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Home My WebLink About99-02667 NEEMA THAKRAR, Plaintiff : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA : NO. 1999-2667 v, WILLIAM H. HOOK, JR,; CURT E. SUTER; and JEFFREY A, AUSTIN; EAGLE DEVELOPMENT CORPORATION; and CUMBERLAND MOTOR INNS, INC, Defendants ACTION IN EQUITY PRELIMINARY OBJECfIONS OF DEFENDANTS TO PLAINTIFF'S COMPLAINT I. Motion !Q,.Shike Count lor Plaintirrs Comnlaint I. In Count I of the Complaint, Plaintiff alleges Minority Shareholder Oppression against Defendant Eagle Development Corporation, 2. Plaintiffs cause of action is a stockholder's derivative action under Pa.R.C,P. 1506(a), which defines such an action as an action to enforce a secondary right brought by one or more stockhoders or members of a corporation or similar entity because the corporation or entity refuses or fails to enforce rights which could be asserted by it 3. Plaintiff fails to set forth in her complaint the averments required by Pa, R,C.P, 1506, WHEREFORE, Defendants request this Honorable Court strike Count 1 of Plaintiffs Complaint for failure to state a cause of action, II. Motion ,to Strike DumLII of Plaintirrs Comnlaint 4, In Count 11 of the Complaint. Plair.tiff alleges Minority Shareholder Oppression preeluded from pursing a remedy at law, WHEREFORE, Defendants requrest this Honorable Court dismiss Plaintifrs Complaint. Respectfully submitted, ceo Dated: \~~ '2-"'\ 1 \ 1 1 ~r by \M~C~ Supreme Court No, 22080 I Irvine Row Carlisle, PA 17013 (717) 249-7780 :- . , , ...--. ,-. ( " , , .' I , C' , , ( ;') - '" u - 0 I ~ t- - ,.. . ~ " " o " 0 '" .......:lp:; .... +> " 0 " "' ..:: rtJ .5 ;., ~ ~l e '" <: I:: <:- <: ... <> (\lB ~Cl.. CJ ~o ... I::~ ..:: ::I ~ ~ ... " u ._, PRAECIPE FOR LISTING CASE FOR ARGUMENT (Must be typewritten and subnitted in duplicate) TO THE PROTHONOTARY OF CUMBERLAND COUNTY: Please list the within m3tter far the next Argurent Court. --=-----------------------..------------------------------------------------------------ CAPTION OF CASE (entire caption must be stated in full) NF..EMA 'lliAKRAR, ( Plaintiff) (j .') (-) C.:. <0 , I l,' , " f U) " : ~:~ :;, , " (/1 f';") ;':J .. ~..~ " : h ) : ') I' ~- '.\ , [j , :, .'.) _.J ('" ., '.~..: vs. WILLIAM H. HOOKE, JR.; KURT E. StJI'ER; ,JEFFREY A. AUSTIN; EAGLE DEVELOPMENT CORPORATION; AND CUMBERLAND MJ'I'OR INNS, INC. ( Deferrlant) , ACTION IN EQUITY No. -2.'L_ ,c;olv.il 2667 1999 1. State matter to be argued (Le., plaintiff's llDtion for new trial. deferxlant's dem.trrer to ccmplaint. etc.): PrAliminary ObjACtions to Conplaint 2. Identify counsel who will argue case: (a) for plaintiff: All'!n C. Warshaw, EsquirA 1\ddress: DuanA, Morris!> H~cksch'!r LLP 305 N. Front Strp.p.t, 5th Fl. Harrisburg, PA 17101 (b) for defendant: \~illiarn A. Duncan, E.,<;qUirA 1\ddress: Duncan & Otto, P.C. O:1A IrvinA Row Carlis11'!, PA 17013 3. I will notlly all parties in writing within boo days that this case has been listed for argurent. 4. Argunent Court fute: August 11, 1999 Dated: 6/17/99 ~//- Attorney far PlaJntJtf ~ r-.. '>- r..:: l.:-; r-~. ~~ l" . (\ .- :; f;: (~.~ ~'.:i (', 1 , 0 r:) (:" '; I" " , , i:I I "' I,U . , ~ 1 D.. i ," ~;') L~. (;''''1 ~; C) (7 , U L'&'W orrJ(lS or DUANE, MORRIS b HECKSCHER LLP , JO~""'ORTHrRONTs":'r~[(1,PO 00)(1003 H"'~RI5l1wrtG. PA"J71061003 , ',':'.,"'0:.. ":":""'. ,":,u,'.:'",>,.\,;: ,~':".:i',~,'~"~,~~'v'::"';'::""~"'''i'L:~.~~.,,- ';""'l;",~(,I;',:I,,:,'.~:."()~~',:,:,,:t",'.~ rl~.' \! .'j "~\' :'.... ".'.,'." " .:, /' " CERTIFICATE OF SERVICE On this /y~y of December, 1999, 1, Sherry 1. Weigel, a secretary in the law offices of Duane, Morris and Heckscher LLP, hereby certii)' that I have served this day a true and correct copy of the foregoing ANSWER & NEW MA TIER in the above-captioned ease, by depositing same in the United States mail, first-class, postage prepaid, in Harrisburg, Pennsylvania, to the person and address indicated below: William A. Dunean, Esq. DUNCAN & OTTO, P.C. One Irvine Row Carlisle, P A 17013 !~/~ >- .... g; l.~ L. , i \J Ci C': ( L. " .....~ .J (, '.:,') C' 0 ~. ( , , , f.e I , , '- ....: I . ) .....:"y. v,.r,,:.l.:' Ut DUANE, MORR1S 8 HECKSCHER LLP 305 NORTI.ol n~o"", S'wrCT p 0 eox 1003 .. , ,,(," ~ ,;", ' ~ ~ ';:~.."';, Y"..' ' ." <"'..;\ ,\ , ;," "~;I:.~ ,~:1~:i',:'":~;~,, '~L":':~.: :;..~ ;'~~::;:~.~.~" :,".,-,~; (~ '~.':-, , . :,~: :~' /', . :: ", ~:(!, '~""~ .' .~, ':1'.' ^ ci,.~. ,",' .. .~'/, ':~ c'"" , , ~ ANIL THAKRAR, Plaintiff, IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA v. No. 96-6233 Civil Term WILLIAM H, HOOK, JR.; CURT E, SUTER; and JEFFREY A, AUSTIN; Defendant. ACTION IN LAW ANIL THAKRAR, Plaintiff, IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA v. ACTION IN EQUITY 97-5635 EQUITY TERM WILLIAM H. HOOKE, JR., KURTE, SUTER; JEFFREY A. AUSTIN; EAGLE DEVELOPMENT CORPORATION; AND CUMBERLAND MOTOR INNS, INC. Defendants, NEEMA THAKRAR, Plaintiff, : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA v, : DOCKET NO. 99-2666 CIVIL WILLIAM H. HOOKE, JR.; KURT E, SUTER; JEFFREY A, AUSTIN; EAGLE DEVELOPMENT CORPORATION; AND CUMBERLAND MOTOR INNS, INC. Defendants. NEEMA THAKRAR, Plaintiff, v, : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA : ACTION IN EQUITY vi Docket No. 99-2667 EQUITY WILLIAM H, HOOKE, JR,; ItBG\386111 i '. ."'.' '~.,' ~:'" ';' ,I ,~;,,_~:'.1.<' ' ,~, ':';1':' " ,,',J ;"1;""~.~~i~~';'i);;,;\:~~~',~,f":,,:,~;~e~;;I::"i;.::':1,'..~,.~,'\ "<'~,'~~ ',:\::. \ ':':', " ',:~~,' ',':', \ :.: : ".'><. '.. ,,', . ::, <:' .. NEEMA THAKRAR, Plaintiff, : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYL V ANlA v. : DOCKET NO, 99-2666 CIVIL WILLIAM H. HOOKE, JR.; KURT E. SUTER; JEFFREY A, AUSTIN; EAGLE DEVELOPMENT CORPORATION; AND CUMBERLAND MOTOR INNS, INC, Defendants, MOTION TO CONSOLIDATE Pursuant to Rule 213 of the Pennsylvania Rules of Civil Procedure, Plaintiff, by his counsel, moves this Court to eonsolidate this action with three other actions pending before this Court: Ani! Thakrar v. Hook et aI, No. 96-6233, Anil Thakrar v, Hook. et ai, No. 97-5635 and Neema Thakrar v, Hook et aI, No. 1999-2667. In support of this Motion, Plaintiff asserts the following: J. 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 sanle set offaets: a) Plaintiffs are minority shareholders in the lwo defendant corporalions; b) The individual defendants are the majority shareholder:;; c) Plaintiffs claim that defendants have paid themselves dividends while refusing and failing to pay dividends to Plainliffs. 3. In addition, Ani! 111akrar asserts a contract claim based on defendants f.1ilure to pay him dividends and failure to include him in the management of the corporations, IIDG\3858Q. I ~ ('oJ [; <"", I:~ ~ tJ.Jr'; N ~jc1:: c..)....:. t_) :..: C-f" :c UJ"'", '..- Cl... ~.... ~rF> r'~ - '-I .';:;.c::!. I -, ::S fo (-.J,;,. L:../L, I _7- -' L' 1~'Z ~~i I ,....t.u L"..i ~g{J.. I'" 0 ~. I.L m ::-J 0 0'\ U '-.~.~..' ~rf::r. ~ cr " DlJ/'\NE. MORRIS ,'1I1ECKSCHER. LLP )O~ NOR1H n~ONT STf(([l, p,O BOx 1003 . ,Dt~ \f ~ 199rf/!J NEEMA THAKRAR, Plaintiff : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA v. : NO, 1999-2667 WILLIAM H, HOOKE, JR.; KURT E, SUTER; and JEFFREY A AUSTIN; EAGLE DEVELOPMENT CORPORATION; and CUMBERLAND MOTOR INNS, INC, Defendants ACTION IN EQUITY ANSWER I. Panies I. Admitted, 2, Admitted. 3. Admitted, 4, Admitted, 5, Admitted, 6, Admitted, II. krisdiction 7, Admitted, 1lI. Factual Statements 8, Denied, It is a legal conclusion that Exhibit "A" attached to the Complaint represents an enforceable agreemcnt bctween the partics, it is admitted however, that there exists 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 exists 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 eonclusion Ihat 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 Anil Thakrar did contribute $125,000,00 in connection with the writing described in Exhibit "A" attached to Plaintiffs 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 Plaintiffs Complaint was not the basis for the formation of a corporation and subsequent membership on the Board of Directors, 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 Plaintiff's 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 Plaintiff's 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" attached to Plaintiff's Complaint was not the basis for any actons taken with regard to distribution of shares of the corporation and membership on the Board of Directors, ] 9, Admitted, 20, Denied, Exhibit "A" attached to Plaintiff's 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 lea~e and develop land purchased by Eagle Development Corporation and constructed and currently operates an Econo-Lodge Motel. 21. Admited that the averments stated in paragraph 21 are correct to the extent that the development has occurred on land later purchased by Eagle Development Corporation, 22, Admitted, 23, Admitted that each of the "Contracting" Parties served on the Board of Directors of Defendant Corporations for the period in question Denied that they all participated in all major decisions involving the development of the L:md, to the contral)', "the Land" as rcfemed to by Plaintifl~ was never purchased and therefore never developed, AdditIOnally, while Anil Thakrar attended Board meetings, he did not participate in management decisions, requisite value to support the payment. 35, Admitted that payment occurred, Denied that the services provided lacked the requisite value to support the payment. 36, Admitted, 37, Denied, Payments were made in the ordinary course of business for valuable services provided, IV. Causes of Action COUNT I - Minority Shareholdel' Oppression -- Eagle Development COIporntion 38, The answers contained in paragraphs one (I) through thirt'j-seven (37) above are incorporated herein by reference as if fully set forlh herein, 39, 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. Denied as to the individual Defendants in that they have not improperly excluded Plaintiff from decision-making, management and operation of Eagle Development Corporation, COUNT" - Minolity Shan~holder Oppression - Cumbedand Motor Inn, Inc. 40, The answers contained in paragraphs one (I) through thirty-nine (39) above are incorporated herein by reference as if fully set forth herein, 41. It is 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 Plaintiff from decision-making, management and operation of Cumber/and Motor Inns, Inc, COUNT III - MinOlity Shal'eholdel' Oppression - Eagle Development COlpornlion 42, The answers contained in paragraphs one (I) through forty-one (41) above are incorporated herein by reference as if fully set forth herein, 43, It is denied that Eagle Development Corporation has refused and failed to distribute profits accruing 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 IV - Minority ShaJ'eholdel' Oppn~ssion - Cumberland Motor hill, Inc. 44. The answers contained in paragraphs one (I) through forty-four (44) above are incorporated herein by reference as if fully set forth herein, 45, It is denied that Cumbcrland Molor Inns, Inc, has refused and failed to distribute profits accruing from the operation of Cumberland Motor Inns, Inc, 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 avermcnt is denied in that they, as individuals, arc without the means or resonsibility to distribute profits of thc Corporation, WHEREFORE, the Defendants request this Honorable Court to dismiss the Plaintiffs Complaint, ~MAITER As a further and more specifie Answer, Defendants aver the following New Matter: 46, Paragraphs I through 4S are incorporated by reference herein as though they were set forth in their entirety. 47, The writing designated as Exhibit "A" on Plaintiff's Complaint is null and void because the land referred to therein was never purchased, 48, The writing designated as Exhibit "A" on Plaintiff's 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 in question is unenforceable because it is vague and ambiguous, 49, The writing designa!ed as Exhibit "A" on Plaintiff's Complaint is void because no consideration was given to the Individual Defendants for the purchase of the land referred to in the writing, 50, The writing designated as Exhibit "A" on Plaintiff's Complaint is not reasonable in that it is overly broad in scope, failing to sufficiently define the duties and responsIbilities of the parties, which renders it unenforceable, 51. The writing deSignated in Exhibit "A" on Plaintiff's Complaint in unenforceable due to unconscionability in that the terms of the Agreement were dictated solely by Anil Thakrar and presented to the Individual Defendants for signature at the instigation of Anil Thakrar without giving the Individual Defendants the opportunity to have the dowment '~, . CERTIFICATE OF SERVICE I hereby certify that on this date a copy of the foregoing Answer to Plaintifrs Complaint 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: DUNJOO~' P,C, \ ~ CeLiA William A, Duncan Supreme Court No. 22080 I Irvine Row Carlisle, PA ]7013 (717) 249-7780 Date: ~\~U..L~"'vlLll~ ~ ( 11 (; ( , r-:-: c> . - c.: i: - , " I' " ,"": , , ',' I ~ ~T: , , fl. , , , ." , I d L , : ,,' I, let.: , , " '. , ) 11 M o t- =.. ~ 3:: ~ ro 0'- =-:P':::J t: ~ aJ ;;.- CUtnC;;" = ~'E :g .'>1 E - C ....... 0 lU d.l = ..... C ~ ..';;:0" (J v; C ;.: ::l ... Q 8 u Q.; L _J . ;', .:"':'. ',~.l "',;,' .'/'i ",', ,~~.: '-:.', ....~\. .:.".;,;'i.,.~:..'t~!...";~ .':'i\~"~.'~~""';"'~'" :~~.r..,.\',I'" : ':, ,"", .:\:;.<. ~::-:',:'."':I: ::'; ~: ;';".' I;~,<'\.,' :.: '10:" ,\>.( strike the remaining two counts of the complaint on the grounds that they fail to contain the requisite elements of a stockholder's derivativc action and that a claim cognizable in cquity has not becn pled. Defendants' preliminary objections were argucd on August 11, 1999. For the reasons statcd in this opinion, the preliminary objections will be denied, STATEMENT OF FACTS Plaintiffs complaint allegcs, in pcrtinent part, that on June 12, 1980, Plaintiff's husband and the individual defendants entered into a written contract which governcd thcir development, through the corporate defendants, of two portions of a certain tract of land. The complaint avcrs that she and her husband were minority shareholders of the corporations, that thc individual defendants, who wcre also shareholders, improperly caused her husband to be removed from the corporate boards of directors, and that they proceeded 10 distribute corporate funds to a third corporation, fonncd and owned by thc individual defcndants, for inadcquate considcration. Counts I and 2 of Plaintiffs complaint seck reinstatement of Plaintiff's husband to thc rcspectivc boards of directors, and othcr relief appropriatc to the allegedly oppressivc behavior. Counts 3 and 4 seek a correction in Plaintiffs favor of the alleged financial irregularities. and olher relicI' appropriate to the allegedly oppressive behavior, 2 reprcsents, and the court accepts thc representation, that the action has bcen brought on her behalf and not on behalf of the corporations.s With respect to Defendants' contention as to counts 3 and 4 that claims cognizable in equity havc not bccn asscrtcd, Defcndants maintain that Plaintiff "secks monctary damagcs for a failurc to distribute profils,..6 cites the gcneral principle that in thc abscnce of a declaration of a dividend no obligation exists on the part of a corporation to distribute profits,7 and suggests that in thc absencc of fraud or an abuse of discrction cquily will not compel thc declaration of a dividend,8 However, a rcvicw of the complaint tends to support the argument of Plaintiff that "[P]laintiff is not complaining because profits were not distributed. Shc is complaining that profits were distributcd but that she was [unfairly] excluded from that distribution...9 TIic court is of the view that sufficient facts have been pled by Plaintiff as to Counts 3 and 4 10 survivc a challenge to cquitable jurisdiction at this stagc oflhe proceeding, Fur thc forcgoing reasons, the following order will bc entercd: S Plaintiff's Bricf in Opposition to Dcfcndants' Prcliminary Objections 10 Plaintiff's Complaint, at 6. 6 Defendants' Bricfin Support of Prcliminary Objcclions to Plaintiff's Complaint, at 8. 7Jd H lei. 9 PlaintilTs Bricf in Opposition to Dc!cndallls' Prcliminary Objections 10 Plaintitrs Complaint. al 7, 4 '~> .',:..", :,:,' ", ,,', ,:,~'~-"<'\~-'l:.~":,:,~,,~.~,:'<t~'~II~~'i/;"):~:";D,,,~,I:'::~:"::'~;~~~:\I"{'I~~~'"~':',,""_::,,,,,~:~",.:,....',"~._;: :t'.\'J,;I:""',,, ,', ,', t ' rr: -, n,~ ,r'.",...: ~rJ .,[~ -. .".....: ..... I "..: '.' "r'" ',. , '-, '\~-,',~y ('. ", 'I'" ," '..' ",' ,',: . ,~:" :~ .>;., I ' b;: ",:; ::,' :~.~~~,l' ,<~,,/ <:~'~., ~'~L:~'~':<\:~~ I'J.~,~:.:~ " ::, 1 :':;..' ..' ',.'. ,', ":". ':, ;',":,: ~~. " .:\', . " .: "'I ::' I'.' ,: I" " ~ " " ,".' "".,., 12. Under the Agreement, Anilllmkrar agreed to and did eontribute $125,000 in retum for bccoming an "equal, 25% partner/shareholder in the venlurc." It was further agrced lhat that would be thc full and final monies hc would be expected to contribute, 13. Shortly aftcr signing the Agreement, on July 3,1980, the Contracting Individuals formcd a corporation ealled Eagle Devclopment Corporation, 14, Pursuant to the Agrccment, each of the partics receivcd 25% of the shares of Defendant Eagle Devclopment Corporation and each of the Contracting Individuals bccame a mcmber of the Board of Directors of the Corporation, 15, Pursuant to the Agreemcnt, the Contraeting Individuals through Defendant Eagle Development Corporation, purchased land in Cumberland County (the "Land") and developed part of that land, constructing and operating a Holiday Inn. The Holiday Inn began operation in 1983. 16. Latcr, on December 12, 1985, also pursuant to the Agreement, the Contracting Individuals forme-d another eorporation, callcd Cumberland Motor Inns, Inc, 17. While the Land which was actually developed was different than the land which thc parties had originally intcnded to purchase and develop, the Contracting Individuals wldcrslood and agreed that the Agreement would continue to govcm their rclationship, ineluding the- developmenl of the Land and the decision-making, managcment and operation of Defendanl Eagle Devclopment Corporation and Defcndant Cumberland Motor Inn, Inc. 18. Pursuant to the Agrecmcnl, each of the Conlracting Individuals receivcd 25% of the sharcs of Defcndant Cumbcrland Motor Inn,lnc, and each ofthc Conlracting Individuals became a member of the Board of Dircctors. HOO\24)04, I - 3 - 19. Ani! Thakrar had the one hundred shares eonstituting his 25% of the shares in Cumberland Motor Inns, Inc, issued in the name of "Ani! Thakrar and Neema Thakrar, as tenants in eommon and not joint tenants." 20, Pursuant to the Agreement, the Contracting Individuals, through Defendant Cumberland Motor Inn, Inc, leased and developed another part of the Land, constructing and operating an Eeono-Lodge Motel. The Econo-Lodge Motel began operation in 1986. 21. Also located on the Land were several areas which, at various times between the purchase of the property by Defendant 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 eourse and the operation of a gas station. 22. On March 28, 1990, plaintiff Ani! Thakrar had his one share of stock of Eagle Development Corporation constituting his 25% interest in that corporation reissued in the name of Ani! C. Thakrar and Neema A. Thakrar - as tenants in common, 23. During the period between the formation of the two corporations until late March of 1995, each of the Contracting Individuals served on the Board of Directors of both Defendant Eagle Development Corporation and Defendant Cumberland Motor Iml, Inc. and, as such, participated in all major decisions involving the development oflhe Land, 24. During the period between the formation of the two corporations until late March of 1995, each of the Contracting Individuals provided minimal assistance with the management of the Holiday Inn and the Econo-Lodge Inn localed on the Land, but received no compensation for that work. IIHO'J43041 -4- _,;, :. '.~,' ,',,': . ,:,: ,r, ""'~;~: ./.' ! ':".': '::''''<.,: \~I: 'f~":I:J':\l;;\';;':':. ;::):1'.I.~i...,~~~.~~'~;f.~::}~! ,', ':111 <.:": ,<" '>:. ~ , ',,;, ", .', l . :.:: ,:"}" c, ''';' ... /'" \', ,I' , ..', ,1 I "1 , I I I i j 'i 1 ! 25. In most of the years between the formation of the two corporations until 1995, eaeh oflhe Individual Defendants, individually, and Plaintiff and her husband jointly received an equal and usually a signifieant distribution of ineome from each of the corporations. 26. On March 27, 1995, Defendants Hooke, Suter and Austin (hereinafter the "Individual Defendants") voted, at meeting of the shareholders, to amend the by-laws of eaeh of the corporations to reduee the number of directors from four to three and to remove Ani! Thakrar from the Boards of Directors of Defendant Eagle Development Corporation and Defendant Cumberland Motor Inn, Ine. 27. As of March 27, 1995, the Individual Defendants excluded Plaintiff and Anil Thakrar from any participation in the decision-making, management and operation of the two eorporations. They have not participated in the decision-making, management or operation of the two corporations sinee that date. 28, On March 3D, 1995, the Individual Defcndants formed a corporation by the name of Central Management Services, Inc, of which they are the sole shareholders. 29. On April 2, 1995, Defcndant Eagle Development Corporation and Defendant Cumberland Motor Inn, Inc, each entered inlo Management Agrecmcnts with Ccntral Managemcnt Services, Inc. 30, Under the Managcment Agreements entered into between Ccntral Management Services, Inc. and Defcndant Eagle Devclopment Corporation and Defendant Cumbcrland Motor Inn, Inc., Central Management Services, Inc. was to pcrform certain managcment functions for lhe two corporations. IIBG\~.o04 I .5. 31. MoSl of thc management funclions whieh Ccntral Management Services, Inc. agreed to perform under the Managcment Agreements had previously been performed and eontinue to the present to be performed by employees of the two corporations, The rcmainder of those functions, those not performed by employces of lhe two corporations, rcquire only minimal time and were previously performed by Ani! Thakrar and the Individual Defendants without any compensation. 32. In 1995, Defendant Eagle Development Corporation paid Central Managcment Serviees, Ine, approximately $139,000.00, an amount which is far greater than the value of the actual serviees provided to Defcndant Eagle Dcvelopment Corporation by Ccntral Management Services, Ine. 33. In 1995, Defcndant Cumberland Motor Inn,lnc, paid Central Management Services, Ine, approximately $51,000,00, an amount which is far grcater than the value of the actual services provided Defendant Cumberland Motor Inn, Inc, by Central Managemcnt Scrvices, Inc. 34. In 1996, Defendant Eagle Development Corporation paid Cenlral Management Services, Inc. a significant amount of money, an amount which is far greatcr than the value of the actual scrvices provided to Defendant Eagle Development Corporation by Cenlral Management Services, Inc, 35. In 1996, Defendant Cumberland Motor Inn, Inc. paid Central Management Scrvices, Inc. a significant amount of money, an amount far greatcr than tlle valuc of the actual services providcd Dcfcndant Cumberland Motor Inn, Inc, by Ccntral Management Scrvices, Inc, 36. In 1995 and 1996, neither Defendant Eagle Development Corporation nor Defendant Cumberland Motor Inn, Inc, paid any dividends or other dislributions of income to Plaintiff. HUG\'4)CM I - 6- 37, The Individual Defendants formed Central Management Services, Ine. and eaused Defendant Eagle Development Corporation and Defendant Cumberland Inn, Ine, to enter into Management Agreements with Central Management Services, Inc, in order to be able to make indireet distributions to themselves of the profits of the two Corporations without having to make sueh distributions to Plaintiff, COUNT I -- Minoritv Shareholder Onnression --Eal!le DevehlOment Cornoration 38. The allegations eontained in paragraphs one (1) through thirty-seven (37) above are incorporated herein by reference as if fully set forth herein. 39. The Individual Defendants and Defendant Eagle Development Corporation have improperly oppressed Plaintiff and her husband and deprived them of their rights as minority shareholders of Eagle Development Corporation in that they have excluded Plaintiff and her husband from the decision-making, management and operation of Defendant Eagle Development Corporation. WHEREFORE, Plaintiff respeetfully requests that this Court: (1) order the Individual Defendants and Defendant Eaglc Development Corporation to restore Ani! Thakrar to the Board of Directors of Defendant Eagle Development Corporation and (2) grant such other relief as the Court deems appropriate. COUNT n - Minoritv Shareholder Opnression -- CU!l1berland Motor Inn. Inc. 40. The allegations contained in paragraphs one (I) through thirty-nine (39) above are incorporated herein by reference as if fully set forth herein. 41. The Individual Defendanls and Defendant Cumberland Motor Inn, Inc, havc improperly oppressed Plaintiff and her husband and deprived them of their rights as minority HBG\2.cJ~.1 - 7 - shareholder of Cumberland Motor Inn, Ine, in that they have excluded Plaintiff from the deeision- making, management and operation of Defendant Cumberland Motor Inn, Inc. WHEREFORE, Plaintiff respectfully requests that this Court: (I) order the Individual Defendants and Defendant Cumberland Motor Inn, Inc. to restore Ani! Thakrar to the Board of Direetors of Defendant Cumberland Motor Inn, Inc. and (2) grant such other relief as the Court deems appropriate. COUNT III -- Minoritv Shareholder Oppression - Eae1e Development Corporation 42. The allegations contained in paragraphs one (1) through forty-one (41) above are incorporated herein by reference as if fully sel forth herein. 43, Defendants have improperly oppressed Plaintiff and deprived her of her rights as a minority shareholder in that they have refused and failed to distribute profits accruing from the operation of Eagle Development Corporat!on on a fair or equal basis among the shareholders. WHEREFORE, Plaintiff respectfully requests that this Court: (1) enter judgmcnt in her favor and against the Individual Defendants and Defendant Eagle Development Corporation in an a1110lUlt in excess of$50,OOO; and (2) grant such other relief as the Court deems appropriate. COUNT IV -- Minority Shareholder Oppression Cumberland Motor Inn. Inc. 44. The aIlegalions contained in paragraphs one (I) through forty-three (43) above are incorporated herein by reference as iffully set forth herein. 45. The Individual Defendants and Defendant Cumberland Motor Inn, Inc. have improperly oppressed Plaintitrand deprived her of her rights as a minority shareholder in that they HllG'J'J04.1 - 8 - , . ,-' , :. '.' ': . " _1 ,',.:: \ \,y ,<;: :':J.::' ,:..... ;,;;,;~;~'~;':.;:,:.~ :'.~ \'~,.:',~2. :~'..i:~~~~';;,,::~ ':":':'. I'~ ' '::, > ~,,:;-. ,",:: ,.:, ~', 'r:..' .L~'" '. ." I ' ",'..' '."" , . j ,'j. "j" ': ,. /;,: . \ ", , .. e I I I I j i I I I " .' 1. AGREEMENT OF PlUNCIPAL POllJTS AT ISSUE BETWEEN HOOKE, SUTER, AUSTllJ AND THAKRAR THE FOLLOWING principal points constitute an agreement between William H. Hooke, Jr., Kurt E. Suter, Jeffrey S. Austin and Anil C. Thakror. All parties to this agreement intend it to be legally binding upon them. THE PARTIES, hereto have formed Eagle Development Corpo~ation. The purpose of said corporation will be to deal and invest in Real Estate, and other such matters relating thereto; and in particular the acqUisit:l.on of 1$ acres of the industrial zoned Bucher and Cooke land loeated at south east intersection of U.S. Route 11, and Interstate 81 in Middlesex Township, Cumberland County, Penn~'lvania. The four members of said corporation, all parties to this acreement, intend to develop the 15 acre tract of land in stages over the next several years, with the first tract to eontain a Holiday Inn. EACH PARTY to this 116reement shall receive a 2;;% interest in the venture, by the issuance of equal shares of stock to each of the four corporate members. Kurt E. Suter, President, Anil C. Thakrar, Vice President, Jeffrey S. Austin, See'y and ~Iilliam H. Hooke, Jr., Treasurer. ALL r~TURE development concerning the 1$ acre tract of land, including indebtedness and profits, ownership and responsibilities shall be shared equally by all parties to this ll{;reement. In addition each party to this ll,'~reement shall be invited to all meetings and shall have a vote on all major decisions concerning development of the site. Major decisions shall constitute sUch decisions as sales of the property, what will be bu11 t on the property, amounts of indebtedness, ~nterest rates, and other general major policies having to do with the operation of the site and its various improvements. WHEREAS, Hooke, Suter ~~d Austin will by future contributions effectuate financing to be obtained for all projects on all subdivided tracts wi tllln the 15 acre tract, and manll{;e and oversee all construction details of all improve- ments to be placed on said land, AND WHEREAS, to facilitate an earlier acquisition of said 15 acre tract and to reduce their o\m capital outlay, Hooke, Suter, and Austin desire to include one add:!. tional, e,"ual partner/investor. '1'HEREFORE, Anil C. Thakror, having boen apprised by Hooke, Suter, and Austin of the transaction; nnd of the positive and negative sides, and subsequently having been invited to join the group of Hooke, Suter, 8..11.d Austin, in undertaking the above described venture, Wl C. Thakrar has sgreed to become 8.l1 equal, 25% partner/shareholder in the venture for the contribution of the sum of money of $125,000.00. '''-.. 2. NOW THEREFORE, 8.11 ;>nrties to this a.gr"p.J1Ien't mutually agree the $125,000.00 to be contributed b"J Anil e. Thakrsr wil,l bP. the full and f~nal monies he shal.1 be expected tc. cont,r:l,hutc toward the entire ;>roject encompassing the 15 acre proposed development, AND for this amount he shall be included as Ii. full and equal pnrtner/shsreholder with each of Hooke. Suter, and Austin for a.ll phatleB of the proposed project. D1ITIAL MONIF..s invest"'d b"J Anil e. Thllkrar toward the iJnple....ntatlon of construction of the proposed Holiday Inn on th" :lite :lhall be held in ""lcr<w \1'J em, pursunnt to llV'er,mcnts of sal e ex"cu~,'o" on ;{arch i 9f11 r,,.r the <lc"nisi tion of the 1) ncre trnct of lar,n n,escrl.b'lrJ. J.n plU";>J3raph 2, page 1. 111 T1JE EVENT, p',rcnase of the 1:; acre j ndu st!"'. a1 1;,:1c1; l",r"~n ,j"scr....\wd, 11,' dcn:icd th" p3J'."Jcs to ';hi c .1!~rc"mc,..,t, for l'r.aconn of cr,ndj~,ion:; ,"..r,LJ.I1"d ~11 ',!I" acrcemcnt of sal." excc'ltcd on ~~arc" i')fl1, not bein,;: anl.' ..,', !,., ~'"l:'~l;,..(I. ,'.,' :',,,. on:y ot.her rcason, all monle" j.Jaid b:r An'll C. 7hRkr,lJ" 'co :,h" ,:"1)\11' ,)1' iJ"r',J...." t." "his ,3.:'.re"ment as eccrow 'lc]\osJ.', monies shall r.e r'lt,llr:1':r. 'co ;,,,11 ':. ~l"Lc,I'"r :11 :'"", wi thin a period not 'co nxcr-Nl ',hirt.:r (lny:;. Al~ ,,',hAT' "'1,",1 ,'3 ",,<'lOt "I: '", '.li..t ',1.;'" "uch as le[;.1} ;md env1ne",.\ nf: ,,,"S shac.l no~, br, r"',,"'ned. AIJ. gOlar:S ndvnncnd 'rer AnJ 1 e. 7:~akrn,r 7," tM pnrtJne, 'J\ +,hi.: '<I:,.""m,mt, ~,,) effe"~,\1(lt;" the t.11 ),Ur,f~ of t,",e prr'l'""e,; \\01'; d ay Inn, nnrJ ;"r ',h" i:.'ll'''''': :td" <111""- !<lent e,f c,Lhcr l'T",j"cts V, he c"":ple".(,rJ on ,;"",1 t,r, s\"';' ',." 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