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HomeMy WebLinkAbout97-05635 'J o ~ ~ . ~ a ~ ~ :\ ~ It . ~ , ~ H n ( ~ .t- o .. ~ ~ \0 I() ;-J :.0 . . . t"- ~ -----.. . ~. ANIL THAKRAR. Plaintiff. : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA v. : ACTION IN EQUITY : 97-5635 EQUITY TERM WILLIAM H. HOOKE, JR., KURT E. SUTER; JEFFREY A. AUSTIN; EAGLE DEVELOPMENT CORPORATION; AND CUMBERLAND MOTOR INNS, INC. Defendants. PRAECIPE TO DISCONTINUE Please mark the above-captioned case discontinued. Respectfully submitted, Date: 01115)')0 ~~ Allen C. Warshaw, Esquire Attorney Id No. 17 I 45 Duane, Morris & Heckscher LLP 305 North Front Street, 5th Floor P.O. Box 1003 Harrisburg, PAl 71 08- 1003 (717) 237-5500 Attorneys for Ani! and Neema Thakrar ,. 1100\43191.1 -----.> LAW OfflCCS or DUANE, MORRIS 11 HECKSCHER LLP 30~ NORTH F'RONT STRE(T, PO, BOX 1003 HARRISBURG. PA 17108-1003 '"------..1 ANIL THAKRAR, Plaintiff, IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA v. WILLIAM H. HOOKE, JR.; KURT E. SUTER; JEFFREY A. AUSTIN; EAGLE DEVELOPMENT CORPORATION; AND CUMBERLAND MOTOR INNS, INC. ACTION IN EQUITY .... 97- 5f.j~ Defendants. ACCEPTANCE OF SERVICE I, Willian A. Duncan, Esquire, hereby state that I am authorized to accept service upon William H. Hooke, Jr., Curt E. Suter, Jcffrey A. Austin, Eagle Development Corporation, and Cumberland Motor Inns, Inc., and that hcrcby acknowledge and accept service of the Complaint in Equity on their bchalf. , 0c:t~ \ ~ I ! 1ft- ~~~ O\^- \\>J\f'1~~~ William A. Duncan, Esq. ;..-: <", '- ~ " C': I'.: , - .. , ~ f~ , . ( . . , -, , \": \..:.- ; - . CJ , ' l- I ,. '. I -:.Jl , ,j l_ - ~ ,.. , !_1- . , ... r-- .) (1 t.....i '" lJ ~ c-- ?C '. , I , I' 'tl l:l ~;S III '" ",::j Z . .... 0 0 <:> ~~ .... . Ul '" . ... ..... I->U'" tol !:l. .... ..... ;:jZc:l ~ l~~'~ ""Ul oM .... III i!!l~ ... o 'tl c:l ~ . c:l oM ,; '" .. Q Ill.. > ~'" III O$1i..... i:J ~>. ... .., U .. ~ ~., ~ o . "" ....'" Z ~~ . . Z I-> '" tol ....~'" ~ ~E':1f > '" I-> 0 0 . 8",GJ !:) u!c5..!f I->U ~ :ctol<o:>: '" ~ ~ '" I-> o-l tol 8~E .::> . tol! ~ ~ :c"'<e; ~..;~'" ::j l;) tol ::> I-> i5~g o-l ::jl-> ~I .... "''''l:> Z Z :a ....::>tol~ ....u.... ~"'.., . . . . Plaintiff : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA : ACTION IN EQUITY 9? _ s" 3 5' ~ -r..u.- ANIL THAKRAR, v, WILLIAM H. HOOKE,1R.; KURT E. SUTER; JEFFREY A. AUSTIN; EAGLE DEVELOPMENT CORP. and CUMBERLAND MOTOR INNS, INC., Defendants ANSWER I. Admitted. 2. Denied. The primary place of business of William H. Hooke, Ir, is 329 S.Hanover Street, Carlisle, Pennsylvania, not 55 West Church Avenue, Carlisle, Pennsylvania. 3. Admitted. 4. Denied. The individual identified is Jeffrey S. Austin not Ieffrey A. Austin. 5. Admitted. 6. Admitted. 7. Admitted. 8. Denied. It is a le8al conclusion that Exhibit A attached to the Complaint represents an enforceable agreement between the parties, it is admitted however that there eKists such a written document. 9. Denied. It is a legal conclusion that Exhibit A attached to the Complaint represents an enforceable agreement between the parties, it is admitted however that there eKists such a written document that contains the phrase referred to in paragraph 9, 10. Denied. It is a legal conclusion that Exhibit A attached to the Complaint represents an enforceable agreement between the parties, it is also denied that the writing referred to "land located in Cumberland County", rather the writing referred to a specific 26 acre tract of land known as the "Bernard property". 11. Denied. It is a legal conclusion that Exhibit A attached to the Complaint represents an enforceable agreement between the parties, it is admitted however that there exists such a written document that contains the language averred.. 12. Denied. It is a legal conclusion that Exhibit A attached to the Complaint represents an enforceable agreement between the parties. It is also denied that Plaintiff did contribute $125,000.00 in connection with the writing described in Exhibit A attached to Plaintifrs Complaint. 13. Denied in that Defendants are unable, from the phrasing of the questions to ascertain whether Plaintiff avers that the alleged Agreement was signed on July 3, 1980 or whether the corporation called Eagle Development Corporation was formed July 3, 1980. It is admitted that a corporation called Eagle Development Corporation was formed. 14. Denied to the extent that Exhibit A attached to Plaintifrs Complaint was not the basis for the formation of a corporation and subsequent membership on the Board of Dilectors. 15. Denied. The parties did not purchase any land, to the contrary, Eagle Development Corporation purchased land in Cumberland County and constructed a Holiday Inn. 16. Denied to the extent that Exhibit A attached to Plaintiffs Complaint was not the basis for the formation of a corporation and subsequent membership on the Board of Directors. 17. Denied. Exhibit A attached to Plaintiffs Complaint was not the basis for any actions taken with regard to the later purchase of land or the formation of a corporation. 18. Denied. Exhibit A allached to Plaintiffs Complaint was not the basis for any actions taken with regard to distribution of shares of the corporation and membership on the Board of Directors. 19. Denied. Exhibit A attached to Plaintifrs Complaint was not the basis for any actions taken with regard to further development. It is admitted that Cumberland Motor Inns, Inc. did in fact lease and develop land purchased by Eagle Development Corporation and constructed and currently operates an Econo-Lodlle Motel. 20. Admitted that the averments stated in paragraph 20 are correct to the extent that the development has occurred on land later purchased by Eagle Development Corporation. 21. Admitted that each of the Individual Parties served on the Board of Directors of Defendlll1t Corporations for the period in question, denied that they all participated in all major decisions involving the development of the Land, to the contrary "the Land" as referred to by Plaintiff was never purchased IlI1d therefore never developed. Additionally, while Plaintiff attended Board meetings, he did not participate in management discussions. 22. Admitted that Plaintiff provided minimal or no assistance with the management of the Holiday Inn and the Econo-Lodge. It is denied however as to Hooke, Suter and Austin. To the contrary, Hooke, Suter and Austin provided substantial assistance with the management of the Holiday Inn and the Econo-Lodge. It is admitted that they received no compensation for their work. 23. Admitted that payments were made to the shareholders. It is denied that the term "distribution of income" applies to the payments. 24. Admitted as to the meeting of shareholders and vote to amend by-laws. It is denied as to any vote or motion to remove Plaintiff from the Board of Directors. 2S. Denied. Plaintiff is still a shareholder and is not excluded from shareholder meetings. 26. Admitted. 27. Admitted. 28. Admitted. 29. Denied. The management functions are performed by Central Management Services and not the two corporations or their employees. It is further denied that the functions require only minimal time, to the contrary, Central Management Services provides valuable management services. 30. Admitted that payment occurred. Denied that the services provided lacked the requisite value to support the payment. 31. Admitted that payment occurred. Denied that the services provided lacked the requisite value to support the payment. 32. Admitted that payment occurred. Denied that the services provided lacked the requisite value to support the payment. 33. Admitted that payment occurred. Denied that the services provided lacked the requisite value to support the payment. 34. Admitted. 35. Denied. Payments were made in the ordinary course of business for valuable services provided. COUNT I . Breach of Contract 36. The answers contained in paragraphs one (1) through thirty-five (3S) are incorporated herein by reference as if fully set forth herein. 37. It is denied that the Agreement of Points at Issue was a binding contract. It is also denied that the Agreement of Points at Issue survived the formation of Defendant Eagle Development Corporation and Defendant Cumberland Motor Inns, Inc. To the contrary, when the parties failed to purchase the Bemard Tract which was the land specified in the aforesaid Agreement, the agreement became null and void. 38. It is specifically denied that the Agreement of Principal Points at Issue continues to apply to the decision-making, management and operation of Defendant Eagle Development Corporation and Defendant Cumberland Motor Inns, Inc. To the contrary, the Agreement has never applied to the decision-making, management and operation of Defendant Corporations and does not now apply. As stated in paragraph 37, the Agreement is null and void. 39. It is specifically denied that the Individual Defendants have breached the Agreement of Principal Points at Issue in that it is impossible to breach a contract that is rendered null and void. Furthermore, the Individual Defendants have not excluded Plaintiff from the decision-making, management and operation of the two Defendant corporations, rather Plaintiff merely lost his seat on the Board of Directors. Count II - Minority Shareholder Oppression. Eagle Development Corporation 40. The answers contained in paragraphs one (1) through thirty-nine (39) above are incorporated herein by reference as if fully set forth herein. 41. Denied as to Eagle Development Corporation in that Eagle Development Corporation is a Corporation which is governed by a duly elected Board of Directors and duly adopted by-laws. As a Corporate entity, Eagle Development Corporation cannot engage in the activities alleged by Plaintiff. De:lied as to the Individual Defendants in that they have not improperly excluded him from decision-making, management and operation of Defendant Eagle Development Corporation. Count III . Minority Shareholder Oooression - Cumberland Motor Inns, Inc. 42. The answers contained in paragraphs one (1) through forty-one (41) above are incorporated herein by reference as if fully set forth herein. 43. Denied as to Cumberland Motor Inns, Inc. in that Cumberland Motor Inns, Inc. is a Corporation which is governed by a duly elected Board of Directors and duly adopted by- laws. As a Corporate entity, Cumberland Motor Inns, Inc. cannot engage in the activities alleged by Plaintiff. Denied as to the Individual Defendants in that they have not improperly excluded him from decision-making, management and operation of Defendant Cumberland Motor Inns, Inc.. Count IV - Minoritv Shareholder Oopression - Ea!,de Develooment Corporation 44. The answers contained in paragraphs one (1) through forty-three (43) above are incorporated herein by reference as if fully set forth herein. 45. It is denied that Eagle Development Corporation has refused and failed to distribute profits accuring from the operation of Eagle Development Corporation on a fair or equal basis among the shareholders, to the contrary, all shareholders have received the same distribution. As to the Individual Defendants, the averment is denied in that they, as individuals, are without the means or responsibility to distribute profits of the Corporation. Count V - Minoritv Shareholder aooression - Cumberland Motor Inn. Inc. 46. The answers contained in paragraphs one (1) through forty-five (45) above are incorporated herein by reference as if fully set forth herein. 47. It is denied that Cuml}erland Motor Inns, Inc. has refused and failed to distribute profits accuring from the operation of Cumberland Motor Inns, Inc. on a fair or equal basis among the shareholders, to the conlrary, all shareholders have received the same distribution. As to the Individual Defendants, the averment is denied in that they, as individuals. are without the means or responsibility to distribute profits of the Corporation. WHEREFORE. the Defendants request this Honorable Court to dismiss the Plaintiffs Complaint. Further, the Defendants respond to Plaintiffs prayers for relief as follows: a. Plaintiff is not entitled to be returned to the Board of Directors of Defendant Corporations because Plaintiff has not alleged a proper legal basis for such relief. For the reasons set forth hereinabove and in the New Matter inf'm.... the Agreement of Principal Points at Issue is null and void and in any case. unenforceable against the Corporate Defendants. b. Plaintiff is not entitled to any damages because none of the Defendants have engaged in any wrongful conduct. c. Plaintiff is not entitled to any further or additional equitable relief because Plaintiffs Complaint has failed to state a cause of action upon which relief can be granted. WHEREFORE, the Defendants request this Honorable Court to dismiss the Plaintiffs Complaint in its entirety with costs of suit. NEW MAnER As a funher and more specific answer, Defendants aver the following. 48. Paragraphs one (1) through forty-seven (47) are incorporated by reference ht1rein as though they were set forth in their entirety. 49. The writing designated as Exhibit "A" on Plaintiffs Complaint is a null and void because the land referred to therein was never purchased. 50. The writing designated as Exhibit" A" on Plaintifrs Complaint is undated. It cannot be assumed that the addendum clause which bears the date of June 12, 1980 is also the date of the document. The writing is question is unenforceable because it is vallue and amibiguous. 5 I. The writing designated as Exhibit" A" on Plaintifrs Complaint is void because no consideration was given to the Individual Defendants for the purchase of the land referred to the the writing. 52. The writing designated in Exhibit" A" on Plaintiffs Complaint is not reasonable in that it is overly broad in its scope, failing to sufficiently define the duties and responsibilites of the parties which renders it unenforceable.. 53. The writing designated in Exhibit "A" on Plaintifrs Complaint is unenforceable due to unconscionablitiy in that the terms of the Agreement were dictated solely by Plaintiff and presented to the Individual Defendants for signature at the instigation of Plaintiff without giving the Individual Defendants the opportunity to have the document reviewed by their attorneys, which gave Plaintiff unfair bargaining power over the Individual Defendants, Additionally. Defendants had no opportunity to modify said Agreement, nor to have the Agreement prepared in proper legal form with terms and conditions which were not vague, ambiguous and lacking in specificity. 54. Eagle Development Corporation and Cumberland Motor Inns, Inc. are not parties to the writing designated as Exhibit" A" on Plaintifrs Complaint and cannot be bound thereby. 55. No written agreement exists between the Corporations and Plaintiff which confers special privileges or rights to Plaintiff. S6. Plaintiff was given all requisite notices of meetings in connection with the Corporations and, contrary to Plaintifrs inferences, was invited to all meetings and given the same rights as every other shareholder. S7, Plaintiff is a shareholder of the Defendant Corporations and has the same rights as the other shareholders. S8. The Individual Defendants, sued as individuals and not as Directors, have no responsibility for the actions of the Corporate Defendants. 59, The Corporate Defendants lack the ability to make decisions on behalf of the Corporation, rather, Corporate actions are determined by the shareholders and Board of Directors. 60. The action brought by Plaintiff is essentially a shareholder derivative action in that Plaintiff is seeking to make changes in the management and operation of the Corporation for the good of the Corporation and ultimately, for his own benefit. Those changes being reformation of the by-laws to restore him to the Board of Directors as the fourth seat and, while not stated specifically, to declare dividends to the stockholders. As such, Plaintiff has failed 10 plead in accordance with Pa.R.Civ.P. 1S06 in that he has failed to state what efforts he has made at enforcement or the reason for not making such efforts. He has also failed to state that there is a strong prima facie case in favor of the claim asserted and that without the action serious injustice will result. WHEREFORE, the Defendanls request this Honorable Court to dismiss the Plainlifrs Complaint and to award to Defendanls counsel fees and costs for these proceedings. Respectfully submitted DUNCAN & 0170, P.C, by \.L~~~ Dated~~)) q9 ?- Supreme Court No. 22080 1 Irvine Row Carlisle, PA 17013 (717) 249-7780 VERI FICA TION I, William A. Duncan, Esquire, as the attorney of record for the Defendants, am authorized to and do verity that the facts contained in the foregoing Answer and New Matter to Plaintifrs Complaint, are true and correct to the best of my knowledge, information and belief. It is understood that false statements herein are made subject to the penalties of 18 Pa. C.S.A. Section 4904 relating to unsworn falsification to authorities. Da~&U ~}l Cfl '( \}'WJ).~J_J\AC~ William A. Duncan, Esquire CERTIFICATE OF SERVICE I hereby certify that on this date a copy of the foregoing Answer and New Matter was served on counsel in the manner indicated below: FIRST-CLASS MAIL POSTAGE PRE-PAID ADDRESSED AS FOLLOWS: Allen C. Warshaw, Esquire Duane, Morris & Hecksher 305 N. Front St., 5th Floor P.O. Box 1003 Harrisburg, PA 17108-1003 Attorney for Plaintiff by: \DtC~71\or~~~ William ~ Supreme Court No. 22080 1 Irvine Row Carlisle, PA 17013 (717) 249-7780 Date: Cf17 ~ a) ~ ('-: .. :!:; luQ - --, -:( U.,; {.H>~. ,:; CJ:i fi- -I '- > ~j.' ;"""'1._J (~.1 .... _~:r- ~ ;':.,~ . \... I". ft ~~, ::>- ('::f: \ ;I:.J F' Cl '"10.... .. ;;<: -; '1- r- :':i u CT\ U , . LAW OF'f'IC[5 or DUANE, MORRIS 11 HECKSCHER lip .305 NORTH fRONT STR[[l, POBOX 1003 . require no response, If, howcver, thcy are dcemed factual, thcy are denied. 53, Denied. It is denicd that thc tcrms of the Agrcemcnt were dictated solely by Plaintiff and presentcd to thc Individual Dcfendants for signuturc ut thc instigation of Plaintiff without giving the Individual Dcfendants thc opportunity to havc thc document rcvicwed by their attorneys, It is further dcnied that thc Dcfendants had no opportunity to modify said Agrecment nor to havc the Agrccmcnt prepared in proper Icgal form, It is admitted that the writing designatcd in Exhibit "A" did constitute an agreement. The remaining allegations contained in Paragraph 53 consist of legal conclusions which rcquire no response, If, however, they are deemed factual, they are denied, 54. It is admitted that Eagle Development Corporation and Cumberland Motor Inns, Inc, are not partics to thc writing designated as Exhibit "A," The remaining allegations contained in Paragraph 54 consist of Icgal conclusions which require no response, If, however, they are deemed factual, they are denicd, 55. Thc allegations containcd in Paragraph 55 consist of legal conclusions which require no response. If; however, they are deemcd factual, thcy are denied, 56, Denied, It is denicd that plaintiff was invited to all mectings in connection with Corporations and given the same rights as every other sharcho1der, Thc rcmaining allegations contained in Paragraph 56 consist of Icgal conclusions which require no response. If, however, they are deemed factual, they are dcnied, 57, Admitted, -2- 5S,. 60, The allegations contained in Paragraphs 5S through 60 consist of legal conclusions which require no response, If, however, they are deemed factual, they are denied, Respectfully submitted, DUANE, MORRIS & HECKSCHER LLP Dated: 11)'1/1/1 By: {lLL t~ ALLEN C, WARSHAW, ESQ, Attorney I.D, Number 17145 305 N, Front St., 5th floor P,O. Box 1003 Harrisburg, PA 1710S-1003 (717) 237-550S Attorneys for Plaintiff - 3 . VERIFICATION I, ANIL THAKRAR, hereby depose and state that I havc read the foregoing ANSWER AND NEW MA TIER which has becn draftcd by my counsel. The factual statements contained therein are true and correct to thc bcst of my information, knowledge and belief although the language is that of my counsel and, to the extent that thc content of the foregoing document is that of coun~el, I have relied upon counsel in making this Verification. This statement is made subject to the penalties of 18 Pa, C,S,A, ~4904 relatinfi to unsworn falsification to authorities, which provides that if I make knowingly false statements, I may be subject to criminal penalties, II f1Y/17 Date I . (~~ 1\, . CERTIFICATE OF SERVICE On this i!!!!....\ay of)blfllU.l, 1997, I, Sherry L. Weigel, a secretary in the law offices of Duane, Morris and Heckscher LLP, hereby certify that I have served this day true and correct copies of the foregoing ANSWER AND NEW MATTER in the above-captioned case, by depositing same in the United States First Class Mail, postage prepaid, in Harrisburg, Pennsylvania, to those persons and addresses indicated below: William A. Duncan, Esq. DUNCAN & OTTO, P.C. One Irvine Row Carlisle, PA 17013 I: , SHERIFF'S RETURN - REGULAR CASE NO. 1997-0~63~ P ~ COKKONWEALTH OF PENNSYLVANIA. COUNTY OF CUKBERLAND THAKRAR ANIL VS. HOOKE WILLIAK H JR ET AL , Sh.riff or D.puty Sh.riff of b.ing duly .worn .ccording EQUITY w.. ..rv.d DAVID E, KCKINNEY CUKBERLAND County, P.nn.ylv.ni., who to l.w, .ay., the within COKPLAINT - upon CUMBERLAND KOTOR INN INC d.f.ndant, at 1239100 HOURS, on the ~ day of Octob.r 192Z.t ~~ WEST CHURCH AVENUE CARLISLE, PA 17013 the , ,CUMBERLAND handing to ANDI MELOY. SECRETARY AND , County, P.nn.ylv.ni., by PERSON IN CHARGE . true .nd att..t.d copy of the COMPLAINT- .nd .t the .... ti.. dir.cting H1R .tt.ntion EQUITY to the cont.nt. th.r.of, Sh.riff'. Co.t.. Dock.ting S.rvic. Affid.vit Surcharg. So .n.w.rBI ff .,~a~/ ~ r ~.l::;;-r -:--"-.ri: H, Thom.. Kl1n., l>-::;r~;: - 6,00 ,00 ,00 2,00 .8.~~ uUANE MORRIS & HECKSCHLER 11/06/1997 by rJ.~/?""'~ //.kc"A-"~ "rii'truty 1Jb{m;fr=---7 Sworn and subscrib.d to b.for. .. this t" 1z~ day of {1' ...~.......t......... 19 en A.D, l ~ll'L.- C l>-td<", . (,i;, 7' I t'rotfionotJllry I SHERIFF'S RETURN - REGULAR CASE NOI 1997-0~63~ P CO""ONWEALTH OF PENNSYLVANIA I COUNTY OF CU"BERLAND THAKRAR ANIL VS, HOOKE WILLIA" H JR ET AL KENNETH E. GOSSERT CU"BERLAND County, Pennaylyani., who to law, aaya, the within CO"PLAINT - upon AUSTIN JEFFREY A defendant, at 181~100 HOURS, on the -iih day of Noye.ber 19~ at ~19 ADA"S ROAD CARLISLE, PA 17013 , Sheriff or Daputy Shariff of baing duly aworn according EQUITY waa aaryad tha .CU"BERLAND , County, Pann.ylyania, by handing to JEFFREY AUSTIN a trua and atteatad copy of the CO"PLAINT - EQUITY and at tha aallla ti.a diracting IU.I att.'ntion to tha contanta tharaof. . Shariff'. Coatal Dockating Saryic. Affidayit Surcharga 6.00 3. J 0 ,00 2.00 .Inll - /~. // So anneru I ~/kf.i!,;~~< 1~ H, Thomaa K~1na, ~har1%% DUANE "ORRIS & HECKSCHLER 11/06/1997 by I Sworn and aubacribad to bafora .. thia ~ t!Jt day of /'U~- 19 11 A,D, CJ~~ C. nu~ .u~ , t"rot.honot.ary ill' SHERIFF'S RETURN - REGULAR CASE NOI 1997-0~63~ P CO""ONWEALTH OF PENNSYLVANIA I COUNTY OF CUKBERLAND THAKRAR ANIL VS, HOOKE WILLIA" H JR ET AL DAVID E, MCKINNEY CU"BERLAND County, P.nn.ylvania, who to law, .ay., the within CO"PLAINT - upon EAGLE DEVELOPMENT CORPORATION defendant, at 1239100 HOURS, on the 19~ at ~~ WEST CHURCH AVENUE CARLISLE. PA 17013 , Sheriff or Deputy Sh.riff of being duly .worn according EQUITY wa. .erved the 28th d.y of October , .CU"BERLAND , County, Pennaylvania, by handing to ANDI "ELOY, SECRETARY AND PERSON IN CHARGE a true .nd atte.t.d copy of the COMPLAINT - EQUITY and at the .... ti.e directing ~ attention to the content. thereof, , Sheriff'. Co.t.. Dock.ting S.rvice Affidavit Surcharg. So an.w.r.. ~,../?/;' ;::f . i~- :7~;n":.,L..c. /- r<U. N, Thom.. Kllne, Sherl!! 6,00 ,00 ,00 2,00 .8,~~ DUANE "ORRIS 11/06/1997 by & HECKSCHLER p~~ ~l!11( ~ Sworn and .ub.cribad to bafor. .. th1. ~ 4f:: day of 71.L'-1iJU. ~ 19 If 1 A, D. \.'-~ ~I. I I ~~' (!~ . U'-- ~~.,. ro onotary ?f M ?:; M I. N :') ll':f'! (-)~- :t: O~ f -:',' c..1...~ ., c... ;'~1~ ,,~)~ ~ 'J' \g .' I 4~l" c...' Co" t:'J , L.. ~~a... ,- c I,.., '" d c> U'l " . . . , . LAW OHIC.(5 or DUANE. MORRIS fl IIECKSCIIER LLP . . D' .305 NORTH fRONT STRn.:T. PO SO-I( 1003 ANIL THAKRAR, PlaintiO', IN TIlE COURT OF COMMON PLEAS CUMBERLAND COUNTY,PENNSYLV ANIA v. No. 96.6233 Civil Term WILLIAM H. HOOK, JR,; CURT E. SUTER; and JEFFREY A. AUSTIN; Dcfcndant. ACTION IN LAW ANIL THAKRAR, PluintiO; : IN TIlE COURT OF COMMON PLEAS : CUMBERLAND COUNTY,PENNSYLV ANIA v. , , : / ACTION IN EQUITY V 97-5635 EQUITY TERM WILLIAM II. 1I00KE. JR., KURT E, SUTER; JEFFREY A. AUSTIN; EAGLE DEVELOPMENT CORPORATION; AND CUMBERLAND MOTOR INNS,INC, Dclcndants. NEEMA THAKRAR, Pluintiff, : IN TilE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PI!NNSYLVANIA v, : DOCKET NO, 99-2666 CIVIL WILLIAM H, HOOKE, JR,; KURT E, SUTER; JEFFREY A, AUSTIN; EAGLE DEVELOPMENT CORPORATION; AND CUMBERLAND MOTOR INNS, INC, Dcfcndunts. NEEMA THAKRAR, Pluintiff; : IN TIlE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, Pl!NNSYLVANIA : ACTION IN EQUITY v, WILLIAM II. HOOKE, JR,; : Dockct No, 1)I).2M7 EQUITY IlU01J16111 KURT E. SUTER; JEFFREY A. AUSTIN; EAGLE DEVELOPMENT CORPORATION; AND CUMBERLAND MOTOR INNS, INC, Defendants. ORDER AND NOW this ~~ay of. t"r._J>I<J , 1999 upon consideration ofPlaintill's' unopposed Motion to Consolidate, thc above-captioned matters shall be and are hereby consolidated. BY THE COURT: ,'1 ~~,.. '0, ~ J. cc: Mr, William A, Duncan, Esq, DUNCAN & OTTO, P,C, One Irvine Row Carlisle, P A 17013 Attomcys for Dcfcndants c...:~~ 1:l17/t(' , ...& ' 6: Allcn C, Warshaw, Esquire Duane, Morris & Hcckscher LLP 305 North Front Strect, 5th Floor P,O. Box 1003 Harrisburg, P A 17108-1003 Attomcys for Plaintiffs 1IIlO\J161U .1;..:tcL . (,6t..... ''l.:ik. f'J"'tN-..ct..'(J ql'[ ~Le. -" f' {". 3. 10 C........lot .(,. wt. C....... ~t d 1''1. . ANIL THAKRAR, Plaintiff, : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA v. : No. 96-6233 Civil Tenn WILLIAM H. HOOK, JR.; CURT E, SUTER; and JEFFREY A. AUSTIN; Defendant. : ACTION IN LAW MOTION TO CONSOLIDATE Pursuant to Rule 213 of the Pennsylvania Rules ofCivi! Procedure, Plaintiff, by his counsel, moves this Court to consolidate this action with three other actions pending before this Court: Anil Thakrar v. Hook. et ai, No. 97-5635, Neema Thakrar v. Hook et al. No. 1999-2666 and Neema Thakrar v. Hook et aI, No. 1999-2667. In support of this Motion, Plaintiff asserts the following: 1. Two of the lawsuits, Nos. 97-6233 and 1999-2666 are legal actions and two, Nos, 97-5635 and 1999-2667 are brought in equity, 2. Each of these lawsuits arises out of the same set off acts: a) Plaintiffs are minority shareholders in the two defendant corporations; b) The individual defendants are the majority shareholders; c) Plaintiffs claim that defendants have paid themselves dividends while refusing and failing to pay dividends to Plaintiffs. 3, In addition, Ani! Thakrar asserts a contract claim based on defendants failure to pay him dividends and failure to include him in the management of the corporations. IlBO\Jm4,\ 4. All of the cases involve common questions of fact and law involving the nature of the payments which the corporations have madc to defendants through their wholly owned corporation and the rights of minority shareholdcrs. 5, Trial ofthcsc matters together would promote judicial efficiency and avoid unnecessary cost and delay, 6. Counsel for ctefcndants has advised counsel for plaintiffs that he does not oppose this motion. WHEREFORE, plaintill'respectfully requests that this casc be consolidated with Ani! Thakrar v. Hook. et ai, No, 97-5635, Neema 11\akrar v. Hook et al,No, 1999-2666 and Neema Thakrar v. Hook et ai, No. 1999-2667, Respectfully submittcd, I ~2,fiq {)~/(?-- Allen C. Warshaw, Esquire Attorney Id No, 17145 Duane, Morris & Heckscher LLP 305 North Front Street, 5th Floor P,O, Box 1003 Harrisburg, P A 171 OS-I 003 (717)237-5500 Attorneys for Anil Thakrar HBO\lIl71 I 11IlO\l1l741 CERTIFICATE OF SERVICE tI On thishl" day of November, 1999, I, Sherry L. Weigel, a secretary in the law offices of Duane, Morris and Heckscher LLP, hereby certify that I have served this day a true and correct copy of the foregoing MOTION TO CONSOLIDATE in the above-captioned case, by depositing same in the United Slates mail, first-class, postage prepaid, in Harrisburg, Pennsylvania, to the person and address indicated below: William A. Duncan, Esq. DUNCAN & OTTO, P.C, One Irvine Row Carlisle, P A 17013 IIIlO\lU14. - " . ." .'~. ,I " '. . ~ ~'6~ P n-< '- ":.~ ~ .; "". ~ I 1..1 ! ~ - '; ~J (' \, - L-:l ,. .. C.... C'- : '-I l;I' .J, 1'-' t-' , <. ,,:, " r' u cr (~ ~ - ~ ^^ '-S~~ -..::::t-... " -y Iv, ~~~ IJ \1, ... . . Plaintiff. IN TilE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA ANIL THAKRAR, v. WILLIAM H, HOOKE, JR.; KURT E. SUTER; and JEFFREY A. AUSTIN; ACTION IN EQUITY tt Cf7- 6"6 d ~ f"r{fj Defendants. NOTICF; You have been sued in court, If you wish to dcfend against the claims set forth in the following pages, you must take action within twenty (20) days after this Complaint and Notice are served, by entering a written appearancc pcrsonally or by an attorney and filing in writing with the court your defenses or objections to the claims sct forth against you, You are warned that if you fail to do so the case may procced without you and a judgment may be entered against you by the court without further notice for any money claimed in the Complaint or for any other claim or relief requested by the Plaintiff. You may lose money or property or other rights important to you. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW TO FIND OUT WIIERE YOU CAN GET LEGAL HELP. NOTICIA Le han demandado a usted ell la cortc. Si listed quiere defenderse de estas demandas expuestas en 'as paginas siguientcs, usted tiene viente (20) dius de p1azo al partir de la fecha de la demanda y Ia notificacion. Usted de be prescntar una apariencia escrita 0 en persona 0 por abogado y archivar en la corte en forma cscrita sus dcrcnsas 0 sus objeciones a las demandas en contra de su persona. Seu avisado que si usted no s;: deliende, 1a corte tomara medidas y puede entrar una orden contra ustcd sin prcvio aviso 0 noli lieacioll y por cualquier queja 0 alivio que es pedido en la peticion de demanda. U sted puede pcrder dinero 0 sus porpiedades 0 otros derechos importantes para usted. LLEVE ESTA DEMANDA A UN ABODAGO IMMEDlATAMENTE. Sl NO TlENE ABOGADO 0 SI NO TIENE EL D1NERO SUFICIENTE DE PAGAR TAL SERVICIO, VA Y A EN PERSONA 0 LLAME POR TELEFONO A LA OFIC1NA CUY A D1RECCION SE ENCUENTRA ESCRITA ABAJO PARA AVERIGUAR DONDE SE PUEDE CONSEGUlR ASISTENCIA LEGAL. Court Administrator 4th Floor, Cumberland County Courlhous..: Carlisi..:, PA 17013 (717) 2-10,~ lclCO II. JurIsdictIon 7, This Court has jurisdiction over this matter because all of the parties reside and work In Cumberland County and because the cause of actions arose in Cumberland County, III. Factual Statement 8, On June 12, 1980, Plaintiff and Defendants Hooke, Suter and Austin (hereinafter the "Individual Parties") entered into an Agreement of Principal Points at Issue Between Hooke, Suter, Austin and Thakrar (hereinafter "the Agreement"). A true and correct copy of that Agreement is attached hereto and made a part hereof as Exhibit "A," 9, In the Agreement, the Individual Parties agreed that the points contained in the Agreement would constitute an agreement between them and that each of them intended to be legally bound by the Agreement. 10, In the Agreement, the Individual Parties stated their intent to form a corporation for the purpose of developing land located in Cumberland County and their agreement that each of the parties to the Agreement would receive a 25% interest in the venture by issuance of equal shares of stock. 11, The Agreement also provides that all future development of the land, "including indebtedness and profits, ownership and responsibilities shall be shared equally by all.the parties to this Agreement" and that "[i]n addition each party to this agreement shall be invited to all meetings and shall have a vote on all major decisions concerning development of the site," 12, Under the Agrecment, Plaintiff Thakrar agreed to and did contribute $125,000 in return for becoming an "equal, 25% partr.er/shareholder in the venture," It was further agreed that that would be the full and final monies he would be expected to contribute, - 2 - 13. Shortly alicr signing thc Agrccmcnt, on July 3, 1980, the Individual Parties formed a corporation callcd Eagle Devclopmcnt Corporation. 14, Pursuant to thc Agrecmcnt, each of the parties received 25% of the shares of Defendant Eagle Devclopmcnt Corporation and cuch of thc Individual Parties became a member of the Board of Directors of the Corporation. 15, Pursuant to the Agrccment, the partics, through Defendant Eagle Development Corporation, purchascd lund in Cumberland County (thc "Land") and developed part of that land, constructing and opcrating a Holiday Inn. The Holiday Inn began operation in 1983. 16, Later, on Dcccmber 12, 1985, also pursuant to the Agreement, the Individual Parties formed another corporation, called Cumbcrland Motor Inns, Inc. 17, While the Land which was actually developed was different than the land which the parties had originally intcnded to purchasc and develop, the parties understood and agreed that the Agreement would continue to govcrn their relationship, including the development of the Land and the decision-making, managcment and operation of Defendant Eagle Development Corporation and Defendant Cumberland Motor Inn, Inc. 18. Pursuant to the Agreement, each of the Individual Parties received 25% of the shares of Defendant Cumbcrland Motor Inn, Inc. and each of the Individual Parties became a member of the Board of Dircctors. 19. Pursuant to the Agrcement, the Individual Parties, through Defendant Cumberland Motor Inn, Inc. leased and dcvclopcd anothcr part of the Land, constructing and operating an Econo-Lodge Motel. The Econo-Lodge Motel bcgan operation in 1986. 20, Also locatcd on thc Land were sevcral arcas which, at various times between the - 3 - purchase of the property by Defcndant Eagle Development Corporation and the present, have been leased to other persons or entities for a variety of purposes, including the operation of a miniature golf course and the operation of a gas station. 21. During the period between thc formation of thc two corporations until late March of 1995, each of the Individuul Partics servcd on thc Board of Directors of both Defendant Eagle Development Corporation and Defendant Cumberland Motor Inn, Inc, and, as such, participated in all major decisions involving the dcvelopment of the Land, 22. During the period between the formation of thc two corporations until late March of 1995, each of the Individual Parties provided minimal assistance with the management of the Holiday Inn and the Econo-Lodge Inn located on the Land, but received no compensation for that work, 23. In most of the years between the formation of the two corporations until 1995, each of the Individual Parties received an equal and usually a significant distribution of income from each of the corporations. 24. On March 27, 1995, Defendants Hook:, Suter and Austin (hereinafter the "Individual Defendants") votcd, at meeting of thc shareholders, to amcnd the by-laws of each of the corporations to reduce the numb':r of directors from four to thrce and to remove Plaintiff from the Boards of Directors of Defendant Eaglc Dcvelopment Corporation and 'Defendant Cumberland Motor Inn, Inc. 25, As of March 27, 1995, thc Individual Dcfendants cxcluded Plaintiff from any participation in the decision-making, management and opcration of the two corporations, He has not participated in the dccision-making, managcment or operation of the two corporations - 4 - since that date. 26, On March 30, 1995, the defcndants formed a corporation by the name of Central Management Services, Inc, of which thcy arc thc solc sharcholders. 27, On April 2, 1995, Dcfendant Eagle Devclopmcnt Corporation and Defendant Cumberland Motor Inn, Inc, each cntcrcd into Management Agreements with Central Management Services, Inc, 28, Under thc Managcment Agreements cntercd into bctwcen Central Management Services, Inc, and Defendant Eaglc Devclopmcnt Corporation and Dcfendant Cumberland Motor Inn, Inc" Central Management Services, Inc. was to pcrform certain management functions for the two corporations. 29, Most of the management functions which Central Management Services, Inc, agreed to perform under the Managemcnt Agreements had previously been performed and continue to the present to be performed by employces of thc two corporations. The.remainder of those functions, those not performed by employces of the two corporations, require only minimal time and were previously performed by Plaintiff and the Individual Defendants without any compensation. 30, In 1995, Defendant Eaglc Development Corporation paid Central Management Services, Inc. approximately $ 139,000.00, an amount which is far greater than the value of the actual services provided to Defendant Eagle Dcvclopmcnt Corporation by Central Management Services, Inc, 31. In 1995, Dcfendant Cumbcrland Motor Inn, Inc, paid Central Managcment Services, Inc, approximatcly $51,000,00, an amollnt which is far grcater than the value of the - 5 - actual services provided Defendant Cumberland Motor Inn, Inc. by Central Management Services, Inc, 32, In 1996, Defendant Eaglc Devclopmcnt Corporation paid Central Management Services, Inc, a significant amount of money, an amount which is far greater than the value of the actual services providcd to Dcfcndant Eaglc Dcvclopment Corporation by Central Management Services, Inc. 33, In 1996, Defcndunt Cumberland Motor Inn, Inc. paid Central Management Services, Inc, a significant amount of money, an amount far greater than the value of the actual services provided Defendant Cumberland Motor Inn, Inc, by Central Management Services, Inc, 34, In 1995 and 1996, neithcr Defcndant Eagle Development Corporation nor Defendant Cumberland Motor Inn. Inc. paid any dividcnds or other distributions of income to Plaintiff. 35, The Individual Defcndants formed Ccntral Munagement Services, Inc. and caused Defendant Eagle Development Corporation and Defcndant Cumberland Inn, Inc, to enter into Management Agreements with Ccntral Managcment Scrviccs, Inc. in order to be able to make indirect distributions to thcmselves of thc profits of the two corporations without having to make such distributions to Plaintiff. IV. Causes of Action COUNT I .. Drcach of Contract 36, The allegations contained in paragraphs onc (I) through thirty-five (35) above are incorporated herein by rcfercnce as if fully sct forth hcrein. - 6- 37, Thc Agrccmcnt of Principal Points at Issuc I3ctwccn Hooke, Suter, Austin and Thakrar was a binding contract which survivcd thc formution of Defendant Eagle Development Corporation and Defcndant Cumberland Molor Inn, Inc. 38, The Agrccmcnt of Principul Points ut Issuc Between Hooke, Suter, Austin and Thakrar continues to apply to thc dccision-ll1uking, munagement and operation of Defcndant Eagle Development Corporation and Dcfendunt Cumbcrlund Motor Inn, Ine. 39, The Individual Dcfendants have brcuchcd thc Agreement of Principal Points at Issue Between Hooke, Suter, Austin and Thukrur in thut thcy have excluded Plaintiff from the decision-making, managcmcnt and operation of thc two Dcfendant corporations, WHEREFORE, Pluintiff rcspectfully rcqucslS thut this Court: (I) order Defendants to restorc I'luintiff to thc Boards of Directors of Defendant Eagle Development Corporution and Dcfcndant Cumbcrland Inn, Inc, and (2) grant such othcr rclief as thc Court dcems uppropriate, COUNT II - Minoritv Shareholder Opprcssion --Elllde Develonment CorporatIon 40, The allcgations contained in purugruphs onc (I) through thirty-five (35) above are incorporated herein by rcfcrencc us if fully sct forth hcrein. 41. The Individuul Dcfcndants and Dcfcndant Eagle Development Corporation have improperly opprcssed Pluintiff and deprivcd him of his rights as a minority shareholder of Eagle Development Corporation in that they havc cxcludcd Plaintiff from the decision-making, management and opcration of Dcfendant Euglc Dcvclopmcnt Corporation. WHEREFORE, Pluintiff rcspectfully rcqucsts that this Court: (I) order the Individual Defcndants und Dcfcndant Eagle Development Corporation - 7 - to restore Plaintiff to thc Uourd of Dircctor~ of Dd'cndunt Euglc Development Corporation and (2) grant such othcr rclicf us thc Court dccm~ llppropriate. COUNT III .. Mlnorltv Shareholder Olll'resslon .. Cumberland Motor Inn. Inc. 42, The allcgutions eontaincd in purngruphs onc (I) through thirty-five (35) above are Incorporated herein by rcfcrcnec us if fully sct forth hcrcin, 43, Thc Individual Dcfcndants und Dcl'cndant Cumbcrland Motor Inn, Inc, have improperly oppresscd Plaintiff and dcprivcd him of his rights as a minority shareholder of Cumberland Motor Inn, Inc. in that thcy huvc cxcluded Plaintiff from the decision.making, management and opcration of Dcfendant Cumbcrlund Motor Inn, Inc, WHEREFORE, Plaintiff rcspcctfully rcqucsts thut this Court: (I) order thc Individual Dcfcndants und Dcfcndant Cumberland Motor Inn, Inc, to restore Plaintiff to the Board of Dircctors of Dcfcndant Cumbcrland Motor Inn, Inc, and (2) grant such othcr rclief as thc Court dccms uppropriate, COUNT IV -- Mlnorilv Shareholder Ollllrcssion .- F.III!le DeveloDment Cornoratlon 44, Thc allcgations containcd in paragrnphs onc (I) through thirty-five (35) above are incorporated herein by rcfcrcncc us if fully sct forth hcrcin. 45, Dcfendants huvc impropcrly opprcsscd Plaintiff and dcprived him of his rights as a minority shareholder in that thcy havc rcfused und fuilcd to distribute profits accruing from the operation of Eagle Dcvelopmcnt Corporution on II fair or equal basis among the shareholders, WHEREFORE, Plaintiff rcspcctfully rcquests that this Court: (I) cnter judgmcnt in his favor und ugainst thc Individual Dcfcndants and Defendant .8-