IN RE CENCOM CABLE INCOME PARTNERS - Legal Case Documents


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IN RE CENCOM CABLE INCOME PARTNERS

Keywords & Phrases

CaseNo: C.A. No. 14,634, CourtCode: CC, CourtName: IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE, State: DE Delaware, UniqueCaseRef: DE>CC>00014634, Limited Partners, General Partner, Partnership Agreement, Partnership, Summary Judgment, Quarterly Distributions, Sale, Transaction, Del, Appraisals, Motion, Termination, Husch, Disclosure Statement, Exhibit, Expenditures, Sale Transaction, Opinion, Cencom Cable Income, Distributions, Kagan, Appraisal Process, Duty, Daniels, Assets, Delaware, Pleadings, Material Fact, Dissolution, Standard Appraisal Techniques, Assure, Memorandum, Individuallv, Fiduciary Duty, Capital Expenditures, Valuations , ContentID: 120239844

Case Documents

2000-05-02

MEMORANDUM OPINION
[ see first page and extracted highlights below ] ItemID: 100500

22 pages
PDF

2000-02-04

REPLY BRIEF IN SUPPORT OF PLAINTIFFS CROSS MOTION FOR SUMMARY JUDGMENT
[ see first page and extracted highlights below ] ItemID: 103394

10 pages
PDF

2000-01-27

MEMORANDUM OPINION
[ see first page and extracted highlights below ] ItemID: 100501

20 pages
PDF

2000-01-14

REPLY MEMORANDUM IN SUPPORT OF DEFENDANTS SECOND MOTION FOR SUMMARY JUDGMENT AND IN OPPOSITION TO PLAINTIFFS CROSS MOTION FOR SUMMARY JUDGMENT
[ see first page and extracted highlights below ] ItemID: 103395

35 pages
PDF

1999-08-02

MEMORANDUM IN SUPPORT OF DEFENDANTS SECOND MOTION FOR SUMMARY JUDGMENT
[ see first page and extracted highlights below ] ItemID: 103396

39 pages
PDF

Total Documents: 5 documents , 126 pages

Price: $ 39.95

IVESLCD01 KGI0001

1 . MEMORANDUM OPINION

EXTRACTED KEY WORDS

DEFENDANTS
SUMMARY JUDGMENT
PLAINTIFFS
HUSCH
PARTNERSHIP
MOTION
DUTY
DANIELS
OPINION
LIMITED PARTNERS
APPRAISALS
PARTNERSHIP AGREEMENT
DISTRIBUTIONS
ASSURE
SECOND MOTION
SALE TRANSACTION
DISCLOSURE STATEMENT
MATERIAL FACT
GENERAL PARTNER BREACH
PRIORITY DISTRIBUTIONS
FIDUCIARY DUTY
TERMINATION
VALUATIONS
APPRAISERS
APPRAISAL PROCESS
TERMINATE PRIORITY
STANDARD APPRAISAL TECHNIQUES
CABLE SYSTEMS
ACCORDING

                                                                           -i
                                                                   -8

   IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

                IN AND FOR NEW CASTLE COUNTY



IN RI? CENCOM CABLE INCOME               >
PARTNERS, L.P. LITIGATION                >       C.A. No. 14634


                       Submitted: March  1, 2000
                         Decided: May  5,200O


                     MEMORAND  UM OPINION


Pamela S. Tikellis and James C. Strum of Chimicles  & Tikellis,
Wilmington, Delaware. OF COUNSEL: Lawrence P. Kolker and Robert
Abrams of Wolf  Haldens-tein Adler Freeman  &  Herz LLP. Attorneys for
Plaintiffs.

Daniel A. Dreisbach and Michael D. Allen of Richards, Layton  & Finger,
Wilmington, Delaware. OF COUNSEL: Stephen B. Higgins, Robert J.
Wagner and Thompson Cobum, St. Louis, Missouri.           Attorneys for
Defendants.



STEELE, V.C.



       This is the Court's ruling on defendants' second motion for summary

judgment. The Court granted in part and denied in part an earlier motion for

summary judgment. Defendants move for summary judgment on three

discrete issues. Comprehensive procedural and factual background can be

found in earlier opinions.'

                           I.     ISSUES PRESENTED

       The three issues pending are:

SNIPPETS:

MEMORAND UM OPINION

This is the Court's ruling on defendants' second motion for summary

Defendants move for summary judgment on three

the appraisal process, the solicitation and the sale transaction "each had been

fair to the Limited Partners" as described in the Disclosure Statement?

Did the General Partner have authority to terminate priority

Did the General Partner breach its fiduciary duties of loyalty

and candor in connection with the appraisals of the Partnership's assets by

On February 15, 1996, I denied plaintiffs' request to enjoin

L.P. (the "Partnership") to affiliates of the General

alleged that the General Partner breached its fiduciary duty of loyalty owed

state of the record disclosed that there were genuine issues of material fact

Partnership under the provisions of the Limited Partnership Agreement.

expressly provided for a termination date of September 30,

determination of the value of the Partnership assets by two appraisers:

between the valuations reached by the first two appraisers.

William Fitzgerald of Daniels and Melvin I. Fineberg of Fineberg CS, agreed upon a value of

assumed a duty to assure that Husch & Eppenberger would

Consent and the Sale Transaction "each been completed in compliance

Again, in this second motion for summary judgment, the defendants claim

Termination of Distributions

priority distributions; and the General Partner was not obligated to pay

regarding the proper valuation of the cable systems.

standard appraisal techniques", as the Partnership Agreement requires3' At

Fineberg, testifying for the defendants, stated that the appraisal valuations were prepared

2 . REPLY BRIEF IN SUPPORT OF PLAINTIFFS CROSS MOTION FOR SUMMARY JUDGMENT

EXTRACTED KEY WORDS

DEFENDANTS
LIMITED PARTNERS
TERMINATION
DISTRIBUTIONS
PARTNERSHIP AGREEMENT
PRIORITY
SALE
PLAINTIFFS
MOT
COURT
MOTION
TRANSACTION
PROVISIONS
LIQUIDATION
YORK
PROCEEDS
VOTE
APPROVE
DELAWARE
COUNSEL
EVIDENCE
AUTHORITY
CROSS MOTION
ARGUE
QUARTERLY DISTRIBUTIONS
REGULATION
JUDGEMENT
DISSOLUTION
CONTRACT

                                                                                      I,r...'
                                                                               ,>'

               IN THE COURT OF CHANCERY OF THE STATE'OF DELAWARE

                                   IN AND FOR NEW CASTLE COUNTY

____________---I____-------------------------------------    X

I n   r e   C E N C O M   C A B L E   I N C O M E   :               Consolidated C.A. No. 14634
PARTNERS, L.P. LITIGATION

__-_______-__-_I__-_____________________-------~---------
                                                             X


                                          REPLY BRIEF IN SUPPORT
                                 OF PLAINTIFFS' CROSS MOTION FOR
                                             SUMMARY JUDGMENT



                                                                  CHIMICLES & TIKELLIS LLP
                                                                  Pamela S. Tikellis
                                                                  James C. Strum
                                                                  One Rodney Square
                                                                  P.O. Box 1035
                                                                  Wilmington, DE 19899
                                                                  (302) 656-2500

                                                                  Liaison Counsel for Plaintiff4
OF COUNSEL:                                                                                        

WOLF  HALDENSTEIN ADLER
 FREEMAN & HERZ LLP
Lawrence P. Kolker
Robert Abrams
270 Madison Avenue
New York, NY 10016
(212) 545-4600

Plaintiffs' Lead Counsel


Dated: February 4, 2000



                                                                                       TABLE OF

SNIPPETS:

IN THE COURT OF CHANCERY OF THE STATE'OF DELAWARE

Partnership Agreement Do Not Mitigate the Force

Since the Limited Partners did not Vote on the

Termination of their Priority Return, Defendants

Have Provided No Evidence that the Limited

SEC Regulation § 240.14a, l.

Along with plaintiffs' response to defendants' Second Motion for Summary

judgment on the claim of improper termination by the General Partner

of the 11% priority return to the Limited Partners as of the effective date of the Sale

Transaction,' Plaintiffs' Cross Motion relies in part upon this Courts denial of defendants'

the cancellation of the Agreement or the winding up, liquidation

termination of the priority distributions to the Limited Partners before termination of the

As they did in the First Motion defendants argue that the General Partner

termination of the Partnership, Sec. Mot.

The Limited Partners Had A Right to their 11% Preferred Return Until All Proceeds Were

the occurrence of an event causing dissolution triggers the

no discretion to vary that return, and has no authority to enter into a transaction, with its

Transaction did not violate the Partnership Agreement.

Agreement and look to general provisions of Delaware law since the Partnership

limitations found elsewhere in the contract.

the Limited Partners were never asked to approve an amendment to the

no further quarterly distributions will be made in respect of the LP Units.

Liaison Counsel for Plaintiffs

WOLF HALDENSTEIN ADLER FREEMAN & HERZ LLP Lawrence P. Kolker Robert Abrams 270 Madison Avenue

3 . MEMORANDUM OPINION

EXTRACTED KEY WORDS

PLAINTIFFS
PARTNERSHIP
GENERAL PARTNER
DEFENDANT
PLEADINGS
COURT
MOTION
DEL
CHANCERY
LIQUIDATION
PARTNERSHIP AGREEMENT
JUDGEMENT
RELIEF
COUNSEL
STEELE
BUSINESS ASSOCIATION
SUPPLEMENTAL COMPLAINT
LITIGATION
CERTIFICATION
PERMANENT INJUNCTION
LEGAL ACTION
PARTNERSHIP ASSETS
INDEMNITEE
MEMORANDUM OPINION
WILMINGTON
ROBERT ABRAMS
THOMPSON COBUM LLP
PARTNER DEFENDANT CONTENDS
LIMITATION

       IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

                   IN AND FOR NEW CASTLE COUNTY



In Re CENCOM CABLE INCOME                >
PARTNERS, L.P. LITIGATION                ) Consolidated C.A. No. 14634



                       Submitted: September 14, 1999
                         Decided: January  27,200O


                        MEMORANDUM OPINION


Pamela S. Tikellis and James  C. Strum of Chimicles  & Tikellis, Wilmington,
Delaware. OF COUNSEL: Lawrence P. Kolker and Robert Abrams of Wolf
Haldenstein Adler Freeman  & Herz, LLP, New York, New York. Attorneys for
Plaintiffs.

Daniel A. Dreisbach and Michael D. Allen of Richards, Layton  & Finger,
Wilmington, Delaware. OF COUNSEL: Stephen B. Higgins and Robert J.
Wagner of Thompson Cobum LLP, St. Louis, Missouri. Attorneys for Defendants.



STEELE, V.C.



       I am asked to decide whether claims brought by limited partner plaintiffs

related to liquidation of the partnership are derivative claims or direct claims. The

general partner defendant contends the claims are derivative and should therefore

be dismissed for failing to meet the pleading requirements of Court of Chancery

Rule 23.1. Plaintiffs disagree and ask that I certify a class action so that they may

pursue these claims directly.

       If: (1) a business association consists of only two parties in interest, one a

putative class of injured plaintiffs and the other the defendant party that controls

SNIPPETS:

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

OF COUNSEL: Lawrence P. Kolker and Robert Abrams of Wolf Haldenstein Adler Freeman & Herz,

Daniel A. Dreisbach and Michael D. Allen of Richards, Layton & Finger, Wilmington, Delaware.

Stephen B. Higgins and Robert J. Wagner of Thompson Cobum LLP, St. Louis, Missouri.

I am asked to decide whether claims brought by limited partner plaintiffs

general partner defendant contends the claims are derivative and should therefore

a business association consists of only two parties in interest,

putative class of injured plaintiffs and the other the defendant party that controls

association - the limited partner class and the general partner.

grant the plaintiffs' motion for class certification.

plaintiffs' request for a permanent injunction.

In late 1995, limited partners of Cencom Cable Income Partners, L.P sought

to enjoin the sale of partnership assets being conducted by the general partner as

In early February, 199'7, the defendant moved for summary judgment.

March, 1997, the plaintiffs moved for certification of a class of:

Breach of the Partnership Agreement by not valuing the assets on a

pleadings on these five remaining claims, arguing that they are derivative claims

the limited partners filed a supplemental complaint seeking to

litigation expenses from partnership funds and to force it to repay any litigation

A direct claim seeks relief for injuries that fall distinctly upon the individual

Litman v. PrudentiaZBache Properties, Inc., Del.

As I stated in my Second Memorandum Opinion,

Steele, V.C., motionfor reargument denied, In re Cencom Cable Income Partners, L.P. Litig.,

Expenses incurred by an Indemnitlse in defending any legal action subject to this Section 4.6 mnitee to repay such amount unless it shall be determined that such an Indemnitee is entitled to be

limitations, in particular the limitation conditioning advances on the plaintiffs' not

4 . REPLY MEMORANDUM IN SUPPORT OF DEFENDANTS SECOND MOTION FOR SUMMARY JUDGMENT AND IN OPPOSITION TO PLAINTIFFS CROSS MOTION FOR SUMMARY JUDGMENT

EXTRACTED KEY WORDS

GENERAL PARTNER
PLAINTIFFS
PARTNERSHIP AGREEMENT
SALE
QUARTERLY DISTRIBUTIONS
TRANSACTION
SUMMARY JUDGMENT
DEFENDANTS
DEL
TERMINATION
CENCOM CABLE INCOME
KAGAN
EXHIBIT
EXPENDITURES
ASSETS
APPRAISALS
DISCLOSURE STATEMENT
MEMORANDUM
INDIVIDUALLV
CONSEQUENT TERMINATION
APPRAISAL PROCESS
OPPOSITION
DISSOLUTION
DEPOSITION
AMPLE AUTHORITY
VALUED INDIVIDUALLV
CAPITAL EXPENDITURES
FIDUCIARY DUTY
PURCHASING AFFILIATES

                                                                                >?T       c.2
            IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE                             c-l
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                                                                       :  -              2:
IN RE CENCOM CABLE INCOME Consolidated  Ck.580.  14634
PARTNERS, L.P. LITIGATION                                                -i              .r.Q





                  REPLY MEMORANDUM IN SUPPORT OF DEFENDANTS'
    SECOND MOTION FOR SUMMARY JUDGMENT AND IN OPPOSITION
         TO PLAINTIFFS' CROSS MOTION FOR SUMMARY JUDGMENT





OF COUNSEL:                               Daniel A. Dreisbach
                                          Michael D. Allen
Stephen B. Higgins                        Richards, Layton & Finger, P.A.
Robert J. Wagner                          One Rodney Square, P.O. Box 551
Thompson Coburn  LLP                      Wilmington, Delaware 19899
One Mercantile Center                     (302) 658-6541
St. Louis, Missouri 63 101                 Attorneys for Defendants
(3 14) 552-6000





Dated: January 14, 2000









RLFl-2106000-I

SNIPPETS:

IN RE CENCOM CABLE INCOME Consolidated Ck.580.

REPLY MEMORANDUM IN SUPPORT OF DEFENDANTS' SECOND MOTION FOR SUMMARY JUDGMENT AND IN

The Limited Partners Duly Consented to the Sale

Partnership Agreement To Terminate Quarterly

The General Partner Was Not Obligated to Pay

Quarterly Distributions Following Dissolution of the

L.P. Litin., Del Ch., Cons.

"he Limited Partners freely and voluntarily granted the General Partner

and/or its affiliates the right to purchase the Partnership's assets according to an appraisal

might attempt to challenge the structuring of the transaction

Id at 12-13 (referencing PA $ 1, Appraisal Process).2

Citations to the Partnership Agreement submitted as Exhibit B to Defendants'

`For example, on page 7 of their memorandum, Plaintiffs allege -- without any evidentiary

Plaintiffs' allegation on Page 20 that the General Partner "padded" the list of capital

Nor do Plaintiffs properly support their allegation on page 24 that "Daniels and Fineberg

Also, contrary to Plaintiffs' assertion, Kagan never even considered the issue in preparing

[Exhibit 1, Johnston Deposition, pg.

143 (explaining that an actionable breach of the fiduciary duty of candor requires

Termination of Quarterly Distributions.

and the Consequent Termination of Quarterly Distributions.

"In point of fact, the so-called "termination" of quarterly distributions was an inseverable

Even if as Plainti& contend, using July 1, 1995 as the effective date of transfer somehow

Distributions Following Dissolution of the Partnership

Must Be Valued Individuallv Rather Than In the Aggregate.

5 . MEMORANDUM IN SUPPORT OF DEFENDANTS SECOND MOTION FOR SUMMARY JUDGMENT

EXTRACTED KEY WORDS

COURT
DEFENDANTS
PARTNERSHIP AGREEMENT
GENERAL PARTNER
APPRAISALS
SALE TRANSACTION
EXHIBIT
DEL
DELAWARE
HUSCH
PLAINTIFFS
QUARTERLY DISTRIBUTIONS
OPINION
DISCLOSURE STATEMENT
MOTION
EXPENDITURES
SUMMARY JUDGMENT
APPRAISAL PROCESS
STANDARD APPRAISAL TECHNIQUES
MATERIAL FACT
VALUATIONS
CAPITAL EXPENDITURES
CENCOM CABLE INCOME
DEFENDANTS BREACHED DUTIES
EFFECTIVEPROCEDURES
COMPLIANCE
DISSOLUTION
CONNECTION
RELATED CONSENT MATERIALS

                  IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

                              IN AND FOR NEW CASTLE COUNTY


IN RE CENCOM CABLE INCOME                  )    Consolidated C.A. No. 14634
PARTNERS, L.P. LITIGATION                  >




                      MEMORANDUM IN SUPPORT OF DEFENDANTS':,
                       SECOND MOTION FOR SUMMARY JUDGMEN;?`.  j
                                                                       :, :
                                                                       I          ,:
                                                                       -`_   _

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                                                                       /          _
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                                                                             -..

OF COUNSEL:                                     Daniel A. Dreisbach
                                                Michael D. Allen
Stephen B. Higgins                              Richards, Layton & Finger
Robert J. Wagner                                One Rodney Square
Thompson Coburn                                 P.O. Box 551
One Mercantile Center                           Wilmington, Delaware 19899
St. Louis, Missouri 63 101                      (302:) 658-6541
(3 14) 5524000                                   Attorneys for Defendants








Dated: August 2, 1999







RLFl-2039349-1

SNIPPETS:

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

MEMORANDUM IN SUPPORT OF DEFENDANTS':,

SECOND MOTION FOR SUMMARY JUDGMEN;?`.

The General Partner Had Amyle Authority Under The

Distributions Following Dissolution Of The Partnership

Appraisals" Conformed With The Partnership Agreement.

In re Cencom Cable Income Partners, L.P. Liticr., Del.

Cencom Cable Income Partners, L.P., a cable television limited

Court has previously ruled on numerous issues implicated in Plaintiffs' Amended

disposed of most of those issues in its October 1997 Summary Judgment Opinion.'

First, whether the Defendants breached duties owed the Limited Partners in connection with

whether the General Partner had authority under the Partnership Agreement2 to terminate

whether the Defendants breached duties owed the Limited Partners in connection with the

`Citations to the Court's October 1997 Summary Judgment Opinion are in the form "Opinion at

(A copy of the Partnership Agreement is included in the Appendix as Exhibit B.)

no genuine issue as to any material fact and that the moving party is entitled to a judgment


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