IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

HUMC HOLDCO, LLC, HUMC PROPCO, 

LLC, HUMC OPCO, LLC, HUDSON 

HOSPITAL HOLDCO, LLC, CH HUDSON 

HOLDCO, LLC, HUDSON HOSPITAL 

PROPCO, LLC, HUDSON HOSPITAL OPCO, 

LLC, and IJKG OPCO, LLC, 

Plaintiffs,

v.

MPT OF HOBOKEN TRS, LLC, MPT OF 

HOBOKEN HOSPITAL, LLC, MPT OF 

HOBOKEN REAL ESTATE, LLC, MPT OF 

BAYONNE, LLC, AVERY EISENREICH, 

WTFK BAYONNE PROPCO, LLC, SB 

HOBOKEN PROPCO, LLC, ALARIS 

HEALTH, LLC, and J.C. OPCO, LLC,

Defendants.

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C.A. No. 2019-0972-KSJM

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HUMC OPCO, LLC, 

Nominal Party,

and

J.C. OPCO, LLC, on behalf of itself and 

derivatively on behalf of Nominal Defendants 

HUDSON HOSPITAL OPCO, LLC d/b/a 

CHRIST HOSPITAL and CH HUDSON 

HOLDCO, LLC, MPT OF HOBOKEN TRS, 

LLC, and MPT OF HOBOKEN HOSPITAL, 

LLC,

Counterclaim-Plaintiffs,

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v.

HUDSON HOSPITAL HOLDCO, LLC, and 

HUMC HOLDCO, LLC,

Counterclaim-Defendants,

and

VIVEK GARIPALLI, JAMES LAWLER, 

JEFFREY MANDLER, SEQUOIA HEALTH 

MANAGEMENT, LLC, and CAREPOINT 

HEALTH MANAGEMENT ASSOCIATES,

Third-Party Defendants,

and

HUDSON HOSPITAL OPCO, LLC d/b/a 

CHRIST HOSPITAL and CH HUDSON 

HOLDCO, LLC,

Nominal Defendants.

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MEMORANDUM OPINION

Date Submitted: May 28, 2020

Date Decided: July 2, 2020

Susan M. Hannigan, Robert L. Burns, Ryan D. Konstanzer, Megan E. O’Connor, 

RICHARDS, LAYTON & FINGER, P.A. Wilmington, Delaware; Counsel for 

Plaintiffs HUMC Holdco, LLC, HUMC Propco, LLC, HUMC Opco, LLC, Hudson 

Hospital Holdco, LLC, CH Hudson Holdco, LLC, Hudson Hospital Propco, LLC, 

Hudson Hospital Opco, LLC, and IJKG Opco, LLC.

Michael P. Kelley, Andrew S. Dupre, McCARTER & ENGLISH, LLP, Wilmington, 

Delaware; Michael A. Ackal, III, D. Scott Funk, GRAY REED & MCGRAW LLP, 

Houston, Texas; Counsel for Defendants MPT of Hoboken TRS, LLC, MPT of 

Hoboken Hospital, LLC, MPT of Hoboken Real Estate, LLC, MPT of Bayonne, LLC.
Patricia L. Enerio, Jamie L. Brown, HEYMAN ENERIO GATTUSO & HIRZEL 

LLP, Wilmington, Delaware; Christopher J. Sullivan, Dominic J. Picca, LisaMarie 

Collins, MINTZ, LEVIN, COHN, FERRIS, GLOVSKY and POPEO, P.C., New 

York, New York; Counsel for Defendants Avery Eisenreich, WTFK Bayonne 

Propco, LLC, SB Hoboken Propco, LLC, Alaris Health, LLC, J.C. Opco, LLC.

McCORMICK, V.C.
The parties to this action are part of an intricate web of people and entities that 

own, operate, and lease real estate to three hospitals located in Hudson County, New 

Jersey. The defendants moved for judgment on the pleadings on four counts in the 

complaint. This decision resolves that motion as to a single count asserted by 

Hoboken HUMC against Hoboken MPT for breach of Hoboken Opco’s LLC 

Agreement.1 That count arises from an offer by Alaris Health (“Alaris”) to acquire 

Hoboken MPT’s membership interests in Hoboken Opco. An early version of the 

offer conditioned the sale of the membership interests on the sale of real estate 

owned by other defendants. After the real estate sales closed, Alaris issued a second 

version of the offer, which sought to acquire the membership interests only.

The offer from Alaris triggered Hoboken HUMC’s right of first refusal under 

Hoboken Opco’s LLC Agreement. The provision grants Hoboken HUMC the right 

to acquire the membership interests on “the same terms and conditions” stated in the 

Alaris offer. The parties dispute whether the scope of Hoboken HUMC’s firstrefusal right extends to the real estate sales. The parties also dispute what constitutes 

a qualifying offer and whether the initial first-refusal notice could be withdrawn after 

 1 “Hoboken Opco” is HUMC Opco, LLC, “Hoboken HUMC” is HUMC Holdco, LLC, and 

“Hoboken MPT” is MPT of Hoboken TRS, LLC. Before diving into the background, it 

bears noting that the caption of this case includes nearly twenty Delaware limited liability 

companies, the names of which seem like they were selected by a random acronym 

generator resulting in a swirling bowl of alphabet soup. To mitigate the dizzying effect, 

this decision adopts defined terms and, for the most part, leaves off the “LLC” at the end 

of each of the entity parties’ names.
2

Alaris revised its offer. This decision concludes that although the scope of the firstrefusal right is limited to the membership interest sale, questions of fact concerning 

the terms and conditions of that sale, and questions of fact and law concerning the 

operative qualifying offer, foreclosing judgment on the pleadings in favor of the 

Hoboken MPT. The defendants’ motion as to this issue is therefore denied.

This decision also addresses a secondary dispute concerning a provision of 

the LLC Agreement that restricts a member’s ability to transfer governance rights. 

Alaris’s offer included a term prohibiting Hoboken MPT from consenting to any 

amendments to the LLC Agreement without Alaris’s prior written consent. Hoboken 

HUMC claims that this term constitutes an effective transfer of governance rights in 

breach of the LLC Agreement. The defendants’ motion as to this issue is also denied 

because questions of fact and law foreclose judgment on the pleadings.

FACTUAL BACKGROUND

The background facts are drawn from the parties’ pleadings and the 

documents they incorporate by reference.

2

A. The Parties

Hoboken Hospital, Christ Hospital, and Bayonne Medical Center are acute 

care facilities located in Hudson County, New Jersey. Each hospital is owned and 

operated by a corresponding limited liability company, which this decision refers to

 2 OSI Sys., Inc. v. Instrumentarium Corp., 892 A.2d 1086, 1090 (Del. Ch. 2006).
3

respectively as Hoboken Opco, Christ Opco,3 and Bayonne Opco.4 Each hospital 

leasesreal estate from a corresponding limited liability company, which this decision 

refers to respectively as Hoboken Propco,5 Christ Propco,6 and Bayonne Propco.7

The plaintiffs own “founders’ interests” in the Opcos and Propcos. Of the 

long list of plaintiffs, only one is relevant to this decision: Hoboken HUMC, which

owns the founders’ interest in Hoboken Opco.

The equally long list of defendants can be grouped into two categories: the 

“MPT Defendants” and the “Eisenreich Defendants.”8 The only MPT Defendant

relevant to this decision is Hoboken MPT, which owns a membership interest in 

Hoboken Opco. The Eisenreich Defendants relevant to this decision are Avery 

Eisenreich and Alaris, an entity controlled by Eisenreich. Eisenreich indirectly owns 

an interest in Christ Opco and is a member of the Christ Propco board of managers.

 3 “Christ Opco” is Hudson Hospital Opco, LLC.

4 “Bayonne Opco” is IJKG Opco, LLC, an entity wholly owned by IJKG, LLC.

5 “Hoboken Propco” is MPT of Hoboken Real Estate, LLC.

6 “Christ Propco” is Hudson Hospital Propco, LLC.

7 “Bayonne Propco” is MPT of Bayonne, LLC.

8 The MPT Defendants are: MPT of Hoboken TRS, LLC, MPT of Hoboken Hospital, LLC, 

MPT of Hoboken Real Estate, LLC, and MPT of Bayonne, LLC. The Eisenreich 

Defendants are: Avery Eisenreich, WTFK Bayonne PropCo, LLC, SB Hoboken PropCo, 

LLC, Alaris Health, LLC, and J.C. OpCo LLC.
4

B. The Governing Provisions

Hoboken HUMC and Hoboken MPT are parties to Hoboken Opco’s LLC 

Agreement.9 Section 10 of that agreement is titled “Transfer of Interest.” Two parts 

of Section 10 are relevant to this decision. 

First, Section 10.5 grants each member a right of first refusal in the event that 

any other member seeks to transfer any of its interests in Hoboken Opco. A member 

receiving a qualifying “Offer” under Section 10.5 is obligated to notify Hoboken 

Opco’s General Manager, who must then notify the other members. Upon receiving 

the notice, the members have fifteen days to exercise the right to “purchase all (but 

not less than all) of the Membership Interests proposed to be sold upon the same 

terms and conditions stated in the Offer.”10

Second, Section 10.1 restricts the transfer of any governance or financial 

rights of a membership interest in Hoboken Opco to any third party, except as 

permitted under the agreement.

C. The Sales Process

Beginning in 2018, the hospitals experienced financial difficulties. The 

parties to this lawsuit explored strategic alternatives, including a potential sale of 

various entities and assets. In September 2019, RWJ Barnabas Health, Inc. 

 9 Am. Compl. Ex. A.

10 Id. § 10.5(a). 
5

(“Barnabas”) expressed interest in acquiring Hoboken Hospital and Christ Hospital

from Hoboken Opco and Christ Opco. Any transaction was contingent upon 

negotiating new leases with Hoboken Propco and Christ Propco.

After Barnabas expressed interest in a transaction, Eisenreich became 

involved in the negotiations. The plaintiffs allege that Eisenreich led them to believe 

that he intended to use his relationship with Barnabas executives to “develop a plan 

that would permit Christ Hospital and Hoboken Hospital to seamlessly close on a 

transaction with [Barnabas], allow Christ Hospital to meet its interim funding needs 

to get to a closing with [Barnabas], and provide Bayonne Medical Center with 

significant funds and rent concessions to be able to continue operations while 

[Bayonne] searched for a strategic partner.”11

The plaintiffs further allege that Eisenreich convinced the plaintiffs to turn 

over confidential information pertaining to the three hospitals. After receiving the 

information, Eisenreich began communicating separately with Barnabas about 

interest in a transaction and a new lease with Christ Propco. Eisenreich did not report 

the separate negotiations to the other members of the Christ Propco board of 

managers. The plaintiffs further allege that Eisenreich “directed representatives of 

[Barnabas] not to communicate with any other [Christ] Propco Manager or with any 

 11 C.A. No. 2019-0972-KSJM, Docket (“Dkt.”) 28, First Am. Verified Compl. (“Am. 

Compl.”) ¶ 108.
6

representative of [Christ] Propco concerning new terms for a lease at Christ 

Hospital.”12 Although the other board members reminded Eisenreich that they had

“not consented to anyone speaking with [Barnabas] about the . . . transactions,”

Eisenreich ignored them.13

D. The First EPA and First Notice

Eisenreich allegedly used the hospitals’ confidential information to engineer 

transactions between the MPT Defendants and Alaris. On October 15, 2019, the 

Eisenreich Defendants and the MPT Defendants executed a confidentiality 

agreement in connection with ongoing discussions of a potential transaction. 

Hoboken MPT ultimately determined to accept Alaris’s offer to purchase its 

membership interest in Hoboken Opco (the “Membership Interest” and the 

“Membership Interest Sale”). The Membership Interest Sale was cross-conditioned

on Alaris purchasing the Hoboken and Bayonne real estate from Hoboken Propco 

and Bayonne Propco (the “Real Estate” and the “Real Estate Sales”).

14 

The package deal was memorialized in an Equity Purchase Agreement dated

October 27, 2019 (the “First EPA”). The First EPA listed a purchase price of 

$8,275,000 for the Membership Interest Sale and purchase prices of $50 million and 

 12 Id. ¶ 215.

13 Id. ¶ 169.

14 Am. Compl. Ex. E §§ 1.1, 8.1(g); Am. Compl. ¶ 122.
7

$58 million for the Real Estate Sales. The First EPA also prevented Hoboken MPT 

from approving an amendment to the LLC Agreement “without the prior written 

consent of [Alaris].”15 

The defendants closed on the Real Estate Sales on November 5, 2019, before 

the defendants notified the plaintiffs of any offer to purchase the Membership 

Interest or the existence of the First EPA.

On November 8, 2019, Hoboken MPT sent the plaintiffs an email stating that 

they were required to speak with Eisenreich regarding any matters related to the 

Membership Interest. This was the first that the plaintiffs caught wind of any 

transaction between Hoboken MPT and Eisenreich. The plaintiffs responded by 

demanding that Eisenreich provide them with documents pertaining to his putative

interest in Hoboken Opco. Eisenreich refused.

To obtain more information concerning Eisenreich’s dealings, on 

November 19, 2019, a member of the Christ Propco board noticed a board meeting 

for 2:30 p.m. on November 22, 2019.16 The notice stated that the “nature of the 

business to be transacted at the [m]eeting” would include “the status and substance 

 15 Am. Compl. Ex. E § 5.7.

16 See Dkt. 80, Aff. of Christopher J. Sullivan, Esquire in Supp. of the Eisenreich Defs.’ 

Mot. for J. on the Pleadings Ex. C. The Court can consider this document for the purposes 

of this motion because the Amended Complaint incorporates it by reference. McMillan v. 

Intercargo Corp., 768 A.2d 492, 500 (Del. Ch. 2000) (explaining that the Court may 

consider “documents integral to or incorporated into the complaint by reference” on a Rule 

12(c) motion).
8

of all discussions or negotiations that any Manager of [Christ] Propco (or their 

affiliates or representatives) have had or are continuing to have with [Barnabas].”17 

The members of the Christ Propco board demanded to learn from Eisenreich the 

substance of his communications with Barnabas.

That same day, Eisenreich sought to delay the meeting. He explained that a 

Friday afternoon meeting conflicted with his religious observance of the Jewish 

Sabbath. He asked that the meeting be rescheduled for November 26, 2019.

The MPT Defendants used the delay to send notice of the First EPA to 

Hoboken HUMC (the “First Notice”). In a notice dated November 25, 2019, 

Hoboken MPT wrote:

In accordance with Section 10.5(a) of the LLC Agreement, 

[Hoboken] MPT hereby provides notice to [Hoboken 

HUMC] . . . that [Hoboken MPT] has received an Offer to 

purchase all of its Membership Interest on the terms and 

subject to the conditions set forth in the [First EPA]. 

[Hoboken MPT] requests that [Hoboken HUMC] either (i) 

exercise the [right of first refusal] to purchase all of 

[Hoboken MPT’s] Membership Interest on the same terms 

set forth in the [First EPA] in accordance with Section 10.5

. . . , or (ii) waive the [right of first refusal] by signing this 

letter as indicated below.18

Hoboken HUMC responded to the First Notice by asking Hoboken MPT for

“any offer, term sheet, expression of interest or similar document or communication 

 17 Id. at 1.

18 Am. Compl. Ex. D, at 1–2.
9

submitted by Alaris Health, Avery Eisenreich or any of their respective affiliates to 

purchase any equity interests in [Hoboken] Opco.”19 Hoboken MPT did not respond.

E. The Second EPA and Second Notice

The plaintiffs filed this litigation on December 4, 2019. With their initial 

filing, they moved for expedited proceedings and sought a temporary restraining 

order to preserve the status quo and enforce Hoboken HUMC’s first-refusal right.

The day after the plaintiffs commenced this litigation, Hoboken MPT

purported to withdraw the First Notice. In response, Hoboken HUMC again sought 

information concerning the “facts and circumstances relevant to the bona fide offer 

that Hoboken MPT received in connection with what ultimately became the [First]

EPA.”20

On December 11, 2019, Hoboken MPT and Alaris executed a second Equity 

Purchase Agreement (the “Second EPA”), reflecting a purchase price of $8,275,000

for the Membership Interest. The Second EPA did not condition the Membership 

Interest Sale on the Real Estate Sales, which had already closed.

That same day, Hoboken MPT sent notice of the Second EPA to Hoboken

HUMC (the “Second Notice”). Hoboken MPT wrote:

[Hoboken MPT] and Alaris have executed a letter 

agreement that withdraws and terminates all prior offers 

and agreements with respect to Alaris’ purchase of the 

 19 Am. Compl. ¶ 136.

20 Id. ¶ 160.
10

Membership Interest. . . . As such, the [Second EPA] is 

the only pending offer from Alaris to purchase the 

Membership Interest.21

Hoboken MPT further stated:

In accordance with Section 10.5(a) of the LLC Agreement, 

[Hoboken MPT] hereby provides notice to [Hoboken 

HUMC] . . . that [Hoboken MPT] has received an Offer to 

purchase all of its Membership Interest on the terms and 

subject to the conditions set forth in the [Second EPA]. 

[Hoboken MPT] requests that [Hoboken HUMC] either i) 

exercise the [right of first refusal] to purchase all of 

[Hoboken MPT’s] Membership Interest on the same terms 

set forth in the [Second EPA] in accordance with Section 

10.5 . . . , or (ii) waive the [right of first refusal] by signing 

this letter as indicated below.22

F. This Litigation

On December 13, 2019, the plaintiffs amended their complaint and sought

another temporary restraining order enjoining any sale under the Second EPA.

23 On 

December 23, 2019, the Court entered an order temporarily restraining Hoboken 

MPT and Alaris from consummating the Membership Interest Sale and tolling the 

fifteen-day period for Hoboken HUMC to respond to the Second Notice.24 The 

Court also granted the plaintiffs’ motion to expedite as to four claims:

 21 Am. Compl. Ex. G, at 1; see also Am. Compl. Ex. I (letter from Alaris to Hoboken MPT

confirming the “withdrawal and termination of the [First EPA] and any and all Prior 

Offers”).

22 Am. Compl. Ex. G, at 1–2.

23 Am. Compl.; Dkt. 30, Pls.’ Mot. for TRO; Dkt. 31, Br. in Supp. of Pls.’ Mot. for 

Expedited Proceedings & Mot. for TRO.

24 Dkt. 47, Order Resolving Pls.’ Mot. for a TRO.
11

• Count I for breach of Hoboken Opco’s LLC Agreement, 

asserted against Hoboken MPT;

• Count II for breach of Hoboken Propco’s LLC Agreement, 

asserted against MPT of Hoboken Hospital;

• Count IV for breach of Christ Propco’s LLC Agreement, 

asserted against Eisenreich;

• Count IX for tortious interference with Hoboken HUMC’s 

rights under Hoboken Opco’s LLC Agreement, asserted 

against Eisenreich, Alaris, SB Hoboken, and WTFK 

Bayonne.25

All defendants filed answers and moved for judgment on the pleadings.

26 The 

MPT Defendants moved for judgment on the pleadings as to Counts I and II.27 The 

Eisenreich Defendants moved for judgment on the pleadings as to Counts IV and 

IX.28 The Court held oral argument on May 28, 2020.29

 25 Dkt. 46, Order Granting Pls.’ Mot. for Expedited Proceedings.

26 Dkt. 81, Answer, Affirmative Defenses & Countercls. of Defs.’ MPT of Hoboken TRS, 

LLC, MPT of Hoboken Hospital, LLC, & MPT of Bayonne, LLC; Dkt. 77, The Eisenreich 

Defs.’ Answer & Verified Countercls. to Pls.’ First Am. Verified Compl.

27 Dkt. 88, MPT Defs.’ Mot. for J. on the Pleadings; Dkt. 89, MPT Defs.’ Opening Br. in 

Supp. of Their Mot. for J. on the Pleadings; Dkt. 181, Pls.’ Answering Br. in Opp’n to the 

MPT Defs.’ Mot for J. on the Pleadings with Respect to the Expedited Claims (“Pls.’ MPT 

Answering Br.”); Dkt. 189, Defs. MPT of Hoboken TRS, LLC, MPT of Hoboken Hospital, 

LLC, & MPT of Bayonne, LLC’s Reply to Pls.’ Answering Br. to Mot. for J. on the 

Pleadings (“MPT Defs.’ Reply Br.”).

28 Dkt. 78, The Eisenreich Defs.’ Mot. for J. on the Pleadings; Dkt. 79, The Eisenreich 

Defs.’ Br. in Supp. of Mot. for J. on the Pleadings; Dkt. 182, Answering Br. in Opp’n to 

the Eisenreich Defs.’ Mot for J. on the Pleadings with Respect to the Expedited Claims; 

Dkt. 190, Eisenreich Defs.’ Reply Br. in Further Supp. of Their Mot. for J. on the Pleadings 

with Respect to the Expedited Claims.

29 Dkt. 202, Video Conference of the Oral Arg. on the MPT Defs.’ Mot. for J. on the 

Pleadings & the Eisenreich Defs.’ Mot. for J. on the Pleadings.
12

While the defendants’ motion was pending, the parties pressed forward with 

expedited discovery. To deliver timely guidance, this decision focuses on Count I, 

which concernsthe first-refusal right and transfer restrictions under Hoboken Opco’s

LLC Agreement (the “LLC Agreement”). The remainder of the defendants’ motions

will be resolved separately.

LEGAL ANALYSIS

Under Court of Chancery Rule 12(c), a motion for judgment on the pleadings 

may be granted where “no material issue of fact exists and the movant is entitled to 

judgment as a matter of law.”30 In deciding a Rule 12(c) motion, the Court may 

consider the pleadings and the documents they incorporate by reference.31 The 

Court is required to view the facts pleaded and the inferences to be drawn from such 

facts in a light most favorable to the non-moving party.32 However, a “court need 

not blindly accept as true all allegations, nor must it draw all inferences from them 

in [the non-moving party’s] favor unless they are reasonable inferences.”33 

In Count I, Hoboken HUMC claims that Hoboken MPT breached the firstrefusal right and transfer restrictions in the LLC Agreement. “Under Delaware law, 

 30 Desert Equities, Inc. v. Morgan Stanley Leveraged Equity Fund, II, L.P., 624 A.2d 1199, 

1205 (Del. 1993). 

31 OSI Sys., 892 A.2d at 1090.

32 Id.

33 In re Lukens Inc. S’holders Litig., 757 A.2d 720, 727 (Del. Ch. 1999) (internal quotation 

omitted), aff’d sub nom. Walker v. Lukens, Inc., 757 A.2d 1278 (Del. 2000).
13

the elements of a breach of contract claim are: 1) a contractual obligation; 2) a breach 

of that obligation by the defendant; and 3) a resulting damage to the plaintiff.”34

A. The First-Refusal Right

The first-refusal right is found in Section 10.5 of the LLC Agreement. With 

bracketed numbers added to aid this analysis, Section 10.5 provides:

Notwithstanding the general restriction to Transfer set 

forth in Section 10.1(a) hereof . . . a Member desiring to 

Transfer [1] all or any portion of its Membership Interests 

(a “Selling Member”) to [2] a Person other than such 

Member’s Affiliate or another Member must first 

[3] obtain from such person a bona fide written offer to 

purchase the Membership Interests, stating that the terms 

and conditions upon which the purchase is to be made, and 

the consideration offered (the “Offer”).

The recipient of the Offer (the “Offeree”) must [4] notify 

the General Manager who will notify the other Members 

who will have the right to purchase all (but not less than 

all) of the Membership Interests proposed to be sold 

[5] upon the same terms and conditions stated in the 

Offer.35

The parties’ principal disputes center on the fourth and the third elements. 

Tailored to this case, the first question is whether the scope of a qualifying offer, as 

established by the phrase “the same terms and conditions,” encompasses the Real 

Estate Sales. The second question is whether a qualifying offer can be withdrawn

such that the Second EPA can replace the First EPA, or whether any letter of intent 

 34 H-M Wexford LLC v. Encorp, Inc., 832 A.2d 129, 140 (Del. Ch. 2003).

35 Am. Compl. Ex. A § 10.5(a). 
14

or term sheet issued prior to the First EPA is the qualifying offer. This decision 

refers to these issues respectively as the scope issue and the qualifying-offer issue.

1. The Scope Issue

The parties do not dispute that the deal memorialized in the First EPA

triggered the first-refusal right and that it was a package deal—that is, a sale of both 

the Membership Interest and the Real Estate.

36 The parties also do not dispute that 

the sales were cross-conditioned in the First EPA. The parties dispute the 

implications of the package deal on the scope of the first-refusal right.

Hoboken MPT seeks to limit the scope of the first-refusal right to the 

Membership Interest. It argues that Section 10.5 does not expressly encompass any 

properties other than the Membership Interest because on its face, Section 10.5 

addressesthe sale of “Membership Interests” only, and Section 10 as a whole is titled

and concerns “Transfer of Interest.”37

Hoboken HUMC maintains that its first-refusal right encompasses the entire 

package deal. It argues that it is entitled to acquire the Membership Interest on the 

“same terms and conditions” as the qualifying Offer, and thus it is entitled to 

purchase the Real Estate.

 36 For the sake of analysis, this section assumes that the First EPA is the operative 

qualifying offer, although it is reasonably conceivable that there was a prior qualifying 

offer that involved a similar package and involved similar cross-conditions, as discussed 

in the next section.

37 Am. Compl. Ex. A § 10 (emphasis added). 
15

Delaware courts apply the objective theory of contracts, giving “words their 

plain meaning unless it appears that the parties intended a special meaning.”38 “The 

critical issue for the Court to decide . . . is what the shared intentions of the 

contracting parties were when they entered the Agreement.”39 In determining the 

intention of the parties entering into an agreement, “courts must read the specific 

provisions of the contract in light of the entire contract.”40 “This principle of 

construction, known as the whole-text canon, stems from the theory that context is 

the primary determinant of meaning.”41

In USA Cable v. World Wrestling Federation Entertainment, Inc., this Court 

applied the whole-text canon to derive a rule for determining the scope of a first-

 38 Encore Energy P’rs, 72 A.3d at 104.

39 Alliant Techsystems, Inc. v. MidOcean Bushnell Hldgs., L.P., 2015 WL 1897659, at *1 

(Del. Ch. Apr. 27, 2015).

40 Chi. Bridge & Iron Co. v. Westinghouse Elec. Co., 166 A.3d 912, 913–14 (Del. 2017); 

see Viking Pump, 148 A.3d at 648 (describing that, under Delaware law, a court “will give 

priority to the parties’ intentions as reflected in the four corners of the agreement, 

construing the agreement as a whole and giving effect to all its provisions” (quoting 

Salamone, 106 A.3d at 368)); E.I. du Pont de Nemours & Co. v. Shell Oil Co., 498 A.2d 

1108, 1113 (Del. 1985) (“[T]he meaning which arises from a particular portion of an 

agreement cannot control the meaning of the entire agreement where such inference runs 

counter to the agreement’s overall scheme or plan . . . .”); id. at 1114 (noting that it is a 

“cardinal rule of contract construction that, where possible, a court should give effect to all 

contract provisions”); see also Borealis Power Hldgs., Inc. v. Hunt Strategic Util. Inv., 

L.L.C., — A.3d — , 2020 WL 2630929, at *5–6 & n.22 (Del. May 22, 2020) (analyzing a 

right of first refusal using the plain language approach to contract interpretation and 

confining its analysis to the four corners of the relevant contract).

41 See Ray Beyond Corp. v. Trimaran Fund Mgmt., L.L.C., 2019 WL 366614, at *5 (Del. 

Ch. Jan. 29, 2019) (internal quotations omitted). 
16

refusal right.42 There, the plaintiff contracted with defendant World Wrestling 

Federation Entertainment, Inc. to televise four of the defendant’s narrative wrestling 

series (the “Series”).

43 The parties’ agreement contained a first-refusal right that 

gave the plaintiff the right to match terms offered by a third party.

44 The defendant

received an offer from a third-party, which included televising the original Series

and much more, such as additional specials, a new drama series, XFL football

coverage, a multi-million dollar advertising campaign, radio syndication, pay-perview events, print publishing, and theme park events.45 The defendant notified the 

plaintiff of this new offer pursuant to the plaintiff’s first-refusal right,

46 and the 

plaintiff purported to match the offer by striking certain elements and accepting

others.

47 The defendant rejected the plaintiff’s proposal, and the plaintiff sued to 

enforce the first-refusal right.

48

In a reverse of the plaintiffs’ position here, the plaintiff in USA Cable argued 

for a narrow interpretation of the first-refusal provision, insisting that its scope only 

extended to the subject matter of the existing contract and that the plaintiff thus 

 42 2000 WL 875682 (Del. Ch. June 27, 2020), aff’d, 766 A.2d 462 (Del. 2000).

43 Id. at *1–2.

44 Id. at *2

45 Id. at *6.

46 Id. at *7.

47 Id.

48 Id.
17

needed only match provisions that were “with respect to the Series.”49 The 

defendant argued for a broad interpretation, insisting that the plaintiff was obligated 

to match every provision of the qualifying offer.

50

In a post-trial decision, the Court adopted the plaintiff’s interpretation, 

although it ultimately entered judgment in favor of the defendant. Reading the 

agreement as a whole, the Court observed that 

it is unreasonable to conclude that a right of first refusal 

clause in a contract . . . would require the holder of the 

right of first refusal to match a package offer from a thirdparty for various properties that vastly exceed the scope of 

the property under the contract giving rise to the first 

refusal right. Nothing in the record suggests that a 

contrary scenario was reasonably in the minds of the 

parties at the time of drafting.51

The Court concluded that “[t]he scope of the right is limited to the subject matter of 

the Agreement in which the right exists.”52 The Delaware Supreme Court later 

 49 Id. at *8.

50 Id.

51 Id. at *9.

52 Id. To be fair, the Court reached its holding regarding the scope of the first-refusal right 

after conducting multiple analyses that could each be viewed as sufficient. The Court first 

analyzed the plain language of the first-refusal provision, focusing on a phrase that limited 

the first-refusal right to arrangements “with respect to any or all of the Series.” Id. at *8–

10. Based in part on the “with respect to” phrase, the Court held that “[t]he holder of the 

right of first refusal must match all terms contained in a third party offer directly related to 

the Series itself.” Id. at *9 (emphasis added). These included “licensing fees for the Series, 

advertising splits for the Series,” and the like; they did not include “the XFL, theme park 

events, and motion pictures, for example.” Id. The Court further examined parol evidence 

introduced at trial when construing the scope of the first-refusal right. Id. at *12. Without 
18

affirmed the trial court’s decision.53

This decision adopts the well-reasoned rule of USA Cable, which is that the 

scope of a first-refusal right shall be construed as limited to the subject matter of the 

agreement containing the right, unless the parties expressly agree otherwise.54

Under the rule of USA Cable, the MPT Defendants’ restrictive interpretation 

is the only reasonable one. At base, it is unreasonable to conclude that the parties to 

the LLC Agreement intended Section 10.5 to extend to any unburdened property 

included in a package deal, such as the Real Estate. This conclusion stems from the 

nature and content of the agreement in question. Under the Delaware LLC Act, a

limited liability company agreement is “any agreement . . . written, oral, or implied, 

of the member or members as to the affairs of a limited liability company and the 

 

diminishing the significance of these additional analyses, I find the application of the 

whole-text canon independently persuasive and generally applicable.

53 See 766 A.2d at 465–68. 

54 The parties’ dispute over the implications of a package deal on the scope of a first-refusal 

right is not new; this issue has vexed many courts before this one. See generally Bernard 

Daskal, Note, Rights of First Refusal and the Package Deal, 22 Fordham Urb. L.J. 461 

(1995) [hereinafter Package Deal] (describing the problems posed by the package deal in 

the first-refusal right context and collecting cases and secondary sources on this issue). 

Although at least one court has concluded that the right holder “is entitled to specific 

performance on the entire package,” that outcome has been criticized. Id. at 490; see also 

USA Cable, 766 A.2d at 468. The author of Package Deal reports that the majority of 

courts considering this issue have awarded “the right holder specific performance on the 

burdened property alone.” Package Deal at 469–70. Thus, USA Cable falls in line with 

what seems to be the majority rule. I qualify this statement with the phrase “what seems 

to be,” because my conclusion stems from a note published in 1995 found through 

independent research. The parties are free to brief this issue in future submissions if they 

believe that the exercise would be worthwhile.
19

conduct of its business.”55 It “provides the basic organizational structure for a 

Delaware limited liability company”56 and governs the “entity’s internal affairs,” 

including the relationship among the LLC and its members.57 It would be

unreasonable for members to include within an LLC Agreement a first-refusal right 

extending to property neither owned by the LLC nor any of its members, as the 

plaintiffs’ theory would require. The plaintiffs cite to no case that reached this 

conclusion.

To be sure, the plaintiffs attempt to characterize the Real Estate as within the 

subject matter of the LLC Agreement. The plaintiffs observe that the LLC 

Agreement contemplates that Hoboken Opco could hold real property related to 

Hoboken Hospital58 and that the “lease” of the real estate is mentioned several times 

in the LLC Agreement.

59 But whether Hoboken Opco could one day own real estate 

does not render the Real Estate within the subject matter of the agreement. And the 

reference to a “lease” reflects a legal relationship between Hoboken Opco and a 

 55 6 Del. C. § 18-101(9) (emphasis added).

56 Robert L. Symonds Jr. & Matthew J. O’Toole, Symonds & O’Toole on Delaware Limited 

Liability Companies, § 4.01[C] at 4-11 (2d ed. 2017).

57 Id.

58 Pls.’ MPT Answering Br. at 31.

59 Id. at 32 (citing Am. Compl. Ex. A ¶ 1 at 7).
20

third-party regarding the Real Estate, a relationship that is the subject matter of a 

separate agreement, i.e., the referenced “lease.”

Although this decision adopts a narrow interpretation of the scope of the firstrefusal right, the package deal nevertheless cuts against Hoboken MPT in ways 

sufficient to foreclose judgment on the pleadings. The main problem is that the 

nature of the package deal prevents the Court from isolating the “terms and 

conditions” in the First EPA that are specific to the Membership Interest Sale. It is

reasonably conceivable that the Real Estate Sales affected the terms and conditions 

of the Membership Interest Sale. The First EPA presents them as part of a package 

deal, and they were negotiated as such. By packaging them as a single deal, the 

defendants obscured the Court’s ability to determine which terms and conditions

need to be matched.

It is reasonably conceivable that Alaris tied its valuation of the Membership 

Interest to the value of owning both the Membership Interest and the Real Estate. It 

is also reasonably conceivable that the parties allocated the total price for all of the 

assets not based on the underlying value of each asset, but based on considerations 

that were affected by the nature of the package deal. For example, in order to 

optimize tax or other benefits, it is reasonably conceivable that Alaris allocated a 

portion of the purchase price to the Membership Interest that exceeded the 

underlying value of the Membership Interest. In effect, Alaris could maximize the 
21

value of the total package irrespective of the value of its contents by overpaying for 

one asset and underpaying for the others. Thus, whether the $8,275,000 purchase 

price reflects the true value of the Membership Interest by itself is a disputed issue 

of fact that is not properly resolved on a motion for judgment on the pleadings.

2. The Qualifying-Offer Issue

The MPT Defendants seek to avoid the complications arising from the 

package deal by arguing that the operative offer is the Second EPA, which included

only the Membership Interest Sale and not the Real Estate Sale. They say that the 

First EPA was abandoned and the First Notice was withdrawn. The plaintiffs 

respond that the First Notice created an option contract that could not be withdrawn 

during the fifteen-day period set forth in Section 10.5. They alternatively argue that 

neither the First EPA nor the Second EPA is a qualifying offer because neither are 

offers; rather, both are fully executed agreements. They say that it is reasonably 

conceivable that some qualifying offer predated the First EPA and that Hoboken

MPT breached its first-refusal obligations by failing to timely notice that qualifying 

offer pursuant to Section 10.5. 
22

As a matter of black-letter law, an offeror may withdraw its offer before 

acceptance.

60 Option contracts are an exception to the general rule.61 Courts 

disagree as to whether a first-refusal right, once triggered by a qualifying offer, gives 

rise to a revocable offer or creates an irrevocable option for the duration of the 

exercise period.

62 According to the MPT Defendants, Delaware law has not resolved 

this issue. They urge the Court to follow LIN Broadcasting Corp v. Metromedia, 

Inc.,

63 in which a New York court concluded that first-refusal provisions permit 

revocable offers and should not be construed as option contracts. 

In LIN Broadcasting, the potential seller revoked an offer made pursuant to a 

first-refusal provision after the third-party buyer revoked the qualifying offer.64 The 

 60 Montray Realty Co. v. Arthurs, 105 A. 183, 186 (Del. 1918) (“It is fundamental law that 

an offer may be revoked at any time before acceptance.”); Restatement (Second) of 

Contracts § 36(1)(c) (Am. Law Inst. 1981) (explaining that an offeree’s power of 

acceptance may be terminated by “revocation by the offeror”); id. § 42 (“An offeree’s 

power of acceptance is terminated when the offeree receives from the offeror a 

manifestation of an intention not to enter into the proposed contract.”).

61 Walsh v. White House Post Prods., LLC, 2020 WL 1492543, at *5 (Del. Ch. Mar. 25, 

2020) (collecting authorities on common law rule and describing option contract 

exception); 1 Williston on Contracts § 5.16 (4th ed. 2020) (“Williston”) (“Although an 

option contract is by definition binding as a contract, it is also an offer, and like other offers, 

its terms must be accepted in order to make the main contract binding.”).

62 1 Farnsworth on Contracts § 3.29, at 3-209 (4th ed. Supp. 2019) (“Farnsworth”) 

(“Courts have disagreed as to whether a right of first refusal, once triggered by a third 

party’s offer, gives a power to make a contract that survives even if the transaction with 

the third party is abandoned.” (citing LIN Broadcasting and noting inconsistency among 

state courts)).

63 542 N.E.2d 629 (N.Y. 1989).

64 Id. at 632. The seller and third-party offeror had reached a final agreement in LIN 

Broadcasting, and the parties did not dispute that this final agreement triggered the first-
23

holder of the first-refusal right nevertheless purported to exercise its right and sought

specific performance.65 The right holder argued “that a first refusal offer, once 

made, is irrevocable for the period specified in the first refusal clause.”66 In rejecting 

that argument, the court reasoned that the purpose of a first-refusal right is not served 

by treating the right as an option contract:

The obvious effect of the right of first refusal is to give to 

the nonselling party a power to control and restrict the 

other party’s right to sell to a third party. The clause itself 

operates as a restriction by preventing a party from making 

a sale without first making the first refusal offer. When, 

as here, the selling party has fully complied with its 

obligations under the first refusal clause by not selling 

without first making the required offer, the nonselling 

party has received the bargained-for performance. The 

intended effect of the clause as a means of restricting or 

preventing a sale to a third party has been realized. There 

is no basis for requiring the selling party to render more 

than its promised performance, as LIN would have us do, 

by keeping the offer open for the period specified in the 

first refusal clause, thus giving the first refusal offer all of 

the attributes of an option.

67

Put differently, the purpose of a first-refusal provision is to prohibit the transfer of 

property absent compliance with the provision. The purpose is not to force the owner 

to sell. 

 

refusal right. Id. They did not litigate whether the plaintiff right holder was entitled to 

notice of a more preliminary qualifying offer. Id.

65 Id.

66 Id. at 633.

67 Id.
24

At this stage, the parties have not sufficiently briefed the merits of following

LIN Broadcasting. The MPT Defendants first cited LIN Broadcasting in their reply 

brief, so the plaintiffs did not have a chance to respond in briefing.

68 Further, 

Farnsworth teaches that state laws are not in accord on this issue.69 

Even assuming that this Court were to follow LIN Broadcasting, there is a 

factual dispute as to whether the qualifying offer was withdrawn. The plaintiffs 

contend that Hoboken MPT and Alaris partially performed under the terms of the 

First EPA by closing on the Real Estate Sales on November 5, 2019. It is reasonably 

conceivable that any efforts to disentangle the package deal through the Second EPA

were undertaken with an eye toward this litigation.70 Thus, a question of fact 

remains as to whether the Second EPA reflects the true “terms and conditions” of 

the Membership Interest Sale.

The plaintiffs raise another question concerning the qualifying-offer issue. 

They argue that neither the First EPA nor the Second EPA qualifies as an offer 

because both are final, executed agreements and not offers. 

 68 MPT Defs.’ Reply Br. at 3.

69 Farnsworth § 3.29, at 3-209.

70 See Union Oil Co. of Cal. v. Mobil Pipeline Co., 2006 WL 3770834, at *13 n.58 (Del. 

Ch. Dec. 15, 2006) (“The law is clear that when a first refusal right is involved, all deal 

terms must be commercially reasonable, imposed in good faith, and not specifically 

designed to defeat the preemptive right.”).
25

Generally, an offer triggering a first-refusal right is one that the seller receives 

and intends to accept.71 To identify a qualifying offer, a court must determine 

whether the seller intended to accept the offer. If a seller intends to accept the 

qualifying offer, the seller may not do so prior to honoring the first-refusal right.72 

It is “a violation of duty for [the seller] to make a contract to sell on any terms, even 

though the contract is expressly made ‘subject to’ the [first-refusal right]. If the 

court should hold otherwise, it would thereby extract most of the ‘teeth’ of [the firstrefusal] right.”73 Thus, a qualifying offer is necessarily something short of a binding

agreement. 

The LLC Agreement defines “Offer” as a “bona fide written offer to purchase 

the Membership Interests, stating the terms and conditions upon which the purchase 

is to be made.”74 Breaking it down, the defined term Offer means an offer that (1) 

 71 Corbin § 11.3, at 468–69 (a qualifying offer in the context of a first-refusal right is an 

offer that a seller intends to accept).

72 Williston § 67:89 (noting the first-refusal right “limits the right of the owner to dispose 

freely of its property by compelling the owner to offer it first to the party who has the first 

right to buy. Nor may the owner accept an offer made by a third party” (emphasis added)); 

Corbin § 11.4, at 489 (explaining that a first-refusal right is “a right that the [holder] shall 

be given an option to buy before any other offer is made or accepted” (emphasis added)).

73 Corbin § 11.3, at 480; see also id. (explaining that an owner’s “acceptance of that offer 

without first offering to [the right holder] on the same terms is a breach”); Kaplan v. Beach 

Dev. Corp., 1988 WL 55324, at *5 (Del. Super. May 23, 1988) (noting that a first-refusal 

right required the sellers “not to accept an offer for the purchase of [the property] made to 

it by a third party”). 

74 Am. Compl. Ex. A § 10.5(a).
26

is “bona fide,” (2) is in writing, (3) seeks to purchase Membership Interests, and 

(4) “states the terms and conditions upon which the purchase is to be made.”75 Of 

these four elements, the second and third are not disputed. The first and fourth 

require further examination. One legal dictionary defines “bona fide offer” as “[a]n 

offer that creates a binding contract upon acceptance” or “a valid offer made in good 

faith, [which] is an offer that is sufficient to bind both parties if it is accepted.”76 

Under general principles of contract law, an offer made “in good faith” is one that is 

not designed “for the purpose of inducing a rejection.”77 For an offer to be “binding 

upon acceptance,” it must contain sufficiently definite terms.78 In this latter sense, 

the definition of “bona fide offer” informs the meaning of the fourth element. That 

 75 Id.

76 Bona Fide Offer, Wolters Kluwer Bouvier Law Dictionary (2012) (“A bona fide offer 

must be made in good faith with the intent that it be honored if accepted, be made in clear 

and unambiguous terms by a party ready, willing, and able to perform its promise in a 

timely manner, offering appropriate value in its offer for the promise sought from the 

offeree, and without conditions of duress, fraud, or misrepresentation.”).

77 Corbin § 11.3, at 482. Cf. Restatement (Second) of Contracts § 26 (“A manifestation of 

willingness to enter into a bargain is not an offer if the person to whom it is addressed 

knows or has reason to know that the person making it does not intend to conclude a bargain 

until he has made a further manifestation of assent.”).

78 Restatement (Second) of Contracts § 33(1) (“Even though a manifestation of intention is 

intended to be understood as an offer, it cannot be accepted so as to form a contract unless 

the terms of the contract are reasonably certain.”); id. § 33(2) (“The terms of a contract are 

reasonably certain if they provide a basis for determining the existence of a breach and for 

giving an appropriate remedy.”); see Eagle Force Hldgs., LLC v. Campbell, 187 A.3d 

1209, 1232 (Del. 2018) (adopting Restatement (Second) of Contracts § 33 for determining 

whether terms of offer are “sufficiently definite”).
27

is, for an offer to be “bona fide,” it must state sufficiently definite “terms and 

conditions.”79

Putting it all back together, the defined term “Offer” means something that 

the seller intends to accept but had not yet accepted. It means an offer, made in 

writing, to purchase at least some Membership Interests, which the third party makes

to induce acceptance rather than rejection, and which states sufficiently definite

terms and conditions so as to be binding upon acceptance. As the plaintiffs argue, 

this definition could conceivably include a letter of intent or preliminary term sheet, 

provided that the document contains sufficiently definite terms and otherwise meets 

the definition of an Offer.80 This definition does not foreclose the seller and thirdparty from negotiating the terms of an offer before the first-refusal right is triggered; 

to the contrary, it requires it.

 79 The MPT Defendants appear to argue that this definition must be construed to require 

that all terms of the agreement be reduced to writing, including provisions such as choice 

of law and forum. They rely on this Court’s holding in USA Cable that such provisions 

were “undoubtedly material.” 2000 WL 875682, at *19. The court in USA Cable, however, 

made that finding post-trial upon a fully developed record, not on a motion for judgment 

on the pleadings.

80 The plaintiffs argue that their interpretation of “Offer” finds support in an agreement 

signed by the same parties contemporaneously with an amendment to the LLC Agreement. 

That document, the LLC Agreement of Hoboken Propco, defines “bona fide written offer” 

to include “a binding or non-binding letter of intent, term sheet, proposal, or [written 

evidence] otherwise outlining the proposed terms of a bona fide offer.” Am. Compl. Ex. 

B. § 6(a). 
28

Applying this definition to the facts of this case, it should be obvious that there 

are many factual disputes foreclosing judgment on the pleadings as to what 

constitutes the operative qualifying offer. The MPT Defendants argue that, under

the definition of “Offer,” the First EPA was the first qualifying offer triggering the 

first-refusal right because it was the first offer that the MPT Defendants intended to 

accept.

The MPT Defendants might ultimately prove that contention true, and it is

possible that the First EPA is the earliest qualifying Offer. At this stage, the Court 

cannot accept the moving party’s factual contentions as true if reasonable inferences 

can be drawn in the non-moving party’s favor.81 It is reasonably conceivable that

the First EPA is a final, memorialized contract, not a bona fide offer. The plaintiffs 

allege that the agreement appears to have been signed and thus accepted.82 They 

allege that the parties began performing aspects of the First EPA before the First 

Notice was delivered, as suggested by the fact that defendants closed on the Real 

Estate Sales that were a condition precedent to closing under the First EPA. They 

further allege that aspects of the First EPA were intended to bind Alarisimmediately, 

such as Alaris’s consent right discussed in the next section and Alaris’s agreement 

 81 OSI Sys., 892 A.2d at 1090.

82 The MPT Defendants raise a factual dispute by contending that neither the First EPA nor 

the Second EPA were fully executed agreements. See MPT Defs.’ Reply Br. at 11–12. 

But the Court cannot take defendants’ word for it, as factual disputes must resolve in the 

plaintiffs’ favor for the purpose of this motion. OSI Sys., 892 A.2d at 1090.
29

to indemnify Hoboken MPT for any lawsuit concerning the first-refusal right.83 

These allegations make it reasonably conceivable that the First EPA was not a 

qualifying offer, but rather, a binding agreement.

It is further reasonably conceivable that some written document reflecting the 

sufficiently definite terms was created at an earlier time. In fact, the Eisenreich 

Defendants admit in their Brief in Opposition to Plaintiffs’ Motion for a Temporary 

Restraining Order and Expedited Proceedings that “[i]n October of 2019, Alaris and 

[Hoboken MPT] entered into a letter of intent at the request of Alaris pursuant to 

which Alaris offered to purchase [the Membership Interest].”84 Thus, the plaintiffs 

have identified questions of fact regarding whether some written document 

evidencing the material terms of a qualifying offer was created prior to the First 

EPA. The existence of this document could have implications for the triggering of 

the first-refusal right.85

 83 Am. Compl. Ex. E § 11.2 (stating that Alaris will indemnify Hoboken MPT for “any 

claims, demands, causes of action, or proceedings by [Hoboken HUMC] which arises out 

of or relates solely to the transactions contemplated in this Agreement or the Purchase 

Agreements”).

84 Dkt. 38 at 8.

85 The plaintiffs also argue that Section 10.5 contains implicit timing requirements 

necessitating notice prior to closing. Pls.’ MPT Answering Br. at 33–35. They argue that 

this implied notice provision required Hoboken MPT to deliver the First Notice prior to 

closing on the package deal. I agree that Section 10.5 requires that notice be given before 

an aspect of the qualifying offer is accepted by performance of otherwise. See Corbin § 

11.3, at 492–93 (suggesting that the “right to receive notice of a third-party offer” is a 

“distinct legal right . . . included in” first-refusal right); id. (reasoning that “where the 
30

B. The Transfer Restrictions

Section 10.1 provides that “no Member shall make, permit or suffer any 

Transfer of all or any portion of his/its Membership Interest ([sic] or any governance 

rights or financial rights, voluntarily, by operation of law, or otherwise, except where 

the same is expressly required or permitted under this Agreement.”86

Hoboken HUMC claims that Hoboken MPT breached Section 10.1 of the 

LLC Agreement by providing consent rights to Alaris concerning amendments to 

the LLC Agreement. The First EPA specifically provides that Hoboken MPT may 

not consent to any amendments to the LLC Agreement “without the prior written 

consent of [Alaris].”87 The plaintiffs further allege that Hoboken MPT “advised in 

writing . . . that Plaintiffs were required to speak to Eisenreich (not the MPT 

Defendants) in connection with Hoboken MPT’s interest in [Hoboken] Opco.”88 

Hoboken HUMC’s claim raises interesting questions of law that the parties 

have not briefed, such as whether the transfer of consent rights of this nature 

constitutes a transfer of governance rights. Although Section 10.1 is specifically 

identified in the Amended Complaint,89 the MPT Defendants did not address 

 

grantor is trying to evade a duty under the right of first refusal, there may be no such 

communication”). The implications of this holding can be developed at a later stage.

86 Am. Compl. Ex. A § 10.1(a).

87 Am. Compl. ¶ 148.

88 Id. ¶ 184.

89 Id. ¶ 148.
31

Section 10.1 in their opening brief. This is a sufficient basis to deny the defendants’ 

motion for judgment on the pleadings as to Hoboken HUMC’s claim for breach of 

Section 10.1.

Open questions of fact provide another basis for denying the motion. In their 

reply brief, the MPT Defendants argue that they are entitled to judgment on the 

pleadings on this issue because the First EPA was withdrawn and the Second EPA

has not been consummated as a consequence of the temporary restraining order.90 

As discussed above, however, questions of fact remain as to whether the First EPA 

was actually withdrawn and replaced by the Second EPA. For these reasons, 

judgment on the pleadings as to this aspect of Count I is denied.

CONCLUSION

In sum, the plaintiffs have raised issues of disputed fact sufficient to avoid 

judgment on the pleadings. A question of fact remains as to what constituted a 

qualifying Offer and whether there was a qualifying Offer prior to the First EPA. 

Even if the First EPA is the first qualifying Offer, a question of law remains as to 

whether the first-refusal right issued in connection with the First EPA could be 

withdrawn, and a question of fact remains as to whether it was actually withdrawn. 

Questions of fact also remain on the scope issue concerning the terms and conditions 

applicable to the Membership Interest Sale. It cannot be determined on the pleadings 

 90 MPT Defs.’ Reply Br. at 13–14.
32

whether the First EPA or any prior qualifying offer properly valued the Membership 

Interest or whether that value was infected by the different components of the 

package deal. It is also difficult to isolate other material terms relevant to the 

Membership Interest Sale given that the deal was negotiated as a package deal. 

Finally, questions of law and fact remains as to the claim for breach of the transfer 

restrictions.

For these reasons, the MPT Defendants’ motion as to Count I is DENIED.