IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
HART HOLDING COMPANY
INCORPORATED AND REEVES
INDUSTRIES, INC., i
Plaintiffs,
V . i C. A. No. 11514
DREXEL BURNHAM LAMBERT i
INCORPORATED, GUILDFORD
CAPITAL, GLENCOE INVESTORS ;
and RALEIGH INVESTMENT
MANAGEMENT, ;
Defendants.
MEMORANDUM OPINION
`\ Date Submitted: September 27, 1991
Date Decided: May 28, 1992
Stephen E. Jenkins, Esquire, and Keith R.. Sattesahn, Esquire, of
ASHBY & GEDDES, Wilmington, Delaware; Of Counsel: Richard J.
Wiener, Esquire, and Debra L. Brown, Esquire, of CADWALADER,
WICKERSHAM & TAFT, New York, New York; Attorneys for Plaintiffs.
Martin P. Fully, Esquire, of MORRIS, NICHOLS, ARSHT & TUNNELL,
Wilmington, Delaware; Of Counsel: Daniel R. Murdock, Esquire, of
DONOVAN, LEISURE, NEWTON & IRVINE, New York, New York; Attorneys
for Defendant Guildford Capital.
Robert K. Payson, Esquire, and James F. Burnett, Esquire, of POTTER
ANDERSON & CORROON, Wilmington, Delaware; Of Counsel: Theodore N.
Miller, Esquire, of SIDLEY & AUSTIN, Chicago, Illinois; Attorneys
for Defendant Raleigh Investment Management.
ALLEN, Chancellor
In this action for fraud, for breach of contract and for
breach of fiduciary duty, Hart Holding Company Incorporated and its
subsidiary, Reeves Industries, Inc:., seek, among other relief, to
cancel certain shares of Reeves common stock that are currently
registered in the name of several defendants and to recover
damages. The defendants who hold certain shares of Reeves stock
include two California limited partnerships, Guildford Capital,
L.P. and Raleigh Investment Management, L.P., and a Delaware
limited partnership, Glencoe Investors, L.P. Drexel Burnham
Lambert, Incorporated has also been named as a defendant; however,
SNIPPETS:
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
HART HOLDING COMPANY INCORPORATED AND REEVES
INCORPORATED, GUILDFORD
and RALEIGH INVESTMENT
Stephen E. Jenkins, Esquire, and Keith R..
Sattesahn, Esquire, of ASHBY & GEDDES, Wilmington, Delaware; Of Counsel: Richard J. Wiener,
In this action for fraud, for breach of contract and for breach of fiduciary duty, Hart
Lambert, Incorporated has also been named as a defendant; however, litigation of claims
Now pending are several motions made by both parties in this case related to jurisdiction of
Jurisdiction over these two foreign partnerships has purportedly been effectuated through
They assert that their only relationship with this jurisdiction is that they own shares of a
of alleged discovery abuses committed by defendants, Guildford, ' Raleigh and Glencoe after
For the reasons set forth below, I conclude that the personal jurisdiction of this court does
The background of this a c t i o n and the theory of the plaintiffs' complaint have been
See Hart Holdinu v. Drexel Burnham Lambert,
Plaintiffs allege that a conspiracy occurred in connection with Hart Holding Company's
See Bergman Dep.
and several partnerships owned by Milken and other Drexel employees.
Prior to March 23, 1990, Guildford allegedly transferred to Glencoe Investors, a Delaware
the "constitutional touchstone remains whether the defendant purposefully established
The privilege against suit in a jurisdiction with which one has established no contact, is an
Before turning to plaintiffs' arguments, it is necessary, in my mind, to dilate briefly on
Discovery has exposed no continuing or sporadic connection between either Guildford and
Plaintiffs also allege that both partnerships were created as compensation devices for Drexel
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