 |
 |
to fill out a simple form to connect to Personal Injury Lawyers in your area.
|
|
|
|
|
CAPROC Manager4/18/2005
This case stems from a dispute between shareholders of the Delaware limited liability company CAPROC LLC ("CAPROC"). CAPROC is a real estate operating company formed to own, acquire, develop, operate, lease and manage real estate and mortgages. CAPROC is governed by its operating agreement, entitled the Second Amended and Restated Limited Liability Company Agreement (the "LLC Agreement" or "Agreement"). The Agreement specifically designates CAPROC Manager as CAPROC's Managing Shareholder. The Policemen's & Firemen's Retirement System of the City of Pontiac and The General Employees' Retirement System of the City of Pontiac (collectively "Defendants") together own over 50% of CAPROC's outstanding shares. Defendants seek to remove CAPROC Manager as the Managing Shareholder of CAPROC and purport to have done so by a majority shareholder vote.
In response to Defendants' actions, CAPROC Manager and CAPROC brought this suit for, among other things, entry of a status quo order and a declaration under 6 Del. C. § 18-110 that CAPROC Manager remains the Managing Shareholder of CAPROC. Subsequently, the parties stipulated to an order maintaining CAPROC Manager as Managing Shareholder and in charge of day-to-day operations, while barring it during the pendency of this dispute from taking any actions beyond routine operations conducted in the ordinary course of business (the "Status Quo Order"). The Court entered the Status Quo Order on February 23, 2005.
Defendants have filed a Motion to Dismiss in Favor of Arbitration. They argue that the LLC Agreement's arbitration clause, § 12.7, is broad in scope and applies to any "dispute or controversy arising under" the Agreement. Defendants argue that CAPROC's claims arise under the LLC Agreement and therefore must be submitted to arbitration. CAPROC denies that this action is subject to the arbitration clause and contends that it falls within this Court's jurisdiction because CAPROC has no adequate remedy at law. For the reasons stated in this letter opinion, I conclude that Plaintiffs' claims are subject to arbitration under the LLC Agreement. Thus, the Court will grant Defendants' Motion to Dismiss.
I. ANALYSIS
The Delaware Limited Liability Company Act (the "Delaware Act") provides the statutory basis for Delaware LLCs. "The basic approach of the Delaware Act is to provide members with broad discretion in drafting the Agreement and to furnish default provisions when the members' agreement is silent." In fact, the statute itself states that " t is the policy of this chapter to give the maximum effect to the principle of freedom of contract and to the enforceability of limited liability company agreements."
The Court of Chancery does not have jurisdiction over claims that are properly committed to arbitration because the availability of arbitration provides an adequate legal remedy. Delaware public policy favors resolution of disputes through arbitration and requires that any doubt regarding the arbitrability of a dispute be resolved in favor of arbitration. If a potentially applicable arbitration provision exists, the court will only conclude a dispute is not covered when the court finds either "an express provision excluding the dispute from the coverage of the arbitration clause or the most forceful evidence of purpose to exclude . . . ."
When determining the arbitrability of a claim the court is faced with two issues:
First, the court must determine whether the arbitration clause is broad or narrow in scope. Second, the court must apply the relevant scope of the provision to the asserted legal claim to determine whether the claim falls within the scope of the contractual pr
Page 1 2 3 4 5 Delaware Personal Injury Attorneys
Personal Injury Lawyers
|
| |
to fill out a simple form to connect to Personal Injury Lawyers in your area.
|
|