMISS OR STAY
Gregory V. Varallo
Catherine G. Dearlove
OF COUNSEL: Leanne J. Reese
Richards, Layton & Finger, P.A.
Michael D. Friedman One Rodney Square
Joel M. Wolosky P.O. Box 551
Parker Chapin Flattau & Klimpl, LLP Wilmington, DE 19899
12 11 Avenue of the Americas (302) 65 l-7772
New York, NY 10036 Attorneys for Defendant Louis J. Pearlman
Dated: May 28, 1998
RLFI-167352-I
TABLE OF CONTENTS
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7
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ANSWER
|
EXTRACTED KEY WORDS
PLAINTIFFS COMPLAINT AGREEMENT PARAGRAPH ALLEGATIONS STOCKHOLDERS WRITTEN CONSENT PURPORT COURT BACKSTREET BOYS DEFENDANT ARBITRATION PARTIES PURSUANT REQUIRING SOLE CONTRACT SHAREHOLDERS COUNSEL FLORIDA PROPER RIGHTS DIRECTORS BINDING PRESIDENT COUNTERCLAIMS CONTROL CHAIRMAN TREASURER |
ORIGINAL
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
I : ,: J' ,-; `3 II
n\T AND FOR NEW C/&&j @f,$& : ::' ;;
NICKOLAS CARTER, ALEXANDER
MC LEAN, HOWARD DOROUGH, >
KEVIN RICHARDSON and BRIAN >
LITTRELL, >
>
Plaintiffs, >
>
V. >
>
LOUIS J. PEARLMAN, >
> Civil Action No. 163 54
Defendant, >
>
and >
>
BACKSTREET BOYS, INC., >
>
Nominal >
Defendant, >
>
>
LOUIS J. PEARLMAN, >
>
Counterclaim >
Plaintiff, >
>
V. >
>
NICKOLAS CARTER, ALEXANDER >
MC LEAN, HOWARD DOROUGH, >
KEVIN RICHARDSON, and BRIAN >
LITTRELL, >
>
Counterclaim >
Defendants. >
ANSWER AND COUNTERCLAIMS
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8
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AFFIDAVIT
|
EXTRACTED KEY WORDS
STOCKHOLDERS AGREEMENT MEMBERS DIRECTORS BACKSTREET BOYS MEETING BBI COMPLAINT RECORDING EXHIBIT ANNEXED HERETO PLAINTIFFS DEFENDANT PRESIDENT CHAIRMAN ELECT DISPUTE MCLEAN PEARLMAN SUCCESS IRREVOCABLE PROXIES FLORIDA CONNECTION PURPORTING PENDING ARBITRATION PROCEEDING MARKETING BUSINESS TALENTS |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FORNEW CASTLE COUNTY
NICKOLAS CARTER, ALEXANDER
MCLEAN, HOWARD DOROUGH, KEVIN
RICHARDSON, BRIAN LITTRELL,
Case No.: 16354NC
Plai.ntif%s,
v.
LOUIS J. PEARLMAN,
Defendant.
and
BACKSTREET BOYS, INC.
Nominal Defendant.
STATE OF FLORlRA ) ss.:
COUNTY OF ORANGE )
LOUIS J. PEARLMAN, being duly sworn, deposes and says:
1. I am one of the defendants in this action, and I zun President, Chief
Executive Oflicer and Chairman of the Board of Backstreet Boys, Inc. ((IBBI"), the other
defendant. I submit this affidavit in support of defendants' motion to dismiss or stay this action
on the grounds that this action is duplicative of and supersede by a pending arbitration proceeding.
2. In 2992, inspired by the success of certain 1980's recording goups
popular with young audiences, I devised the concept for a novelty musical group featuring
rh@m and blues music and synchronized contemporary dance steps, After considerable
market analysis, I decided to call this group the "Backstreet Boys." From more than fifty (50)
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9
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MOTION
|
EXTRACTED KEY WORDS
BACKSTREET BOYS PEARLMAN MOTION RECORDING EXPEDITING COURT DEFENDANT COUNSEL SUPPORT DISTRICT RECORD COMPANY COMPLAINT BRIEFS SUMMARY JUDGMENT CHANCERY DELAWARE NOMINAL DEFENDANT FLORIDA ZOMBA RECORDING LITIGATION AUTHORIZATION RIGHTS ENJOIN HARM CAUSING ECONOMIC DAMAGES BUSINESS MANAGEMENT CORPORATE ASSETS |
y.` `0 /-
F"'
i'
( ..m `_~ !
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
NICKOLAS CARTER, ALEXANDER:
MCLEAN, HOWARD DOROUGH, KEVIN:
RICHARDSON, BRIAN LITTRELL, :
Plaintiffs,
V. C.A. No. 16354-NC
LOUIS J. PEARLMAN,
Defendant,
and
BACKSTREET BOYS, INC.,
Nominal Defendant.
MOTION TO EXPEDITE PROCEEDINGS
NOW COMES Plaintiffs, by and through the undersigned counsel, and hereby moves this
honorable Court for an Order, expediting proceedings in this matter. In support of this Motion,
the Plaintiffs set forth as follows:
1. This action is brought pursuant to 8 De1.C. $225 by plaintiffs, who are the
members of the popular vocal group "The Backstreet Boys." Plaintiffs seek an Order declaring
them as duly-elected directors of the Nominal Defendant Backstreet Boys, Inc. (the
"Corporation").
2. Section 225 of the Delaware General Corporation Law contemplates an expedited
and summary proceeding to determine a director's claim to office. Box v. Box, Del. Supr., 697
A.2d 395, 399 (1997) ("Section 225 proceedings are, by their nature, summary and
SNIPPETS:
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10
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AFFIDAVIT
|
EXTRACTED KEY WORDS
BACKSTREET PEARLMAN FLORIDA RECORDING PLAINTIFF MATTER FELLOW BAND MEMBERS MAJORITY SHAREHOLDERS EXPEDITE LITIGATION REGISTER CHANCERY COURT ENCLOSURES HOWARD OUTSTANDING SHARES STOCK VOCAL GROUP PROCEEDINGE RELIEF ZAMBA RECORD COMPANY DIRECTORS BACKATRAET BOYS CORPORATE ASSETS THJS LITIGATION LWBQ M3TZ-T |
ORIGINAL
TIGHE, COTTRELL & LOGAN, F'.A.
FIRST FEDERAL PLAZA
P.O. BOX 1031
WILMINGTON, DE 19899
(302)658-6400
FAX (302) 658-9836
l-800-645-6401
BRANCH OFFICES
AFFILIATED WITH
MARTIN T MCDONOUGH. M D J.D
31 EAST AVENUE
P 0 BOX303 May 26, 1998
WOODSTOWN, NJ 08098
555 FAIRMOUNT AVENUE
SUITE 230
BALTIMORE, MD 21204-5497
2017 SPRING GARDEN STREET
PHILADELPHIA, PA 19130-3804
Register in Chancery
Court of Chancery
1020 North King Street
Wilmington, DE 19801
Re: NICKOLAS CARTER et, al., v. LOUIS PEARLMAN and BACKSTREET
BOYS, INC (nominal defendant)
C.A. No. 16354-NC
Our file: 4531
Dear Register:
Enclosed please find an original Affidavit of Howard Dorough.
Please replace the fax copies in our Complaint with these
originals. If you have any questions, please feel free to call.
Very truly yours,
TIGHE, OTTRELL & LOGAN, P.A.
F
BY:
JFT/rej
Enclosures
cc: Gregory Varallo, Esq.
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