SCHARF v EDGCOMB CORPORATION - Legal Case Documents

EDGCOMB
COURT
COUNSEL
EVIDENCE
PLAINTIFF
DEFENDANT EDGCOMB CORPORATION
STATUTE
LANGUAGE
DEL
LIMITATIONS
SUMMARY JUDGMENT
INDEMNIFICATION
CONFIDENT
FACTS
CERTAINTY
AGREEMENT
OPPOSING
DELAWARE
COMPLAINT
CONTENTION
AFFIDAVIT
TESTIMONY
OPPOSITION
ELIZABETH
CONNECTICUT AVENUE
WASHINGTON
UNITED STATES
SCHARF ARGUES
DEPOSITION

             IN THE COURT OF CHANCERY OF THE STATE OF DELAV&E  ' `---" ' ' `,: ":, j
                          IN AND FOR NEW CASTLE COUNTY

MICHAEL J. SCHARF,

                        Plaintiff,

       V.

EDGCOMB CORPORATION, a Delaware
Corporation,

                        Defendant.


             REPLY BRIEF OF DEFENDANT EDGCOMB CORPORATION  -(
    TO PLAINTIFF'S ANSWERING BRIEF IN OPPOSITION TO EDGCOMB
              CORPORATION'S MOTION FOR SUMMARY JUDGMENT

                                 MORRIS, JAMES,  HITCHENS &WILLIAMS LLP
                                 P. Clarkson  Collins, Jr.
                                 Stephanie M. Tarabicos
                                 222 Delaware Avenue, 10" Floor
                                 P.O. Box 2306
                                 Wilmington, DE 19899
                                 302-888-6800
                                 Attorneys for Defendant Edgcomb Corporation

OF COUNSEL:

Elizabeth B. Sanclza
LeBoeuf, Lamb, Greene & MacRae,  L.L.P.
1875 Connecticut Avenue, N.W.
Washington, D.C. 20009
202-986-8036

Pierre F. de Ravel d'Esclapon
LeBoeuf,  Lamb, Greene & MacRae, L.L.P.
125 West 551h Street
New York, NY 100 10
212-484-8000

February  16,200l



                                 TABLE OF CONTENTS

EDGCOMB CORPORATION, a Delaware

MICHAEL J. SCHARF,

REPLY BRIEF OF DEFENDANT EDGCOMB CORPORATION -(TO PLAINTIFF'S ANSWERING BRIEF IN OPPOSITION

CORPORATION'S MOTION FOR SUMMARY JUDGMENT

Elizabeth B. Sanclza LeBoeuf, Lamb, Greene & MacRae, L.L.P. 1875 Connecticut Avenue, N.W.

The Evidence Establishes That Scharf Could Be And

The Correspondence Exchanged Between Counsel

James v. Glazer, Del.

United States v. Chesapeake & Del.

issue of material fact that plaintiff, Michael J. Scharfs complaint against

indemnification for legal fees incurred by Scharf, a former offker, director and shareholder

$ 8 106 applied by this Court in its December 2,

the statute of limitations began to run no later than March 1993 and that it had expired

that such language constitutes a waiver.

has to discuss the cases cited by Scharfin his opposing brief to show that this case does

The Evidence Establishes That Scharf Could Be And Was Confident That Any Claim Against Him

`Cases cited by Scharf do not support his contention that his claims are timely under the

It is ironic that Scharf argues that his subjective belief as to when the investigation

Scharf affirmatively made in his 1995 letter seeking indemnification, and testimony under

deposition, Schati, who had personally profited over $20 million on prior Edgcomb

the changed statements in Scharf s affidavit do not create a genuine

Supr., 430 A.2d 469, 472 (installment vehicle sales agreement and deficiency balance suit);

Elizabeth B. Sandza, Esq.

2 . PLAINTIFFS ANSWERING BRIEF IN OPPOSITION TO DEFENDANTS MOTION FOR SUMMARY JUDGMENT

EDGCOMB
DELAWARE LAW
COURT
MERGER AGREEMENT
MOTION
FRANK
COUNSEL
CERTAINTY
SUMMARY JUDGMENT
INDEMNIFICATION
STATUTE
DEFENDANT
LIMITATIONS
SCHARF AFF
PLAINTIFFS
EVIDENCE
CONFIDENT
DELAWARE GENERAL CORPORATION
JOHNSON DEP
INDEMNIFY
LEGAL STANDARD GOVERNING
OBLIGATION
COMPLAINT
GREENBERG
LIMITATIONS DEFENSE
TESTIMONY
DIRECTORS
LITIGATION
REPRESENTATION

             IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

                              IN AND FOR NEW CASTLE COUNTY


MICHAEL J. SCHARF,

                        Plaintiff,

       V.                                                 Civil Action No. 152qg              u
                                                                              :.- -.  ;=:
                                                                              ..-.,
EDGCOMB CORPORATION,                                                          .l_i            L.2,
                                                 i                            # :", --             
a Delaware Corporation,                                                       -  .,,
                                                                              -..             & 
                                                                              I`;:,
                                                 ;                            ,7-z            2    
                                                                                              -h
                        Defendant.               >                            _ -.i.          CT-3 
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                      PLAKNTIFF'S  ANSWERING BRIEF IN OPPOSITION                        -~
                    TO DEFENDANT'S MOTION FOR SUMMARY JUDGMENT


                                         MORRIS, NICHOLS, ARSHT  & TUNNELL
                                         A. Gilchrist Sparks, III
                                         S. Mark Hurd
                                         1201 N. Market Street
                                         P.O. Box 1347
                                         Wilmington, DE 19899-1347
                                         (302) 658-9200
                                           Attorneys for Michael J. Scharf

OF COUNSEL:

Bonnie Steingart
FRIED, FRANK, HARRIS, SHRIVER  & JACOBSON
One New York Plaza
New York, NY 10004-l 980
(212) 8594000

Jonathan P. Scott
FRIED, FRANK, HARRIS, SHRIVER  & JACOBSON
100 1 Pennsylvania Avenue, N. W.
Washington, D.C. 20004-2505
(202) 639-7000

TO DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

FRIED, FRANK, HARRIS, SHRIVER & JACOBSON

Delaware General Corporation Law, Edgcomb Agrees To

LEGAL STANDARD GOVERNING EDGCOMB'S MOTION

MR. SCHARF "COULD BE CONFIDENT ANY CLAIM

BEEN RESOLVED WITH CERTAINTY BEFORE SEPTEMBER

The Fullest Extent Permitted By Delaware Law,

The motion for summary judgment filed by Defendant Edgcomb Corporation

is the latest instance of Edgcomb's long-running effort to avoid its obligation to

by the three-year statute of limitations, must be denied for any one of three independent

the record is replete with evidence that the claims that were part of an extensive

"resolved with certainty" more than three years before the Complaint was tiled.

Edgcomb agreed to provide indemnification to the "fullest extent permitted" by Delaware law,

unambiguously agreed to indemnify Mr. Scharf "to the fullest extent permitted under Delaware

(Scharf Aff.

Edgcomb entered into the Merger Agreement

arising from actions taken or omissions to act as directors or officers of or its

and depositton testimony is cited in the form "Dep.

Frank were the best counsel available."

Fried Frank was engaged to conduct a joint representation of Mr. Scharf and Steven Greenberg,

56; see also Johnson Dep.

litigation, Fried, Frank did continue to represent him by monitoring the status of the

"waiver by contract or any other of plaintiffs contentions," including whether the Merger

Agreement "precludeEdgcomb from asserting a statute of limitations defense at all.

3 . OPENING BRIEF OF DEFENDANT EDGCOMB IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT

EDGCOMB
STATUTE
LIMITATIONS
COURT
DELAWARE
MOTION
DEFENDANT EDGCOMB CORPORATION
SUMMARY JUDGMENT
INDEMNIFICATION
DEL
MERGER AGREEMENT
CHANCERY
COLLINS AFF
MICHAEL
GENUINE
FRIED FRANK
COMPLAINT
LEGAL SERVICES
STIFEL FINANCIAL CORPORATION
APPLICABLE LAW
CONNECTION
CONFIDENT
PROVISION
INDEMNITY
SCHARF DEPO
WASHINGTON
PRELIMINARY STATEMENT
EMERALD PARTNERS
LEXIS

                IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

                             1N AND FOR NEW CASTLE COUNTY


MICHAEL  .I.  SCHARF,

                       Plaintiff,
                                                     ;
       V.                                                    C.A. No. 15224-NC       73
                                                     ;                                           cl
                                                                                  c$  -
EDGCOMB CORPORATION, a Delaware                      >                            G;;
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corporation,                                                                      -g:---  -e*
                                                                                                
                                                                                  $;I,.  I  5  `ZE
                                                                                                 a 
                       Defendant.                     I                           7 `-             
                                                                                                   
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                                                                                  u,<-. --
                OPENING BRIEF OF DEFENDANT EDGCOMB CORPORATIONZ;, 2
                                     IN SUPPORT OF ITS                                    `4.
                             MOTION FOR SUMMARY JUDGMENT

                                     MORRIS, JAMES,  HITCHENS &WILLIAMS LLP
                                     P. Clarkson  Collins, Jr.
                                     Stephanie M. Tarabicos
                                     222 Delaware Avenue, 10th Floor
                                     P.O. Box 2306
                                     Wilmington, DE 19899
                                     302-888-6800
                                     Attorneys for Defendant Edgcomb Corporation

OF COUNSEL:

Elizabeth B. Sandza
LeBoeuf, Lamb, Greene & MacRae, L.L.P.
1875 Connecticut  ,4venue,`N.W.
Washington, D.C. 20009
202-986-8036

Pierre F. de Ravel d'Esclapon
LeBoeuf,  Lamb, Greene & MacRae, L.L.P.
125 West 55" Street

MOTION FOR SUMMARY JUDGMENT

PRELIMINARY STATEMENT 1

EDGCOMB IS ENTITLED TO SUMMARY JUDGMENT

BECAUSE THERE IS NO GENUINE ISSUE OF MATERIAL

Cochran v. Stifel Financial Corporation No. 17350,200O Del.

MICHAEL J. SCHARF,

OPENING BRIEF OF DEFENDANT EDGCOMB CORPORATION

in connection with an investigation conducted by the Securities and Exchange

Scharf s indemnification claim lacks merit for a number of reasons,' none

claim is barred as a matter of law by the statute of limitations.

Scharf himself has admitted under oath that he was confident he was no longer under

billed Scharf for legal services performed in co-nnection with the SEC investigation and

Harrison ("Fried Frank") to represent them jointly in connection with an investigation

by the SEC. Complaint, 7 13.

and 2 to Collins Aff.

SEC." Scharf Depo., at 46-47, Ex.

Merger Agreement at

only "to the fullest extent permitted under Delaware or other applicable law.

If the director or officer's indemnity claim is not viable

to Collins Aff This Court has construed this provision to

Another Chancery Court decision, Co&ran v. Stifel Financial Corporation, No. 17350,200O Del.

LEXIS 58, attached hereto as Ex.

See Berlin v. Emerald Partners,

LeBoeuf, Lamb, Greene & MacRae, L.L.P. 1875 Connecticut Avenue, N.W. Washington, D.C. 2009

4 . REPLY BRIEF OF PLAINTIFF IN SUPPORT OF MOTION FOR PARTIAL SUMMARY JUDGMENT

DEFENDANT
COURT
EDGCOMB
INDEMNIFICATION
OFFICER
PLAINTIFFS
MOTION
STATUTE
DISCOVERY
LAW
OPP
DEFENSE
PARTIAL SUMMARY JUDGMENT
LIMITATIONS
RESOLVE
DEF
MATTER
DUTY
REASON
ALLEGES
COMPLAINT
DETERMINATION
DELAWARE
HEFFEMAN
CORN
REQUESTS
BY-LAWS
SUCCESSFUL
VIOLATION

                IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

                              IN AND FOR NEW CASTLE COUNTY


-MICHAEL  J. SCHARF

                        Plaintiff,             :
                                               ;
       V.                                                Civil Action No. 15224-NC

EDGCOMB CORPORATION, a
Delaware corporation

                        Defendant.



                                      REPLY BRIEF OF PLAINTIFF
                         MICHAEL J. SCHARF IN SUPPORT OF HIS
                       MOTION FOR PARTIAL SUMMARY JUDGMENT




                                               MORRIS, NICHOLS, ARSHT &  TUNNELL
                                               A. Gilchrist Sparks, III
                                               S. Mark Hurd
                                               1201 N. Market Street
                                               P.O. Box 1347
                                               Wilmington, DE 19899
                                               (301) 658-9200
                                                    Attorneys for Michael J. Scharf

OF COUNSEL:

Harvey L. Pitt
Bonnie K. Steingart
Karl A. Groskaufmanis
Jonathan P. Scott
FRIED FRANK  HAREUS  SHRIVER  & JACOBSON
100 1 Pennsylvania Avenue, N. W., Suite 800
Washington, DC 20004-2505
(202) 639-7000

June 6, 2000

MICHAEL J. SCHARF IN SUPPORT OF HIS

NO GE+KJINE ISSUES OF MATERIAL FACT EXIST THAT WOULD PRECLUDE THE COURT FROM RULING ON

DEFENDANT'S CLAIM THAT IT NEEDS DISCOVERY BEFORE THE COURT DECIDES PLAINTIFF'S MOTION IS

Heffeman v. Pacific Dunlop GNB Corp.,

Merritt-Chapman & Scott Corn.

Defendant's statute of limitations claim, director and officer indemnification provisions are

Scharf v. Edgcomb Corn., Del.

in a course of conduct clearly intended to wear down the individual's resolve and resources.

Such tactics, if sanctioned, threaten to make indemnification rights available only in theory.

In this case, the Defendant received 4,700 pages of documents from Mr. Scharf

Answering Brief in Opposition to Plaintiffs Motion for Partial Summary Judgment ("Def.

Opp.") at 12), these were documents produced as a result of the Defendant's speczjic requests.

officer and director and was completely successful in his defense of that investigation.

Merger, Edgcomb's By-Laws stated that:

Defendant's obligations under Section 145of the Delaware General Corporation Law.

in violation of a duty to Edgcomb shareholders.

was not sued by reason of his status as a director.

The complaint, however, alleged .that the

By contrast, in this matter, Mr. Scharf seeks indemnification for an investigation into

1994) ("The complaint also alleges that at various

a determination as to why Mr. Scharf sought indemnification at the time he

5 . OPENING BRIEF OF PLAINTIFF IN SUPPORT OF MOTION FOR PARTIAL SUMMARY JUDGMENT

EDGCOMB
INDEMNIFICATION
OFFICER
SUMMARY JUDGMENT
PROCEEDING
DELAWARE
MATERIAL FACT
COURT
DEFENDANT
PARTY
DIRECTORS
FRIED FRANK
MOTION
GENUINE
SCHARF AFF
PLAINTIFF
OBLIGATION
SUCCESSFUL
MERGER AGREEMENT
PARTIAL SUMMARY JUDGMENT
LEGAL STANDARD GOVERNING
MANDATORY
FRIED FRANK HARRIS
FRANK HARRIS SHRIVER
REPRESENTATION
DECLARATORY JUDGMENT
GROSKAUFMANIS JONATHAN
PENNSYLVANIA AVENUE
WASHINGTON

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

IN AND FOR NEW CASTLE COUNTY

MICHAEL J. SCHARF,

Plaintiff, ::
V. : Civil Action No. 15224-NC
.
EDGCOMB CORPORATION,
a Delaware corporation,

Defendant.

OPENING BRIEF OF PLAINTIFF
MICHAEL J. SCHARF IN SUPPORT OF HIS
MOTION FOR PARTIAL SUMMARY JUDGMENT

A. Gilchrist Sparks, III
S. Mark Hurd
MORRIS NICHOLS ARSHT & TUNNELL
1201 N. Market Street
P.O. Box 1347 ..-
Wilmington, DE 19899-1347
(302) 658-9200
Attorneys for Plaintiff . _
OF COUNSEL: i

Harvey L. Pitt
Karl A. Groskaufmanis
Jonathan P. Scott
FRIED FRANK HARRIS SHRIVER & JACOBSON
1001 Pennsylvania Avenue, N.W., Suite 800
Washington, DC 20004-2505
(202) 639-7000

March 3 1,200O

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