ORIGINAL
COURT OF CHANCERY
OF THE
STATE OF DELAWARE
W I L L I A M T. ALLEN July 3, 1991 COURT HOUSL
C...NC~"OP WILMINGTON. DELAWARE lS8Ol
Carolyn D. Mack, Esquire Charles F. Richards, Jr., Esquire
Greenfield & Chimicles Richards, Layton & Finger
One Rodney Square One Rodney Square
P. 0. Box 1035 P. 0. Box 551
Wilmington, DE 19899 Wilmington, DE 19899
Wayne N. Elliott, Esquire Martin P. Tully, Esquire
Prickett, Jones, Elliott, Morris, Nichols, Arsht ;. g
Kristol & Schnee & Tunnel1 LC
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1310 King Street 1201 N. Market Street - .
T; cL .;.-
P. 0. Box 1328 P. 0. Box 1347
Wilmington, DE 19899 Wilmington, DE 19899 h:
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RE: In Re McCrory Parent Corporation _. .
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Consolidated Civil Action No. 12006 L. `=.
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Dear Counsel:
Defendants in these consolidated class actions by bond holders
have moved for an order staying discovery pending determination of
motions to dismiss the amended complaints on grounds (1) that they
fail to state cl.aims upon which relief can be granted, (2) that, in
all events, this is an inconvenient forum and (3) with respect to
one individual defendant, that the court lacks in personam
jurisdiction.
Plaintiffs resist the granting of a stay. They have recently
filed a motion seeking the appointment of a receiver pendente lite
for the three corporate defendants (McCrory Corporation, McCrory
Parent Corporation and E-II Holdings, Inc.) or alternatively, a
preliminary injunction against those corporations or Riklis Holding
Corporation, a Nevada corporation, from engaging in transactions
transferring cash or other assets among themselves or affiliates
All Counsel
July 3, 1991
SNIPPETS:
Defendants in these consolidated class actions by bond holders have moved for an order
They have recently filed a motion seeking the appointment of a receiver pendente lite for the
All Counsel July 3, 1991 Page 2 pendente U.&. Plaintiffs urge that the grant of a motion
Determination of a motion of this,type requires the court to exercise its sound judgment in
Efficiency is promoted by the rule that, absent special circumstances, Sdiscovery will be
In the latter case, discovery that occurred pending the granting of the motion woulci less
Fairness to plaintiff may require risking the cost entailed in discovery even when defendant
Thus, in each instance, the court must make a particularized judgment evaluating the weight
I conclude that there is insufficient threat of injury to plaintiffs arising from a
M o r e o v e r, I will require, as a condition to granting the relief sought, that E-II give
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