video conference i wish i could say i enjoy doing oral argument this way d but i'm afraid that's would be not true just to cover the formalities my name is craig on wrath i represent the defendants joseph in forty this case originates from a complaint filed by robert robert forty sr i asked the court to look at the caption of that complaint it stays that the complaint is being filed on behalf of robert for individually and as a shareholder of bellville concrete that is the only complaint filed in this case accordingly it stands to reason that any judgment entered in this case would in newer to robert forty but we know that that can't possibly be true the court appointed donald sampson as receiver to marshal the assets of the corporation for not for robert for these benefit but for the benefit of bellville concrete and all of its shareholders as we all know the read the receiver represents the corporation any judgment in favor of the corporation must as a matter of law derive from a complaint filed on behalf of the corporation but none was filed there is not a single pleading filed anywhere in this case on behalf of the corporation look at the cover of the  see anything there suggesting that bellville concrete is a party plaintiff how is it that judgment can be entered in favor of a corporation that was never made a party to the litigation well  excuse me i'm looking at the caption as you suggest and build a concrete contracting company has named the fandoms that's correct have you ever ready heard of a judgement being entered in favor of money judgment being of or didn't favor of the defendant it would seem to me that they would have to be named as a party plaintiff and they're not you know in my experience typically what happens in the shareholder action like th matter is is there any case that you know of wherry rd party can file a pleading that would generate summary judgment on behalf of any party you know  a do we have any rule once and this is not better a court so and as you know mr john raphi did a lot of this work is there any rule in illinois he allows for the appointment even of a special questions i have there was also a request for an injunction in this case when it was originally planned was that what's a little bit confusing to me is that had two kinds of lawsuits going on within the one and that is we had the accounting claim because the shareholder could not get the information and then we had a several counts i think relating to the property who's going to get the property and that kind of thing that's correct with the court order and issue talks about transferring the property is that an issue here on this appeal the property are we only talking about the summary judgment as to the accounting o yes so we don't have to worry about those other counts even though they're in the order that's my understanding yes ok we have here the receiver's argue that we have suffered no prejudice from the domination of the receivers leading as a motion for terminal where as opposed to a complaint that's not the p the receiver is fully pardon me is fully authorized to conduct an investigation into the corporation's assets and liabilities accordingly defendants cooperated with that investigation and delaware law is as i understand it and the as i understand it the delaware statute provides that the receiver's powers are limited by the trial court's order appointing the receiver reason i asked is it and maybe i misunderstood but the sections quoted was an illinois law section eight o five law that's my understanding that it would concede that yes so that when we talk about the powers of the receiver we're going to be selecting delaware law not illinois that's correct ok and you believe that the court appointed and donald sampson as the receiver one hundred delaware law that's correct it would be governed by govern can you waive the fact that the corporations never made a proper party played it secondly and i think this is even more important we engaged in the investigation we engaged in discovery procedure we pointed out that he must have a complaint filed the receiver stands in the she was of the corporation we understand that but the receiver is not is not the corporation the the receiver is authorized to perform whatever necessary acts are required to represent the corporation that doesn't we objected at that point the receiver could have and should have filed a complaint on behalf of the corporation but did not well the receiver argues that it's the substance of the filing not the name of the supported that conclusion with yet another conclusion stating it is not reasonable to conclude that two employees previously earning sixty eight thousand dollars a prisoner be significant enough value to the corporation to justify the bonuses that we submit that the issue of whether the bonuses were reasonable is a classic issue of material fact it cannot be decided as a matter of law is undisputed that bellville concrete earned between five dollars and six million dollars on that subject alone of which the little country or get thirty percent of the profit in other words what we're talking about here is a profit of two million dollars based solely on james and joseph ortiz work now the receiver had full access to the corp books if those numbers were incorrect if they were inflated in any way the receiver asked about it as well this case was filed is not counting case and even under john aware a law you know ordered to appoint a receiver there has to be some showing that the corporation is insolvent and what you're talking about is a corporation that's very healthy the problem was according to the complaint that he couldn't get any access to the books and records of the corporation a very simple accounting klein and i'm still having trouble wondering why we're in a procedural delaware appointment why don't we make single law here because substantive law is ok this that this was done because the receiver reported that the corporation was no longer a viable enterprise that the parties would never be able to  resolve their differences and the receiver was appointed to dissolve the corporation now that is something that actually pointed out in my reply brief is that in order to dissolve a corporation under delaware law you need a you need a board meeting and a vote this is not something that can be done by  unreasonable unable to resolve their differences and had reached a deadlock yes well how can there be a deadlock when there's multiple shares going on without a vote and mean people can say we can't get along but s that chronology all i can say is that there was a situation where james forney's wife did open to get another business and that's some business i would not go as far as say the business was taken away from bell bill concrete or i think the record indicated that all of the business of justice good morning panel my name is laura shrek and i represent john sampson the app probably in his capacity as receiver for balco concreted obviously i can hear that the panel has a number of questions about the procedural ok i'll try to make sure i'm facing the computer the underlying claim brought by bob forney in this case it named a little concrete as a defendant likely anomaly to find it the primary count in that case as it relates to the issues on appeal was appointment of a custodial judicial dissolution a determination of amounts improperly paid to the defendant salaries or other amount risk issues that are specific to the motions for turnover and the summary judgment presumably he was then shifted to a different role as financial auditor and examiner and then finally with consent of the parties appointed receiver now i'm going to ask you the same question because  you know i'm looking at the section you just cited under the business corporation act and it allows for the point of the custodian in allows for the court to dissolve the corporation judicial dissolution but how did we would apply to substantive business matters substantive issues in this case so you're sitting in a section and see the remedies set forth in subsection b shall not be exclusive about their legal and equitable revenues which the court may  and delaware recognize i put a bill receiver chips which is what i believe the court intended to order and mr stamps believed he was performing functions of in this particular matter i think you know i don't believe that the court was mixing delaware procedure with illinois procedure i do not i don't think at this point anyone had read anything under delaware law but what i was confused about actually thank you for that clarification so  equitable receiver is what we're talking about did you know of any case where an equitable receipt were actually filed a motion for which there was a judgement the close is case  think we do agree there were a court orders are significant in terms of turning the hours and scope of a receiver in this case it would clear the sort of the court stands in the shoes of the corporation the job is to do equity to benefit or peroration for the purpose of pursuing a motion for a turnover of these assets then entered order setting conferences on this issue and ultimately directed the parties including the receiver to file a motion for summary judgment on this issue the receiver complied with each of the then have claims that the new business was start started for the sole purpose of defrauding or taking money from the st corporation i could technically right i don't king's and just last she's looking i would note that we received appendix was forty five dollars major plus more were just the record on appeal personally i can say to you that i think that's just a waste of news but panix we have the record i mean we have an index that the court should provide to us so from my point of view well i have to print out these breeds i don't really last see fifty pages here's what the record you know i believe that the new corporation was up and running at the time the receiver was appointed or i'm not certain that that's something that was known to all of the parties or the court what was known to the court at the i guess at the time the receiver was appointed he had made a financial report to the court as opposing counsel noted essentially explaining that the business had dried up as well as the fact that these parties were deadlocked and were to proceed working together as a corporate legislation looked that the court should look to the substance of a pleading in determining its character there are cases that have affirmed the use of a pleading to nominated motion as a complaint and we cite in re marriage of fast for that proposition mentioned in particular but they were denied an opportunity to present in counsel answers no he answers simply that he believes that this process is procedurally improper but under eleanore law we look to the substance of the pleading and the substance of this pleading particularly identified their duties as officers you know if there's nothing in the orders is there maybe i missed that says the court is using the illinois law judicial dissolution substantive law of judicial dissolution i mean it seems like we're mixing apples and oranges here we go from a simple accounting to now the court using it equitable remedies not only to appoint a receiver and i use that word very loosely but now we're entering into a substantive just position of the corporation which is now in delaware corporation so we have a conflict of laws issue that's not discussed by anyone in this case i'm not sure that i follow on the conflict of was issue conflict of loss issue as we have a delaware corporations incorporated under delaware law being dissolved actually summary judgment under illinois law using substantive illinois law so at least there arises the potential issue for cited which was anderson fifty three dollars c is really a case where they say the course says they lacked jurisdiction to even decide the merits of determine over order so i'm not sure how a but yes delaware law would apply to dissolution the summary judgments that were there at issue here did not directly concern solution these are limited to turn over of the on authorized lease and is immense because those payments were made by the s in their capacities as humans and we have briefed this but our position is that those payments were ultra pure s because the articles of incorporation clearly delegate responsibility for bonus and profit sharing plans to the board because there was no board meeting held with at least not with formal notice as admitted by plane of james or any or i guess or appropriately litigated james and because james for he also testified as included in the summary judgment motion that he alone assets can now file a proceeding unless we do we incorporate delaware law and that if we're going to incorporate delaware law we have to have a finding  receiver by the court with consent of all parties so essentially this was an issue that was waived it was agreed to by the parties and signed off by the court and where how do we know that it was agreed to back the parties when appellant claims that there was during a hearing that the procedure was improper where how do you get to that everybody agreed or it was way when we have that statement on the record right well clearly it was way because the part this for ten plus years my well are you saying that waves it like in an arbitration agreement well you know i mean it isn't there's no agreement there's no articles or bylaws or anything but they've never raised the aisle or it cannot be raised the st time on appeal the idea that somehow the appointment of the receiver with improper was never an issue that anyone raised in the trial court it was dispute about the scope of his authority  raised by jim of the morning dispute has already filed this motion we believe it's clear from the court's ongoing orders that he had that authority and that he has that authority as a equitable receiver under both states  are issues of fact necessarily involved in determining that a matter is altered here as i disagree we're not genuinely disputed issues james horney admitted he didn't properly call meeting he admitted that he alone authorized these payments and that that cannot be valid similarly he admits that he authorized these payments to himself while his wife had a competing business and while he was basically having no rd party  oversight he's engaged in southie lying and he failed to establish that his effort to set these payments in any way was a fair transaction but it was there in negotiation because of the timing relative to the appointment as a custodian a receiver assess for us in our affidavits stating that the the company are to substantial profit based on their work and that's never been disputed we have deposition testimony that state sworn deposition testimony that states of the company earned thirty percent net profit on a five dollars to six million dollars contract that that they single handedly transformed out of a six hundred thousand dollar contract more to the point this keeps coming up a bit mr samson is an equitable receiver and yet we have a judgment here finding my client's breached a fiduciary duty that's not an equitable claim that's that's that's a legal claim and i'd like to put mr sampson on the stand in front of a jury and have him explaining why this small percentage of the of the net profit that they awarded themselves  is unreasonable and the best that can happen here and there's a reason for that there's been no jury demand and why because this is a claim for an accounting you can't get a  into the corporate assets and liabilities we answered their claims and we could see that that was appropriate the problem comes in when the receiver asks for judgment when he asks for an award of money damages a legal claim that arises within it was roughly forty dollars days later we filed our response to that motion for summary judgment and we said d you can't do this you need to file a complaint that's spent the couldn't you couldn't you have and i understand you came into the slate so you don't have the thought process but once you  new details of what was going on in the corporation why wouldn't the plaintiff have been able to file a breach of fiduciary duty action asking for a dissolution of the corporation under that business act we've procedurally or substantive law well what say you about her argument about equitable receivership in illinois i don't i don't find a single case stating under illinois or delaware law that a receiver is entitle to seek money damages in a complaint that has never been filed that they can file a motion for turn over with a legal complaint  any file d illegal complaint in the in the form of a motion for turnover there is no law that states the states that the everson case there was it occurred there but neither asking it under substantive law or is there a difference answer questions general jurisdiction i'm not sure