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1
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LETTER OPINION
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EXTRACTED KEY WORDS
DEFENDANTS OPINIONS DISCOVERY PLAINTIFFS FACTS PARTY SEEKING COMPEL WITNESS BASIS ALLEGATIONS CHANCERY RULE LITIGATION SHOWING NON-TESTIFYING PFIZER SCHEDULING ORDER MOTION DAMAGES INTERROGATORIES NONTESTIFYING PREVAILING FEDERAL COURTS PIZZA TIME THEATRE TIME THEATRE SECURITIES AGER JANE TRAINING SCHOOL SATISFY CONTRARY AUTHORITY |
COURT OF CHANCERY
OF THE ~~yyy-q
j L i> i L
STATE OF DELAWARE
WILLIAM B. CHANDLER III
July 10 ,2001
Norman M. Monhait A. Gilchrist Sparks, III
Rosenthal Monhait Gross Morris, Nichols, Arsht
& Goddess, P.A. & Tunnel1
P.O. Box 1070 P.O. Box 1347
Wilmington, DE 19899 Wilmington, DE 1989%~~ $
Philip Trainer, Jr.
Ashby & Geddes
P.O. Box 1150
Wilmington, DE 19899
Re: In re Speedway Motor-sports, Inc. Derivative Litig.
Consol. Civil Action No. 18245
Dear Counsel:
This is my decision on defendants' motion to compel. Defendants ask
that this Court compel plaintiff Crandon Capital Partners, LLP to produce
more complete responses to defendants' interrogatories.
defendants seek to learn the identity of one of the plaintiffs' expert
witnesses, a "real estate professional" who calculated plaintiffs' alleged
damages, as well as any facts or opinions formulated by that witness.
Defendants insist that our cases and rules require plaintiffs to have a factual
basis for each allegation in their complaint and to provide such a factual
basis when answering interrogatories regarding those allegations.
Defendants correctly state the general rule that plaintiffs must provide
the factual basis for their allegations in interrogatory requests. Plaintiffs,
however, point out that Court of Chancery Rule 26(b)(4)(B) shields non-
testifying (sometimes referred to as "consultative") experts from such
discovery. Rule 26(b)(4)(B) states that
[a] party may discover facts known or opinions
held by an expert who has been retained or
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2
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MEMORANDUM OF LAW IN OPPOSITION TO DEFENDANTS MOTION TO COMPEL
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EXTRACTED KEY WORDS
DEFENDANTS COURT RESPONSES INTERROGATORIES BASIS DISCOVERY COMPEL REAL ESTATE COMPLAINT ALLEGATIONS CONSULTING EXPERT DAMAGE CHANCERY SPEEDWAY MOTION AFFIDAVIT PARTY MEMORANDUM LAW OPPOSITION MARKET LAS DETERMINATION PURSUANT DISCLOSE FAITH BASIS ROFFE FACTS OPINIONS |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
_________---_----------- __.--- -..----x
IN RE SPEEDWAY MOTORSPORTS, INC. : CONSOLIDATED
DERIVATIVE LITIGATION CIVIL ACTION NO. 18245 NC
-- __.-- - -.----;
MEMORANDUM OF LAW IN OPPOSITION TO
DEFENDANTS'MOTION TO COMPEL
PRELIMINARY STATEMENT
Plaintiff Crandon Capital Partners ("Plaintiff") hereby
submits this Memorandum of Law in opposition t's defendants'
motion and l.etter to compel. further responses to Defendants First
Set of Interrogatories directed to Plaintiff (the
"Interrogatories") .
STATEMENT OF
_L---- FAC!?s
Plaintiff brought this derivative action, which was
subsequently consolidated with another such action, alleging
corporate waste and a breach of fiduciary duty in the sale of
certain real estate assets of nominal defendant Speedway
Motorsports, Inc. ("Speedway" ) to Speedway's Chairman of the
Board and Chief Executj.ve Officer at a price whi.ch plaintiffs
have alleged to be substantially below the true value of the
property.
As Plaintiff's supplementary responses to the
Interrogatories indicate (~3. Exhibit F to lett.er dated May 25,
2001, from A. Gilchrist Sparks and IPhilip Y'rainer, J-r., to
Chancellor Chandler, page 4), Plaintiff hired an expert to
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3
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ANSWER
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EXTRACTED KEY WORDS
DEFENDANT SMITH PARAGRAPH DELAWARE THEREOF COMPLAINT OFFICER COMPENSATION REFER COURT PLAINTIFF ESQUIRE WILMINGTON BRUTON SMITH CHIEF WHEELER VICE PRESIDENT SUBSIDIARIES CLARK BROOKS SUITE MONHAIT ASHBY RODNEY SQUARE SUFFICIENT KNOWLEDGE TRUTH WILLIAM PURCHASE SND |
IN THE COUkT OF CHANCERY OF THE STATE OF DELAWARE ,,I,,,;"
-1
IN AND FOR NEW CASTLE COUNTY
IN RE SPEEDWAY MOTORSPORTS, ) CONSOLIDATED ?, )L
INZ., DERIVATIVE LITIG4TION ) Civil Action No. 18245.-NC .T ..~i~ \
`S;
Defendant 0. Bruton Smith ("Smith"), by and through undersigned
counsel, for his answer to the Cornplaint responds to the numbered
paragraphs thereof as follows:
1. Defendant Smith does not have sufficient knowledge or
inbrmation to form a belief as to the truth of the matters alleged in
paragraph 1 of the Complamt.
2. Denied, except admitted that Speedway Motorsports, Inc.
("Speedway") is a Delaware corporation with a place of business located at U.S.
Highway 29 North, Concord, North Carolina.
3. De-&d, except admitted that Smith is Chairman of the
Esoard and Chief Executive Officer of Speedway and has held those positions
s.ince December 1994., that Smith's compensation from Speedway for 1999 was
$921,000, for 1998 was approximately $1.4 million and for I997 was
approximately $1.4 million
4. Denied except admitted that defendant HA. "Humpy"
Wheeler is President, Chief Operating Officer and a director of Speedway and
has held l:hose positions since December 1994, that Mr. Wheeler is principally
employed by Speedway or its subsidiaries and that his compensation for 1999
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4
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ANSWER
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EXTRACTED KEY WORDS
PARAGRAPH ALLEGATIONS DEFENDANT COMPENSATION SPEAKS SPEEDWAY MOTORSPORTS COUNSEL COMPLAINT OFFICER CLARK BROOKS PURCHASE TRUTH WHEELER THC ALLEGATIONS VICE PRESIDENT DEFENDANT WILLIAM PAAGRAPH DEFENDANT EDWIN EXECUTIVE VICE PRESIDENT TREASURER CHIEF FINANCIAL OFIICER BENTON MARK GAMBILL DIRECTORS DEFENDANT JACK KEMP IJIRECTOR |
.;:
?' ,_,-
IN `THE COURT OF CHANCERY 01; THE STATE OF DELAWARE
?
,`-
IN AND FOR NEW CASTLE COUNTY
IN RE SPEEDWAY MOTORSPORTS, INC.:
UIERIVATIVE LITIGATION
_ _ _ . _ _ _ _ __ _ _ ,_ _ _ _ _ _ _ I _ _ -_ _ _ _ _ _ _ _ _ _ _ _ ._ _ _ _ _ _ _ - _ - - - - - -
Norninal Defendant Speedway Motorsports, Inc. ("Speedway"), by and through
undersigned counsel, answers the Complaint and responds to the numbered paragraphs of the
C'omplaint as follows:
1. Nominal Defendant Speedway does not have sufficient knowledge to
belief as to the truth of the malters alleged in Paragraph 1 of the Complaint, therefore, those
allcgationa are denied.
2. It is admitted that Speedway is a Delaware corporation with a
located at IJ.S. Highway 29 NIrth, Concord: North Carolina. Except as expressly admitted, the
allzgationt; of Paragraph 2 ar,e denied.
?3 It is admitted that 0. Bruton Smith is Chairman of the Board and
Officer of Speedway and has held those positions since December, 1994.. It is further admitted
that Mr. Smith's compensation from Speedway for 1999 was $921,000, for 1998 was
approximately $1.4 million and for 1997 was approximately $1.4 million. Except as specifically
admitted, the allegations of Paragraph 3 are denied.
4. It is admitted that Defendant H.A. "Humpy" Wheeler is President,
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5
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ANSWER
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EXTRACTED KEY WORDS
ALLEGATIONS SPEEDWAY DEFENDANTS WHEELER WILLIAM BROOKS CLARK COMPLAINT SPEAKS PLAINTIFFS O-K SPEAKS PLAINTIFFS CLAIMS DELAWARE CHIEF OFFICER COMPENSATION PRESIDENT ESQ WILMINGTON COURT EDWIN BCNTON MARK JACK KEMP COUNSEL SUFFICIENT KNOWLEDGE TRUTH MOTORSPORTS |
1N `IXE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
1
IN RE SPEEDWAY M0701~!31'01~lX. INC. 1 Consolidated
DERIVATIVE I,ITIGATIC)N 1 Civil Action No. 18245
ANSWIS
Dej`endants H.A. Wheeler, William R. Brooks. Edwin R. Clark. William P. Bcnton, Mark M.
Ga nbill and Jack L. Kemp (collectively. "Defendants") by and through undersigned counsel. hercbq
respond to the respective paragraphs of the Complaint as follows:
I. Defendants do not have sufficient knowledge to form a belief as to the truth of
matters alleged in Paragraph 1 of the Complaint. `1 herefore those allegations are denied.
2. It is admitted that Speedway Motorsports, Inc. ("Speedway") is a Delaware
corporation with a place ol-business located at 1J.S. Highway 29 North, Concord, North Carolina.
Except as expressly admitted, the allegations of Paragraph 2 arc denied.
.i. It is admitted that Smith is Chairman of the Board and Chief Executive Officer of
Sp(:cdway Motorsports, Inc. (" Speedway") and h,as held those positions since December, 1994.
It is fLIrther admitted that Mr. Smith's compensation from Speedway for 1999 was $921,000. for
1998 was approximately S 1.4 million and for 1997 was approximately $1.4 million. Except as
s',ccifically admitted, the alkqatiorts of Paragraph 3 are denied.
3. It is admitted tE.at Defendant H.A. "Humpy" Wheeler is President. Chief
(.,flicer and a Director of SpeecL\vay and has held those positions since December, 1994. It is
1
adrAtted that Mr. Wheeler is. principally employed by Speedway or its subsidiary and that his
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6
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COMPLAINT
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EXTRACTED KEY WORDS
DEFENDANTS INDUSTRIAL PARK LAS VEGAS PRICE DEFENDANT SMITH DIRECTORS PURCHASE REAL ESTATE MARKET PLAINTIFF OFFICER ADJOINING CHALLENGED TRANSACTION ACRES ACREAGE LAS VEGAS AREA JUDGEMENT FEES SALE PRICE CORPORATE WASTE DEMAND CLARK RELEVANT TIMES BUSINESS CHIEF CASH COMPENSATION PRESIDENT BROOKS CONSTRUCTION |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
---x
CRANDON CAPITAL PARTNERS,
Plaintiff,
V. Civil Action No.
r.-
0. BRUTON SMITH, H.A. "Humpy"
WHEELER, WILLIAM R. BROOKS, EDWIN : ,
)
R. CLARK, WILLIAM P. BENTON, MARK :
M. GAME:ILL and JACK L. KEMP, ,j
Defendants,
and
SPEEDWAY MOTORSPORTS, INC.,
Nominal Defendant.---4
COMPLAINT
Plaintiff, by and through its undersigned attorneys,
alleges upon information, and belief, except for paragraph 1, which
is alleged on knowledge as follows:
1. Plaintiff Crandon Capital Partners owns and has, at
all relevant times, owned shares of common stock of Speedway
Motorsports, Inc. ("Speedway" or the `Company") . It brings this
action derivatively in the right and for the benefit of Speedway.
2. Speedway is a Delaware corporation with its principal
place 'of business located at U.S. Highway 29 North, Concord, North
Carolina.
3. Defendant 0. Bruton Smith ("Smith") is Chairman of the
Board and Chief Executive Officer of Speedway and has held those
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