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1
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RESPONSE TO PLAINTIFFS MOTION FOR REARGUMENT
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EXTRACTED KEY WORDS
PLAINTIFF HOLLAND AMS TERMINATION REARS ELKIN HOLOD TRANSACTION PROFIT MOTION TESTIMONY EVIDENCE CONTRACTS REARGUMENT COURT DISSOLUTION REFERRAL FEE CLIENT CLOSING PAID WARNER LAMBERT REDDING YORK POST-TRIAL BRIEFING AGREEMENT REASONS SUPPORT AARLP HOLLAND DEP |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY /
ACTIVE ASSET RECOVERY, INC. )1
Plaintiff, >)
V. 1> Civil Action No. 15478
REAL ESTATE ASSET RECOVERY 1
SERVICES, INC., 1>
Defendant. >>
V. >1
ACTIVE ASSET RECOVERY, L.P. >1
Nominal Defendant >
RESPONSE TO PLAINTIFF'S
MOTION FOR REARGUMENT
On January IO, 1999, this Court issued a 55page decision after a one-week trial
and extensive post-trial briefing. A week later, Plaintiff moved for reargument of five
different issues. As discussed below, the Motion should be denied.
The Termination Date
Plaintiff first argues the Court erred in finding that notice of dissolution was not
given to the Limited Partner until January 23, 1997, arguing there is "uncontroverted
testi,mony" that Mr. Holland was notified in March of 1996 that the Partnership "was
being terminated." (Motion at 2) For the reasons set forth out our post-trial briefing, we
respectfully disagree with the Court's conclusion that January 23, 1997 is the
Partnership's dissolution date.
Mr. Holland's testimony, the only evidence cited by Plaintiff, does not support the
claim. that REARS was told in March 1996 that the Partnership was dissolved. The cited
testirnony establishes that a month or so after Mr. Holod was terminated, Mr. Holland was
advised that the operational structure of the Partnership was being revamped unilaterally
by AMS. Specifically, he was told that contracts would no longer be consummated in the
Partnership's name, and that he would receive a salesman's bonus for transactions on whi
SNIPPETS:
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2
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LETTER OPINION
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EXTRACTED KEY WORDS
PARTNERSHIP TRANSACTION AMS REARS COMMISSIONS WASTE MANAGEMENT PROPOSED ACCOUNTING DISSOLUTION CLIENT EMPLOYEES BELONGS INVENTORY TRANSACTION REFERRAL FEE MARGULES ASSET RESOLVE DEP HOLLAND RESERVE PRINTING COSTS STONE ESQUIRE TEKLITS ASSET RECOVER-V REAL ESTATE OPINION AMOUNT AMENDMENT TEXACO |
C OUR T O F C HANCER Y
OF THE
S TATE OF DELAWARE
LEO E. STRINE, JR. COURT HOUSE
VICE-CHANCELLOR WILMINGTON, DELAWARE 19801
September 10, 1999
Alan J. Stone, Esquire
David J. Teklits, Esquire
Morris, Nichols, Arsht & Tunnel1
1201 N. Market Street
P.O. Box 1347
Wilmington, DE 19899- 1347
David J. Margules, Esquire
Bouchard Margules Friedlander & MaloneyHuss
Suite 1102
222 Delaware Avenue
Wilmington, DE 19801
Re: Active Asset Recover-v, Inc. v. Real Estate Asset Recovery Services. Inc.,
C.A. No. 15478
Dear Counsel:
In a separate memorandum of even date, I addressed the major issues raised
in this dissolution action. This letter opinion assumes the reader's familiarity with
that opinion and is designed to give the parties further guidance and to resolve
some smaller disputes between them.
Waste Management Contract - - The evidence indicates that the Waste
Management contract should not have generated a preferred return for AMS.
Waste Management was not an existing client of AMS. DX 51; Tr. 650; Wagner
Dep. 68. The amount of the preferred return must be returned to the Partnership.
Future Commissions - - AMS inflated the commissions that will be payable
on media sales resulting from Partnership contracts during the rest of the wind-up
to reflect a supposed increase in commission rates at AMS. I will allow
commissions at the amount of 8.0% for this period, a figure greater than the high
end of the actual historic rates. Tr. 519-522. This is generous to AMS given the
shaky quality of the testimony regarding the commission structure increase, the
failure of AMS to prove that such commissions were due on every transaction
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3
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MEMORANDUM OPINION
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EXTRACTED KEY WORDS
REARS PARTNER MEDIA AMS HOLOD LIMITED PARTNERSHIP HOLLAND ELKIN BUSINESS DELAWARE ASSETS PARTNERSHIP AGREEMENT YORK COSTS EXPENSES JOINT VENTURE DISSOLUTION GENERAL PARTNER DEFENDANTS MEDIA TRADE YORK ACTION ACTIVE MEDIA SERVICES ACCOUNTING TRANSACTION DRULPA REASONABLENESS ACTIVE ASSET RECOVERY LITIGATION INDEMNIFICATION |
_' ' ,
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE ii -..! : >;
IN- AND FOR NEW CASTLE COUNTY
ACTIVE ASSET RECOVERY, INC.,
Plaintiff
V. >
> Civil Action No. 15478
REAL ESTATE ASSET RECOVERY >
SERVICES, INC., >>
Defendant, >
and
ACTIVE ASSET RECOVERY, L.P.,
Nominal Defendant.
MEMORANDUM OPINION
Date Submitted: August 23, 1999
Date Decided: September 10, 1999
Alan J. Stone, Esquire, David J. Teklits, Esquire, Stephanie L. Nagel, Esquire, of
MORRIS, NICHOLS, ARSHT & TUNNELL, Wilmington, Delaware, Attorneys for
Plaintiff.
David J. Margules, Esquire, of BOUCHARD MARGULES FRIEDLANDER &
MALONEYHUSS, Willmington, Delaware; OF COUNSEL: James P. Donohue, Jr.,
Esquire, of GILBRIDE:, TUSA, LAST & SPELLANE, New York, New York,
Attorneys for Defendant.
STIIINE, Vice C'hancelllor
In 199 I, Active Media Services, Inc. ("AMS"), through its president,
Al Elkin, and Real Elstate Asset Recovery Services, Inc. ("REARS" or the
"Limited Partnership"), through its founders and co-owners Albert Holland
and Mark Holod, agreed to form a joint venture, which became Active Asset
Recovery, L.P. (the "Partnership"), a Delaware limited partnership. The two
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4
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DEFENDANTS POST TRIAL BRIEF
|
EXTRACTED KEY WORDS
PWC AMS CONTRACTS REAL ESTATE ASSETS COURT DISSOLUTION DELAWARE DEL REARS FEES BARTER SCOPE WEISS HOLOD TRANSACTION LITIGATION LIMITED PARTNERSHIP ASSET RECOVERY DEPOSITION ACCOUNTING TERM SHEET LEXIS TERMINATION REFERRAL FEE ENTERPRISE COMMISSIONS PROCEEDING LEGALLY MERITLESS |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
ACTIVE ASSET RECOVERY, INC. >>
Plaintiff, >>
V. >
> Civil Action No. 15478
REAL ESTATE ASSET RECOVERY )
SERVICES, INC., >>
Defendant. >
V. >
>
ACTIVE ASSET RECOVERY, L.P. >>
Nominal Defendant >
DEFENDANT'S POST TRIAL BRIEF
BOUCHARD MARGULES FRIEDLANDER
& MALONEYHUSS
222 Delaware Avenue, Suite 1102
Wilmington, Delaware 1980 1
(302) 573-3500
(302) 573-3501 (facsimile)
Attorneys for Real Estate Asset
Recovery Services, Inc.
Dated: August 16, 1999
TABLE OF CONTENTS
INTRODUCTION . . . . . . . . . . . . . . . . . . ~ . . . . . . . . . . . . . . . . . . . .
ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . 2
I. PWC INCORRECTLY EXCLUDED PARTNERSHIP REVENUES . . . . . . . . . _ . . . . . . . . . 3
SNIPPETS:
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5
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PLAINTIFFS POST-TRIAL OPENING BRIEF
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EXTRACTED KEY WORDS
ACTIVE MEDIA TRANSACTION PARTNER PWC AMOUNT HOLOD ACCOUNTING VALUATION DELAWARE RIGHTS CHESEBROUGH PONDS EVIDENCE PAYMENT INVENTORY TRANSACTIONS COURT REFERRAL FEE AGREEMENT CONTINUED1 AAR GENERAL PARTNER ACTIVE ASSET RECOVERY LIMITED PARTNERSHIP REARS ECONOMIC RIGHTS TERMINATION TESTIFYING OVERHEAD CHARGES YORK ACTION DEFENDANT |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
ACTIVE ASSET RECOVERY, INC., 11
Plaintiff, 11
V. 11
REAL ESTATE ASSET RECOVERY 1
SERVICES, INC., ) Civil Action No. 15478-NC
)
Defendant, )
and I1
ACTIVE ASSET RECOVERY, L.P., )1
Nominal Defendant. 1
PLAINTIFF'S POST-TRIAL OPENING BRIEF
MORRIS, NICHOLS, ARSHT & TUNNELL
Alan J. Stone
David J. Teklits
Stephanie L. Nagel
1201 N. Market Street
P.O. Box 1347
Wilmington, DE 19899-1347
(302) 658-9200
Attorneys for Plaintiff,
Active Asset Recovery, Inc.
August 16, 1999
i.
TABLE OF CONTENTS
Page
TABLE OF CITATIONS iii
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6
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PLAINTIFFS PRETRIAL REPLY BRIEF
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EXTRACTED KEY WORDS
ACCOUNTING BUSINESS HOLOD WINDING PWC COURT ASSETS ACTIVE MEDIA TRANSACTIONS LIMITED PARTNERSHIP REFERRAL FEE AFFAIRS DEL AAR NET PROFITS GENERAL OVERHEAD REARS AGREEMENT YORK ACTION TERM SHEETS GROSS PROFITS HOLOD CLAIMS HOLOD DEP DEFENDANT DEPOSITION TESTIMONY ACTIVE MEDIA SERVICES GENERAL OVERHEAD EXPENSES ACTIVE PARTICIPANT INVENTORY TRANSACTIONS |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
ACTIVE ASSET RECOVERY, INC., )
Plaintiff, 1)
V. ))
REAL ESTATE ASSET RECOVERY )
SERVICES, INC., ) Civil Action No. 15478-NC
Defendant, 11 1'
and
1
ACTIVE ASSET RECOVERY, L.P., )
Nominal Defendant.
PLAINTIFF'S PRETRIAL REPLY BRIEF IN SUPPORT OF
APPLICATION FOR APPROVAL OF THE WINDING UP OF
THE AFFAIRS OF ACTIVE ASSET RECOVERY, L.P.
MORRIS, NICHOLS, ARSHT & TUNNELL
Alan J. Stone
David J. Teklits
Stephanie L. Nagel
1201 N. Market Street
P.O. Box 1347
Wilmington, DE 19899-1347
(302) 658-9200
Attorneys for Plaintiff,
Active Asset Recovery, Inc.
June 1, 1999
1.
TABLE OF CONTENTS
Paqe
TABLE OF CITATIONS ii
SNIPPETS:
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7
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JOINT PRETRIAL ORDER
|
EXTRACTED KEY WORDS
HOLOD AAR REARS DELAWARE BUSINESS ACTIVE ASSET RECOVERY GENERAL PARTNER AMS COURT ACTIVE MEDIA TRANSACTIONS HOLLAND AARLP AFFAIRS AGREEMENT DEFENDANT JOINT VENTURE REAL ESTATE BARTER TRANSACTIONS MARK HOLOD ACCOUNTING DISSOLVING TERM SHEET GENERAL OVERHEAD GROSS PROFITS CONTRACTS REFERRAL FEE TERMINATION PARTNERSHIP PURSUANT |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
ACTIVE ASSET RECOVERY, INC., 1)
Plaintiff, 1)
V .
1
REAL ESTATE ASSET RECOVERY )
SERVICES, INC., ) Civil Action No. 15478-NC
)
Defendant, ))
V . )1
ACTIVE ASSET RECOVERY, L.P.,
1
Nominal Defendant. 1
JOINT PRETRIAL ORDER
I. NATURE OF THE ACTION
This is an action brought by Active Asset Recovery,
Inc. ("AAR, Inc."), the sole general partner of Active Asset
Recovery, L.P. (the "Partnership"), against Real Estate Asset
Recovery Services, Inc. ("REARS"), the sole limited partner of
the Partnership, seeking, inter alia, an order judicially
dissolving the Partnership and approving the winding up of its
affairs and business. Mark Holod, the Vice-President, Secretary
and Treasurer of REARS, answered the complaint on behalf of
REARS. On June 23, 1998, following full briefing, the Court
-l-
judicially dissolved the Partnership pursuant to 8 Del. C. S 17-
802. A copy of the Court's Order is annexed hereto as Exhibit
"A". AAR, Inc., as the general partner of the Partnership,
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8
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ANSWER TO AMENDED COMPLAINT
|
EXTRACTED KEY WORDS
PARTNERSHIP PARAGRAPH REARS DENIES HOLOD ALLEGATION JOINT VENTURE AGREEMENT YORK COURT ALLEGES LAW HOLLAND DELAWARE REARS DENIES KNOWLEDGE LIMITED PARTNERSHIP ADMITS AMS AAR INFORMATION SUFFICIENT REAL ESTATE RESPECTFULLY REFERS PARTIES REPRESENTATIONS ASSET COUNSEL EXPERTISE BUSINESS BARTER NEGOTIATIONS |
ORIGINAL
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
ACTIVE ASSET RECOVERY, INC. ))
Plaintiff, >1
V. )> Civil Action No. 15478
REAL ESTATE ASSET RECOVERY 1
SERVICES, INC., )1
Defendant. 1)
V. >1
ACTIVE ASSET RECOVERY, L.P. ))
Nominal Defendant 1
ANSWER TO AMENDED COMPLAINT
Defendant Real Estate Asset Recovery Services, Inc. ("REARS"), by its
undersigned counsel, hereby answers the Amended Complaint as follows:
1. REARS denies knowledge or information sufficient to form a belief as to
each and every allegation in paragraph 1 and respectfully refers all issues of law to the
court.
2. REARS denies each and every allegation in paragraph 2 except admits on
information and belief, that Active Asset Recovery, Inc. ("AAR"), is a New York
corporation with its principal place of business at One Blue Hill Plaza, Pearl River, New
York, and is a wholly owned subsidiary of Active Media Services, Inc. ("AMS").
3. REARS denies each and every allegation in paragraph 3 except admits that
REARS is a Delaware corporation with its principal place of business in Westport,
DSW:30033.1
Connecticut, and that its registered agent for service of process in Delaware is The
Prentiss-Hall Corporation System, Inc.
4. REARS denies knowledge or information to form a belief as to each and
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9
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INC. V. REAL ESTATE ASSET RECOVERY SERVICES INC. BRIEF
|
EXTRACTED KEY WORDS
BUSINESS PARTIES DELAWARE AAR ACTIVE ASSET RECOVERY AGREEMENT WINDING HOLOD COURT DEL AFFAIRS PAYMENT ACTIVE MEDIA LIMITED PARTNERSHIP PROVISION DISTRIBUTIONS TEKLITS AFF TRANSACTIONS CREDITORS GENERAL PARTNER HOLOD DEP CONTINGENT REARS JOINT VENTURE PARTICIPATION DISSOLUTION SUMMARY JUDGMENT MEDIA TRADE NET PROFITS |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
ACTIVE ASSET RECOVERY, INC., r-
))
Plaintiff, ))
V. )
REAL ESTATE ASSET RECOVERY ; :
SERVICES, INC., ) Civil Action No. 15478-NC
1
Defendant, 1)
V . )
ACTIVE ASSET RECOVERY, L.P., 1
Nominal Defendant.
PLAINTIFF'S BRIEF IN SUPPORT OF
ITS APPLICATION FOR APPROVAL OF THE WINDING UP
OF THE AFFAIRS OF ACTIVE ASSET RECOVERY, L.P.
MORRIS, NICHOLS, ARSHT & TUNNELL
Alan J. Stone
David J. Teklits
1201 N. Market Street
P.O. Box 1347
Wilmington, DE 19899
(302) 658-9200
Attorneys for Plaintiff Active
Asset Recovery, Inc.
February 10, 1999
i.
TABLE OF CONTENTS
Page
NATURE AND STAGE OF THE PROCEEDING 1
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