IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

77 CHARTERS, INC., individually and 

derivatively on behalf of Stonemar Cookeville 

Partners, LLC, and Cookeville Retail Holdings, 

LLC,

 Plaintiff,

 v.

JONATHAN D. GOULD, STONEMAR MM 

COOKEVILLE, LLC, COOKEVILLE 

CORRIDOR, LLC, EIGHTFOLD 

COOKEVILLE INVESTOR, LLC,

 Defendants,

STONEMAR COOKEVILLE PARTNERS, 

LLC and COOKEVILLE RETAIL HOLDINGS, 

LLC,

 Nominal Defendant.

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 C.A. No. 2019-0127-JRS

MEMORANDUM OPINION

Date Submitted: February 4, 2020

Date Decided: May 18, 2020

John L. Williams, Esquire and Brian C. Crawford, Esquire of The Williams Law Firm, P.A., 

Wilmington, Delaware, Attorneys for Plaintiff 77 Charters, Inc.

John A. Sensing, Esquire of Potter Anderson & Corroon LLP, Wilmington, Delaware and Greg S. 

Zucker, Esquire and Michael B. Weitman, Esquire of Westerman Ball Ederer Miller Zucker & 

Sharfstein, LLP, Uniondale, New York, Attorneys for Defendants Jonathan D. Gould, 

Stonemar MM Cookeville, LLC, Cookeville Corridor, LLC and Eightfold Cookeville 

Investor, LLC.

SLIGHTS, Vice Chancellor
1

In 2007, three groups of investors acquired a shopping mall in Tennessee for 

$29,394,000. One of these investors, Plaintiff, 77 Charters, Inc. (“77 Charters”), 

contributed $1,211,717 to the venture in exchange for a non-preferred ownership 

interest. The second investor, Defendant, Jonathan D. Gould, indirectly held a 

similar non-preferred interest. Non-party, Kimco Preferred Investor LXXIII, Inc. 

(“Kimco”), received preferred interests. Among other rights, Kimco’s preferred 

stake entitled it to receive a 9% annual rate of return on its investment before 

77 Charters or Gould would receive any distributions. All parties agreed that Gould, 

and entities he controlled, would run the mall’s day-to-day operations. 

While 77 Charters’ involvement with Gould and Kimco was limited to the 

mall in Tennessee, Kimco and Gould owned and operated malls throughout the 

Southeast. In 2013, without 77 Charters’ knowledge and for reasons unpled, Kimco 

decided to shed these investments. This left Gould in need of a new preferred 

investor. To fill the role, he identified Defendant, Eightfold Cookeville Investor, 

LLC (“Eightfold”). Unbeknownst to 77 Charters, Gould, Kimco and Eightfold

negotiated a three-step transaction whereby Eightfold ultimately acquired Kimco’s 

interest in the mall. 

First, Gould acquired Kimco’s preferred investment for $1,995,283. This 

gave Gould sole control over the operating entity the parties had formed to hold and 

operate the mall. Second, Gould amended the operating entity’s constitutive 
2

documents to advantage the mall’s preferred investors (i.e., himself) beyond the 

rights Kimco had enjoyed. Among other changes, Gould increased his distribution 

preference from a 9% rate of return to 12.5%. Third, Gould sold part of Kimco’s 

interest to Eightfold for $1,995,283—the same price he paid for all of Kimco’s 

interest—while retaining a slice of the preferred stake for himself. 

By 2016, 77 Charters decided to investigate the status of its investment. 

Its efforts eventually led to a formal books and records demand in 2017 under 

6 Del. C. § 18-305 of the Delaware Limited Liability Company Act (the “Act”). 

Just as it appeared 77 Charters would be receiving documents, in 2018, Gould and 

Eightfold agreed to sell the mall for $30,200,000. After paying off the mall’s 

creditors, $4,768,045 was left over for distribution to preferred investors. 

77 Charters received nothing. 

In the wake of the sale, 77 Charters filed a complaint in this Court, which it 

later amended.

1

 While creative minds can differ on how best to structure and plead 

a complaint, I have found 77 Charters’ approach here to have made the task of 

discerning the precise nature of its legal claims quite difficult. 77 Charters structured 

its Complaint as a streaming narrative followed by a laundry list of claims that 

 

1 D.I. 1; First Am. Verified Compl. (“Compl.”) (D.I. 25). 
3

generally incorporate the narrative but do not state why or how the facts meet the 

prima facie elements of the claim asserted. 

As best I can tell, 77 Charters’ primary allegation is that Gould, and the 

entities he controlled, breached their fiduciary duties by acquiring Kimco’s interest, 

amending the relevant operating agreement to benefit Gould and then selling the 

mall at a time and in a manner where he would recover his investment (and more) 

while leaving 77 Charters with nothing. In some instances, 77 Charters describes

this chain of events from 2013 to 2018 as a single wrong; in others, it describes them 

as several “Wrongful Acts.”2 

To further complicate the Court’s analysis, one of 77 Charters’ “main 

target[s]” in this action is Gould, who was neither a member nor a manager of the 

mall’s operating entity in his individual capacity.3 Perhaps acknowledging that 

Gould’s remote status would not give rise to traditional fiduciary duties, 77 Charters

attempts to rest its claims upon the framework established in USACafes, L.P. 

Litigation,

4 where Chancellor Allen held remote “controllers” of an alternative entity 

 

2 Compare Compl. ¶ 3 (describing this chain of events as a single “deal”), with Compl. ¶ 93 

(describing a long list of separate “wrongful acts”). 

3 Oral Arg. on Defs.’ Mot. to Dismiss First Am. Compl. (“Tr.”) (D.I. 40) at 39. 

4 Compl. ¶ 104; In re USACafes, L.P. Litig., 600 A.2d 43 (Del. Ch. 1991). 
4

may owe limited fiduciary duties, the “full scope” of which the court did not 

“delineate.”5 

In addition to 77 Charters’ claims against Gould and the entities he controls, 

77 Charters also brings aiding and abetting, civil conspiracy, unjust enrichment and 

breach of contract claims against Eightfold. Again, the precise factual bases of these 

claims is difficult to make out. 

All Defendants have moved to dismiss the Complaint under Court of 

Chancery Rule 12(b)(6) for failure to state viable claims (the “Motion”).

6

 

For reasons explained below, after giving 77 Charters all fair and reasonable 

inferences, the Motion will be granted in part and denied in part. 77 Charters’ efforts 

to loop Eightfold into its dispute with Gould fail as it is not reasonably conceivable 

that Eightfold was anything other than a third-party purchaser of Kimco’s preferred 

interest. As for Gould and his entities, I am satisfied 77 Charters has well pled viable 

breach of fiduciary duty and civil conspiracy claims against these defendants. 

But only a narrow swath of the Complaint’s enumerated “Wrongful Acts” is 

actionable as a matter of law.7 

 

5

In re USACafes, 600 A.2d at 49. 

6 D.I. 27. 

7 Compl. ¶ 93. 
5

Based on the operating entity’s constitutive documents, Gould’s acquisition 

of the preferred interest, standing alone, could not have been wrongful as he (and his 

entities) had the contractual right to compete with 77 Charters for additional 

investments in the mall. Similarly, 77 Charters has not well pled a stand-alone 

breach of fiduciary duty claim arising out of the mall’s sale in 2018. Gould’s 

amendment of the operating agreement, however, is a different story. It is reasonable 

to infer Gould amended the mall’s operating agreement in a self-dealing transaction 

that was not entirely fair to 77 Charters. Accordingly, this narrow aspect of 

77 Charters’ claims must survive Defendants’ Motion.

I. FACTUAL BACKGROUND

I draw the facts from the allegations in the Complaint, documents 

incorporated by reference or integral to that pleading and judicially noticeable facts.8 

For purposes of the Motion, I accept as true the Complaint’s well-pled factual 

allegations and draw all reasonable inferences in 77 Charters’ favor.9

 

8 See Wal-Mart Stores, Inc. v. AIG Life Ins. Co., 860 A.2d 312, 320 (Del. 2004) (quoting 

In re Santa Fe Pac. Corp. S’holder Litig., 669 A.2d 59, 69 (Del. 1995)) (noting that on a 

motion to dismiss, the court may consider documents that are “incorporated by reference” 

or “integral” to the complaint); D.R.E. 201–02 (codifying Delaware’s judicial notice 

doctrine).

9 Savor, Inc. v. FMR Corp., 812 A.2d 894, 896–97 (Del. 2002). 
6

Parties and Relevant Non-Parties

Nominal Defendant, Cookeville Retail Holdings, LLC (“Cookeville Retail”), 

is a Delaware limited liability company that was formed to invest in a retail shopping 

center located in Cookeville, Tennessee (“Jackson Plaza”).

10

 Cookeville Retail was 

formed on March 8, 2007, by (i) its managing member (nominal Defendant and 

Delaware limited liability company, Stonemar Cookeville Partners, LLC 

(“Stonemar Cookeville”)) and (ii) its preferred member, Kimco.

11

For its part, Stonemar Cookeville was formed on July 31, 2007, by (i) its 

managing member (Defendant, Stonemar MM Cookeville, LLC (“Stonemar MM”)) 

and (ii) its non-managing members, one of which is 77 Charters.

12

 Stonemar 

Cookeville is a special purpose entity formed “to hold direct or indirect investments 

in commercial real estate properties,” but its main “objective . . . was to obtain 

financial distributions from Cookeville Retail.”13 

At the top of the organizational hierarchy sits Defendant, Jonathan D. Gould, 

a New York resident and managing member of Stonemar MM and Defendant, 

 

10 Compl. ¶ 1; Compl. Ex. C § 1.1 (definition of the “Project”), § 2.5 (Cookeville Retail’s 

“purposes and scope” were “strictly limited” to acquiring and maintaining Jackson Plaza.). 

11 Compl. ¶¶ 1, 8, 19. 

12 Compl. ¶¶ 5, 7, 15. 

13 Compl. ¶¶ 15, 17–18. 
7

Cookeville Corridor, LLC (“Cookeville Corridor”).

14

 In addition to his interests in 

Stonemar MM and Cookeville Corridor, Gould is alleged to control Defendant, 

Stonemar Realty Management, LLC (“Stonemar Realty”).15

Kimco is owned by non-party, Kimco Realty Corporation (“Kimco Realty”),

a publicly-traded real estate investment trust.

16

 As noted, Kimco was a co-investor, 

along with Stonemar Cookeville, in Cookeville Retail.17 Apart from this investment, 

Kimco Realty had “other commercial dealings” with Gould, including malls in 

Kentucky and Mississippi.18

Eightfold’s ownership structure is something of a mystery in the Complaint.19 

What is clear, however, is that Eightfold would eventually take Kimco’s place as a

preferred investor in Cookeville Retail.20 77 Charters does not allege Eightfold is 

owned or controlled by Gould. 

 

14 Compl. ¶¶ 3, 6–7, 10, 20. Gould is alleged to be the “sole owner” of Cookeville Corridor. 

Compl. ¶ 10. 

15 Compl. ¶ 23. 

16 Compl. ¶¶ 19, 35, 63. 

17 Compl. ¶ 19.

18 Compl. ¶ 35. 

19 See, e.g., Compl. ¶ 63 (“It is unclear . . . whether Kimco Realty [] owns an interest in 

Eightfold.”). 

20 Compl. ¶¶ 11, 36, 63. 
8

The following chart depicts the relationships between the parties circa 2007:

21

The Basic Investment Structure

The parties structured their investments in Cookeville Retail so that 

77 Charters would be a passive investor, while Gould and the entities under his 

control would oversee all of Jackson Plaza’s operations.22 With this structure as the 

 

21 Compl. ¶¶ 1–22. 

22 Compl. ¶ 24. 
9

backdrop, Cookeville Retail purchased Jackson Plaza for ~$29,000,000 on August 9, 

2007.23 Of this purchase price, Cookeville Retail borrowed $24,380,000 

(the “Loan”).

24

Cookeville Retail’s Limited Liability Company Agreement provided that

Stonemar Cookeville and Kimco would distribute returns on investments according 

to a waterfall.

25

 At the Cookeville Retail level, any distributions would be allocated, 

first, to Kimco’s preferred membership interests until it had received a specified 

preferred return of at least 9% on its capital contributions (the “Preferred Interest”).

26

 

Then, excess returns would be distributed to Stonemar Cookeville and its members 

(including 77 Charters) who were, essentially, the residual equity holders in Jackson 

Plaza.27 

In anticipation of Cookeville Retail’s purchase of Jackson Plaza, Gould, 

acting through Stonemar MM and Stonemar Cookeville, caused Cookeville Retail 

to enter into a management and leasing agreement (the “Management Agreement”) 

with Stonemar Realty where it was agreed that Stonemar Realty alone would manage 

 

23 Compl. ¶ 21. 

24 Compl. ¶ 22. 

25 Compl. ¶ 49; Compl. Ex. C § 8.2. 

26 Compl. ¶ 49; Compl. Ex. C § 8.2. 

27 Compl. ¶ 49. 
10

Jackson Plaza’s day-to-day operations.28 According to 77 Charters, this arrangement 

caused it to be so far removed from Jackson Plaza’s business that it had no 

knowledge of the Management Agreement or Cookeville Retail’s operating 

agreement.

29

The Relevant Contracts

The principal agreements governing the relationship between 77 Charters, 

Kimco, Gould and the entities he controlled are the Limited Liability Company 

Agreement of Cookeville Retail Holdings LLC (the “CRA”) and the Limited 

Liability Company Operating Agreement of Stonemar Cookeville Partners, LLC 

(the “SCA”).30 I summarize the key provisions of both agreements below.

1. The CRA

Two parties, Kimco and Stonemar Cookeville, executed the CRA in August

2007.

31 In keeping with Stonemar Cookeville’s manager-managed structure, 

Section 4.1(a) provides, “Manager [(Stonemar Cookeville)] shall manage the affairs 

of the Company and shall have sole authority to bind and take any action on behalf 

 

28 Compl. ¶ 23. 

29 Compl. ¶ 25. 

30 See Compl. Ex. C (the “CRA”); Compl. Ex. B (the “SCA”). 

31 CRA (recitals). The CRA defines Cookeville Retail’s “Members” as Kimco and 

Stonemar Cookeville. CRA § 1.1 (definitions of “Members,” “Developer Member” and 

“Kimco Member”).
11

of the Company.”32 In performing this role, the CRA obligates Stonemar Cookeville 

to manage Cookeville Retail “as would a prudent manager under similar 

circumstances” and “[to] conduct the ordinary business and affairs of the Company 

in accordance with good industry practice.”33 At Section 4.7, the CRA expressly 

acknowledges that Cookeville Retail had entered into the Management Agreement 

with Stonemar Realty whereby Stonemar Realty would be paid “a monthly fee not 

to exceed 4% of collected rents” in exchange for its services.34 

While Kimco and Gould were frequently co-investors in real estate projects, 

Section 4.9, captioned “Other Business Activities,” preserves each Member’s ability 

to invest and even compete with other parties to the CRA.

35

 Section 4.9 provides: 

each Member, Manager or Affiliate36 thereof may engage in and 

possess interests in other business ventures . . . independently . . . 

including ones in direct or indirect competition with the Company, with 

 

32 Compl. ¶ 23; CRA § 4.1. 

33 CRA § 4.1(c). If, however, a matter were subject to a vote of Cookeville Retail’s 

members, Section 4.1(d) directs “Members” to “take into account the interests of the 

Company’s creditors as well as the interests of its Members” when deciding how to vote. 

CRA § 4.1(d).

34 CRA § 4.7. 

35 CRA § 4.9. 

36 The CRA defines an “Affiliate” to mean “with respect to a Person, another Person, 

directly or indirectly, through one or more intermediaries, controlling, controlled by, or 

under common control with the Person in question.” CRA § 1.1 (definition of “Affiliate”). 

The CRA defines a “Person” to mean “an individual or any entity of any type.” Id.
12

no obligation to offer to the Company . . . the right to participate 

therein.37

The CRA limited Kimco and Stonemar Cookeville’s ability to transfer their 

respective membership interests without the other’s consent. Section 3.2, captioned 

“Dispositions of Membership Interests,” provides, “No Member may Transfer all or 

any portion of its Membership Interest, except with the consent of the other 

Member,” which may be “given or withheld in the other Member’s sole and absolute 

discretion.”38 Along the same lines, under Article 12 of the CRA, captioned “BuySell Option,” either member could give “notice to the other Member . . . stating 

therein the aggregate dollar amount (the “Valuation Amount”) which the Offeror 

would be willing to pay for all . . . of the assets of” Cookeville Retail.39 Upon 

receiving this notice, the other member would have the option of either (i) selling 

“its entire Membership Interest” or (ii) purchasing “the entire Membership Interest 

of the Offeror” based on the valuation proposed by the offering-member.40

 

37 CRA § 4.9. 

38 CRA § 3.2(ii), (iii).

39 CRA § 12.1(b). 

40 CRA § 12.1(c). 
13

2. The SCA

Stonemar MM and Stonemar Cookeville’s minority members (including 

77 Charters) executed the SCA in August 2007.41 The SCA’s recitals explain the 

agreement was “entered into . . . by and among” Stonemar MM as the “Managing 

Member” and “the other Persons who have executed this Agreement . . . (each, a 

‘Member’ and, together with the Managing Member, the ‘Members’).”42 

As structured, Stonemar MM is both a “Member” and the “Managing Member” 

under the SCA.

To memorialize Stonemar MM’s role as managing member, Section 6.1 of the 

SCA states, “[t]he business and affairs of the Company shall be managed by and 

under the exclusive direction of the Managing Member [(Stonemar MM)] and all 

powers of the Company may be exercised exclusively by the Managing Member.”43 

Section 10.2, captioned “Liability and Indemnification,” provides, “[t]o the fullest 

extent permitted by applicable law . . . no Person44 acting in its capacity as a Member 

 

41 SCA (recitals and signature page). 

42 SCA (recitals). 

43 SCA § 6.1. 

44 Like the CRA, the SCA broadly defines a “Person” to include “any individual, 

corporation, . . . limited liability company . . . or other entity.” SCA § 1.17. 
14

(including the Managing Member and its Affiliates) shall be personally liable to the 

Company or its members for money damages.”45 

Like the CRA, the SCA makes clear that members may compete with each 

other and with the company. Section 10.4 provides: 

Each Member acknowledges that: (i) the other Members (including the 

Managing Member) and their respective Affiliates46 have or may have 

other business interests . . . some of which may be in conflict or 

competition with the business of the Company . . . , and (ii) the 

Members and their Affiliates may engage in or possess an interest in 

any other business or venture of any kind. . . . Except as provided for 

herein, neither the Company nor any Member shall have any right, by 

virtue of this Agreement, in such activities, or the income or profits 

derived therefrom, and the pursuit of such activities, even if competitive 

with the business of the Company, shall not be deemed wrongful or 

improper.47

The “business of the Company” with which Stonemar Cookeville’s members are 

entitled to compete is not defined in the SCA. The agreement, however, does define 

Stonemar Cookeville’s “purpose” as “mak[ing] direct or indirect investments in 

commercial real estate properties.”48 In particular, Stonemar Cookeville’s “initial 

 

45 SCA § 10.2(a). 

46 The SCA defines “Affiliate” to include “any Person or group of Persons . . . that directly 

or indirectly through one or more intermediaries controls or is controlled by or is under 

common control with [a] particular Person.” SCA § 1.3. 

47 SCA § 10.4.

48 SCA § 2.3. 
15

investment” was meant to facilitate the acquisition of an indirect interest in Jackson 

Plaza.49

The Kimco Interest Sale

From 2007 until 2013, Jackson Plaza operated under the structure described 

above, with Kimco receiving preferred distributions and the non-preferred investors 

receiving any distributions in excess of the Preferred Interest’s guaranteed rate of 

return.50 But, on July 1, 2013, Kimco sold the Preferred Interest to Cookeville 

Corridor (the “Kimco Interest Sale”).

51 This transaction was part of Kimco’s broader 

divestment of its real-estate interests, which implicated multiple properties where 

Gould and Kimco were co-investors.52 

Ostensibly to avoid Jackson Plaza’s sale at a depressed price, Gould caused 

Cookeville Corridor to pay Kimco $4,500,000 for its preferred stake in two separate 

properties.

53 Of this purchase price, $1,995,283 was allocated to the Preferred

Interest, with the balance going to an unrelated property in Kentucky.

54

 Through the 

 

49 SCA § 2.3. 

50 Compl. ¶¶ 23–24.

51 Compl. ¶¶ 2, 31–32. 

52 Compl. ¶ 37. 

53 Compl. ¶¶ 2–3, 31–32. 

54 Compl. ¶¶ 2, 31–32. 
16

Kimco Interest Sale, Gould positioned himself (albeit temporarily) to be in complete 

control of Cookeville Retail by joining the Preferred Interest with Stonemar 

Cookeville’s non-preferred, managing interest.

55

 

When Cookeville Corridor acquired the Preferred Interest, Gould had already 

identified Eightfold as a suitable preferred investor to carry on in Kimco’s stead.

56

 

Immediately after Cookeville Corridor purchased the Preferred Interest, Gould

caused Cookeville Retail, Stonemar Cookeville and Cookeville Corridor, along with 

Eightfold, to amend the CRA by entering into the Amended and Restated Limited 

Liability Company Operating Agreement (the “Amended CRA”) on July 1, 2013.57 

Under the Amended CRA, Eightfold and Cookeville Corridor were admitted as 

members of Cookeville Retail.58

According to 77 Charters, the Amended CRA had a more sinister purpose than 

simply replacing Kimco with Eightfold. Specifically, it is alleged that Gould’s stated 

purpose of “preventing the sale of Jackson Plaza” was just a “guise” for his true plan 

to “reward himself through a Rube Goldberg contraption.”59 According to 77 

 

55 Compl. ¶¶ 37–38; CRA (recitals). 

56 Compl. ¶ 38.

57 Compl. ¶ 43; Compl. Ex. D. 

58 Compl. ¶ 43; Amended CRA § 1.2. 

59 Compl. ¶ 3. 
17

Charters, the Amended CRA was the foundation for the “contraption” that allowed 

Gould to extract value from Cookeville Retail at 77 Charters’ expense.

60 For 

example, Gould used his newfound control of Cookeville Retail to enhance the 

Preferred Interest’s annual returns from 9% to 12.5%.

61 Gould also caused Stonemar 

Cookeville, as managing member, to be subjected to a lower standard of care in the 

Amended CRA than was embedded within the original CRA.62

With Kimco’s exit, it is alleged that Gould seized an opportunity to restructure 

Cookeville Retail’s distribution scheme at 77 Charters’ expense.

63

 Of Kimco’s total 

capital account balance at the time of the Kimco Interest Sale ($3,927,016), 

Cookeville Corridor kept $1,931,733 (the “Retained Interest”),

64 while passing on 

the remainder ($1,995,283) to Eightfold (the “Eightfold Interest”).

65

 Even though 

Eightfold received only a portion of the Preferred Interest, Eightfold paid Cookeville 

 

60 Compl. ¶ 49. 

61 Compl. ¶¶ 43, 49. Here, I note the parties dispute the Preferred Interest’s rate of return 

under the CRA. Compare Defs.’ Opening Br. in Supp. of Mot. to Dismiss First Am. 

Verified Compl. (“DOB”) at 35 n.10 (7%), with Compl. ¶ 49 (9%). I do not resolve this 

dispute as Defendants concede “there may have been differences between the agreements’ 

‘waterfall’ structures.” DOB at 34. 

62 Compl. ¶ 51. 

63 Compl. ¶¶ 32, 38–39, 49. 

64 The Complaint vaguely describes the retained capital account balance as “a retained right 

to potential distributions to the extent, if any.” Compl. ¶ 38 (sic). 

65 Compl. ¶¶ 32, 38–39. 
18

Corridor $1,995,283 for the Eightfold Interest (the same price Cookeville Corridor 

paid for the entire Preferred Interest).

66

 Under this new structure, the Retained 

Interest entitled Cookeville Corridor to receive a portion of Cookeville Retail’s 

preferred distributions with Eightfold.67

As a minority investor in Stonemar Cookeville, 77 Charters was not a party to 

either the CRA or the Amended CRA.

68

 Given this status, despite the transformative 

nature of the Kimco Interest Sale and Eightfold’s admission as a new preferred

investor, 77 Charters alleges it had no notice of the Kimco Interest Sale or Stonemar 

Cookeville’s consent to the transaction.

69

77 Charters’ Books and Records Action and the Jackson Plaza Sale

By May 2016, roughly three years after the Kimco Interest Sale, 77 Charters

eventually became “concerned” enough about its investment to make informal 

requests for documents from Stonemar Cookeville.70 Frustrated with the response, 

77 Charters formalized its request for information with a demand under 6 Del. C. 

 

66 Compl. ¶¶ 32, 38–39. 

67 Compl. ¶ 49. To effectuate the Kimco Interest Sale, Gould, acting as managing member 

of Stonemar MM, caused Stonemar Cookeville to consent to the transaction under 

Section 3.2 of the CRA. Compl. ¶¶ 31–32, 40.

68 Compl. ¶¶ 33, 44. 

69 Compl. ¶ 33. 

70 Compl. ¶ 54. 
19

§ 18-305.71 Still dissatisfied with Stonemar Cookeville’s response, 77 Charters filed 

a books and records action on February 14, 2018.72 That action ended on June 12, 

2018, with 77 Charters’ voluntary dismissal as part of a settlement that allowed

77 Charters to inspect certain Stonemar Cookeville documents.73

Shortly after this settlement, and without 77 Charters’ advance knowledge, on 

June 27, 2018, Cookeville Retail sold Jackson Plaza to a third party for a purchase 

price of $30,200,000 (the “Jackson Plaza Sale”).74 Gould signed a written consent 

on behalf of Stonemar MM, Stonemar Cookeville and Cookeville Corridor 

authorizing the transaction.75

77 Charters learned of the Jackson Plaza Sale in a letter from Gould in which 

Gould advised that the sale proceeds were “insufficient to return any funds to 

77 Charters.”76 The first $24,926,268 of the sale proceeds were used to repay the 

Loan with the remaining $4,768,045 going to Cookeville Retail.77 Gould’s letter 

 

71 Compl. ¶ 54. 

72 Compl. ¶ 55. See 77 Charters, Inc. v. Stonemar Cookeville P’rs, LLC, C.A. No. 2018-

0126-AGB. 

73 Compl. ¶ 56. 

74 Compl. ¶ 57. 

75 Compl. ¶ 59. 

76 Compl. ¶ 63. 

77 Compl. ¶¶ 64, 70.
20

stated that this balance was then distributed to “Kimco Realty Corp.”78 

Notwithstanding this representation, 77 Charters alleges, on information and belief, 

that this sum actually went to Eightfold and Cookeville Corridor (in unspecified 

proportions).

79

 No distribution was made to Stonemar Cookeville.80

Procedural Posture

77 Charters filed its original complaint on February 18, 2019.81 After 

Defendants filed a motion to dismiss, 77 Charters responded by amending its 

pleading with the now-operative Complaint.82 In the Complaint, 77 Charters alleges 

Gould caused entities under his control to engage in ten “Wrongful Acts,” which can 

be grouped into four categories:83

 Business opportunity claims: causing Stonemar Cookeville to agree 

to the Kimco Interest Sale and admitting Eightfold as a member while 

“seiz[ing] the opportunity of the Stonemar Cookeville members to 

purchase [the Preferred Interest] pursuant to Stonemar Cookeville’s 

option to buy and as otherwise available as a business opportunity to 

Stonemar Cookeville members”;84

 

78 Compl. ¶ 63. 

79 Compl. ¶¶ 2, 66. 

80 Compl. ¶¶ 2, 67. 

81 D.I. 1. 

82 D.I. 10; D.I. 25. 

83 Compl. ¶ 93. 

84 Compl. ¶ 93(b)–(c). 
21

 Wrongful charter amendment: causing Stonemar Cookeville to enter 

the Amended CRA, which included terms more beneficial to 

Cookeville Corridor and Eightfold than were provided to Kimco under 

the CRA;85

 Jackson Plaza Sale: causing Stonemar Cookeville to agree to both the 

Jackson Plaza Sale for an unfair price and the subsequent “improper 

distributions of proceeds from the sale of Jackson Plaza”;86

 Management Agreement: Causing Stonemar Cookeville to enter into 

the Management Agreement on behalf of Cookeville Retail and, 

pursuant to those agreements, “engaging in transactions which were not 

arms’ length transactions” and were not entirely fair.87

Based on these Wrongful Acts, 77 Charters brings (i) breach of contract 

claims against Cookeville Corridor, Eightfold and Stonemar MM (Counts VII 

and X),88 (ii) direct and derivative breach of fiduciary duty claims against Stonemar 

MM, Stonemar Cookeville and Gould (Counts I–III),89 (iii) aiding and abetting 

breach of fiduciary duty claims against Gould, Eightfold and Stonemar MM (Counts 

IV and XI),90 (iv) a civil conspiracy claim against Gould, Stonemar MM, Cookeville 

Corridor and Eightfold (Count V),91 (v) an unjust enrichment claim against Gould, 

 

85 Compl. ¶ 93 (d)–(f). 

86 Compl. ¶ 93 (g)–(h). 

87 Compl. ¶ 93(a). 

88 Compl. ¶¶ 127–32, 144–60.

89 Compl. ¶¶ 81, 89–109. 

90 Compl. ¶¶ 110–17, 153–60. Count XI is pled in the alternative. 

91 Compl. ¶¶ 118–20. 
22

Stonemar MM, Cookeville Corridor and Eightfold (Count VI),92 (vi) a tortious 

interference with business relations claim against Gould, Cookeville Corridor and 

Eightfold (Count VIII)93 and (vii) a claim seeking a judgment declaring the 

Amended CRA is void (Count IX).94

On September 6, 2019, Defendants filed the Motion in which they seek an 

order dismissing all counts of the Complaint with prejudice under Court of Chancery 

Rule 12(b)(6).

95

 

II. ANALYSIS

In considering a motion to dismiss under Court of Chancery Rule 12(b)(6), 

the Court applies a well-settled standard: 

(i) all well-pleaded factual allegations are accepted as true; (ii) even 

vague allegations are ‘well-pleaded’ if they give the opposing party 

notice of the claim; (iii) the Court must draw all reasonable inferences 

in favor of the non-moving party; and (iv) dismissal is inappropriate 

unless the Plaintiff would not be entitled to recover under any 

reasonably conceivable set of circumstances susceptible of proof.96

 

92 Compl. ¶¶ 121–26. 

93 Compl. ¶¶ 133–39. 

94 Compl. ¶¶ 140–43. 

95 D.I. 40. 

96 Savor, 812 A.2d at 896–97 (citations omitted). 
23

On top of the convoluted structure of 77 Charters’ pleading, and the sheer 

breadth of its claims, outright mistakes in the Complaint (which 77 Charters

characterizes as “scriveners errors”) have made deciding the Motion extraordinarily 

difficult.97 Against the backdrop of the Complaint’s disorganization, I begin my 

analysis with the first argument 77 Charters makes in its Answering Brief—that it 

has well-pled Defendants wrongfully “usurp[ed] [a] business opportunity.”

98

 Even 

for this opening scene, however, 77 Charters has forgotten its lines. Notwithstanding 

its repeated characterization of its allegations as “business opportunity” claims, at 

oral argument, 77 Charters’ counsel changed course and argued that what 

77 Charters has actually alleged is “[what] I would say in the classic sense [is] selfdealing.”99

 

While the Complaint has done as much to obscure as it has to expose a claim, 

giving 77 Charters the benefit of all reasonable inferences, I am satisfied the 

Complaint gives Defendants fair notice of a reasonably conceivable claim that 

 

97 See, e.g., Compl. ¶¶ 133, 140 (The Complaint has two Count VIIIs.); Compl. ¶ 140 

(The second Count VIII (i.e., Count IX) is labeled “Tortious Interference” when it is a 

claim seeking declaratory judgment.); Compl. ¶¶ 144, 151 (Count X—which is brought 

only against Cookeville Corridor and Eightfold—alleges “Stonemar MM caused Stonemar 

Cookeville and Cookeville Retail to agree to terms of payment and to pay Stonemar 

Realty . . . in excess of what was permitted.”); Pl.’s Answering Br. in Opp’n to Mot. to 

Dismiss First Am. Verified Compl. (“PAB”) at 72 (referencing yet another mistake). 

98 PAB at 21; Compl. ¶¶ 32, 34, 93(c).

99 See Compl. ¶¶ 3, 32, 93(c); Tr. at 33. 
24

Stonemar MM and Gould breached their fiduciary duties by engaging in self-dealing 

when adopting the Amended CRA. Based on this conclusion, I also find 77 Charters

has well pled the prima facie elements of civil conspiracy against Cookeville 

Corridor—as well as a claim seeking reformation of the Amended CRA. 

All remaining claims, however, must be dismissed for failure to state viable claims. 

77 Charters Has Well Pled a Breach of Fiduciary Duty Against Gould

and Stonemar MM (Counts I, II and III)

In Counts I, II and III, 77 Charters alleges Gould and Stonemar MM

(the “Fiduciary Defendants”), as well as Stonemar Cookeville, breached their 

fiduciary duties by engaging in the Wrongful Acts.

100

 Both Stonemar Cookeville 

and Cookeville Retail are Delaware LLCs and, as such, the Act permits their 

respective members to “expand or restrict” the “member’s or 

manager’s . . . duties.”101 Given the centrality of the operating agreement in 

governance disputes involving alternative entities, “it is frequently impossible to 

decide fiduciary duty claims without close examination and interpretation of the 

governing instrument of the entity giving rise to what would be, under default law, 

 

100 Compl. ¶¶ 89–109. 

101 6 Del. C. §§ 18-1101(c), 18-1104; CHS Theatres, LLC v. Nederlander of San Francisco 

Assocs., 2015 WL 1839684, at *11 (Del. Ch. Apr. 21, 2015); Douzinas v. Am. Bureau of 

Shipping, Inc., 888 A.2d 1146, 1149–50 (Del. Ch. 2006). 
25

a fiduciary relationship.”102 And, because a LLC agreement is a contract, its 

interpretation is generally subject to ordinary contract law principles.103

Without language in an LLC agreement to the contrary, the managers of a 

Delaware LLC owe traditional fiduciary duties of care and loyalty.104 “Although 

fiduciary duties may be disclaimed, agreements’ drafters must do so clearly, and 

should not be incentivized to obfuscate or surprise investors by ambiguously 

stripping away the protections investors would ordinarily receive.”105 Indeed, it is 

now settled in this court that the removal of default fiduciary duties through an LLC 

agreement must be accomplished with clear and unambiguous language.

106

 

With these settled principles in mind, the first step in my analysis of each of 

the fiduciary duty claims is to construe the terms of the CRA and SCA against the 

backdrop of the applicable default rules to discern (i) which, if any, of the 

Defendants would owe fiduciary duties, (ii) whether default fiduciary duties have 

 

102 Douzinas, 888 A.2d at 1149–50; Fisk Ventures, LLC v. Segal, 2008 WL 1961156, at *1 

(Del. Ch. May 7, 2008) (observing that “[c]ontractual language defines the scope, structure, 

and personality of limited liability companies”). 

103 Domain Assocs., L.L.C. v. Saha, 2018 WL 3853531, at *18 (Del. Ch. Aug. 13, 2018). 

104 6 Del. C. § 18-1104; CHS Theatres, 2015 WL 1839684, at *11.

105 Ross Hldg. & Mgmt. Co. v. Advance Realty Gp., LLC, 2014 WL 4374261, at *15 

(Del. Ch. Sept. 4, 2014). 

106 CelestialRX Invs., LLC v. Krivulka, 2017 WL 416990, at *16 (Del. Ch. Jan. 31, 2017) 

(citing Feeley v. NHAOCG, LLC, 62 A.3d 649, 664 (Del. Ch. 2012)). 
26

been waived or modified by contract and (iii) whether the Complaint well pleads a 

breach of those duties.

1. It Is Reasonably Conceivable Stonemar MM and Gould Owe Default 

Fiduciary Duties

There appears to be no question that Stonemar MM owes default fiduciary 

duties as managing member of Stonemar Cookeville.107 As for Gould (Count I), 

although he is neither member nor manager of Stonemar Cookeville or Cookeville 

Retail, this court has held, under certain circumstances, that second-tier controllers 

may owe limited fiduciary duties.108 USACafes recognizes remote controllers 

(such as Gould) will owe limited fiduciary duties if they “exert control over the assets 

of that entity.”109 The Complaint adequately pleads a remote controller scenario by 

alleging that Gould personally undertook all the Wrongful Acts as Stonemar MM’s 

 

107 Feeley, 62 A.3d at 660 (“Numerous Court of Chancery decisions hold that the manager 

of an LLC owes fiduciary duties.”). 

108 See In re USACafes, 600 A.2d 43. Under a “traditional approach,” only Stonemar MM 

would owe fiduciary duties to Stonemar Cookeville which, in turn, would owe fiduciary 

duties to Cookeville Retail. Gotham P’rs, L.P. v. Hallwood Realty P’rs, L.P., 

2000 WL 1476663, at *20 (Del. Ch. Sept. 27, 2000); Metro Ambulance, Inc. v. E. Med. 

Billing, 1995 WL 409015, at *3 (Del. Ch. July 5, 1995) (noting that those who traditionally 

have been recognized to owe fiduciary duties are those who occupy a special relationship 

of trust with another who relies upon his judgment, such as trustees, executors, directors 

and officers).

109 Bay Ctr. Apartments Owner, LLC v. Emery Bay PKI, LLC, 2009 WL 1124451, at *9–

10 (Del. Ch. Apr. 20, 2009) (applying “USACafes-type liability” in a LLC context); Feeley, 

62 A.3d at *667 (holding USACafes duties do not include the duty of care and have only 

been extended to “classic self-dealing” transactions) (quoting In re USACafes, 600 A.2d 

at 49). 
27

manager.110 Defendants appear to concede as much by not challenging whether 

Gould owes default fiduciary duties in their briefs.111 

Turning to Count II, in a turn that would make Fielding Mellish proud, 

77 Charters attempts to bring a derivative breach of fiduciary duty claim against

nominal Defendant, Stonemar Cookeville, while, at the same time, purporting to 

bring claims on behalf of Stonemar Cookeville.112 77 Charters’ counsel conceded at 

oral argument that he “didn’t know” of a case where this court had sanctioned a 

plaintiff derivatively “representing” an entity while “going after” the same entity as 

defendant in the same case.

113

 Enough said. Count II must be dismissed.114 

 

110 See, e.g., Compl. ¶ 37 (“Gould [] caused Cookeville Retail to transfer to Kimco cash 

and rent receivables.”), ¶ 38 (“Gould caused Cookeville Corridor to transfer to Eightfold 

all of its membership interests in Cookeville Retail.”), ¶ 40 (“Gould, as managing member 

of Stonemar MM, caused Stonemar Cookeville to approve the transfer by Cookeville 

Corridor.”), ¶ 43 (“Gould, acting on behalf of (i) Stonemar MM as managing member of 

Stonemar Cookeville; and (ii) Cookeville Corridor caused Cookeville Retail to enter into 

[the Amended CRA].”).

111 See DOB at 45–46 (making other arguments). 

112 Compl. ¶¶ 90, 99, 102, 106.

113 Tr. at 38–39. Defendants raised this issue in their Opening Brief, arguing Stonemar 

Cookeville’s “position in this litigation is properly one of neutrality.” DOB at 44. In its 

Answering Brief, 77 Charters attempted to clarify that its claim against “nominal defendant 

Stonemar Cookeville” is based on its status as a “vehicle through which” Stonemar MM 

and Gould “engaged in their wrongful conduct.” PAB at 55–56; Compl. ¶ 99. Giving 

77 Charters all reasonable inferences, I see no basis in law or pled facts to impose a 

fiduciary duty upon Stonemar Cookeville, much less to infer that it breached such duty. 

114 Tr. at 39. Once one accepts the nebulous fiduciary duty framework established in 

USACafes—which is focused on “the individuals” who ultimately “control” an alternative 

entity—it makes little sense for 77 Charters to bring claims against nominal Defendant, 
28

2. The SCA Modifies Default Fiduciary Duties

The next step in the analysis is to decide whether the SCA or the CRA clearly 

and unambiguously modifies or waives the Fiduciary Defendants’ default fiduciary 

duties.115 Because Delaware law recognizes the primacy of contract when 

addressing governance issues in the alternative entity space, 77 Charters may not 

saddle Defendants with common law fiduciary duties if doing so would contradict 

the plain language of the relevant LLC agreement.116 On the other hand, if the parties 

have not unambiguously disavowed common law fiduciary duties, I must look to 

corporate law principles by analogy when determining whether and to what extent 

fiduciary duties are owed.117

Under normal circumstances, one would look to the operating agreement of 

the entity from which the fiduciary duties would naturally flow to determine whether 

 

Stonemar Cookeville. See Lewis v. AimCo Prop., L.P., 2015 WL 557995, at *5 (Del. Ch. 

Feb. 10, 2015) (noting that USACafes is concerned with practical “control” over alternative 

entities). 

115 See Feeley, 62 A.3d at 664 (“Drafters of an LLC agreement must make their intent to 

eliminate fiduciary duties plain and unambiguous.”) (citation omitted). 

116 See 6 Del. C. §§ 18-1101(c), (e); Fisk Ventures LLC, 2008 WL 1961156, at *8 (“In the 

context of [LLCs], which are creatures . . . of contract, those duties or obligations [among 

parties] must be found in the LLC Agreement or some other contract.”); Related Westpac 

LLC v. JER Snowmass LLC, 2010 WL 2929708, at *8 (Del. Ch. July 23, 2010) (“When . . . 

parties . . . cover a particular subject in an express manner, their contractual choice governs 

and cannot be supplanted by the application of inconsistent fiduciary duty principles that 

might otherwise apply as a default.”). 

117 Obeid v. Hogan, 2016 WL 3356851, at *6 (Del. Ch. June 10, 2016).
29

default duties had been modified.

118

 It is not so simple here, however, because 

applying USACafes-type fiduciary duties “puts [fiduciaries] in the situation of 

having potentially conflicting and irreconcilable fiduciary duties.”119 On this record, 

it is unclear whether the Fiduciary Defendants should look to the SCA or the CRA 

as the source of the applicable standard of conduct. 

Stopping short of grappling with whatever cognitive dissonance USACafes 

may engender, at this juncture, it is enough to say second-tier controllers “cannot be 

held liable for breach of fiduciary duty in a situation where the [core fiduciary 

(i.e., Stonemar MM)] because of its compliance with [its contractual fiduciary 

duties], does not owe such liability.”120 In other words, given that Stonemar 

Cookeville and Cookeville Retail are creatures of contract, 77 Charters cannot agree 

contractually to lower Stonemar MM and its affiliates’ standard of care in the SCA 

and then resurrect heightened standards of care for the Fiduciary Defendants based 

 

118 6 Del. C. § 18-1101(c); see, e.g., Bay Ctr., 2009 WL 1124451, at *8.

119 Bay Ctr., 2009 WL 1124451, at *9 n.44 (alteration in original and quotation omitted); 

Gelfman v. Weeden Inv’rs, L.P., 792 A.2d 977, 992 n.24 (Del. Ch. 2001); Feeley, 62 A.3d 

at 671 (observing that the Delaware Supreme Court could reject USACafes by holding “that 

when parties bargain for an entity to serve as the fiduciary, that entity is the fiduciary, and 

the parties cannot later circumvent their agreement by invoking concepts of control or 

aiding and abetting,” but ultimately deferring to USACafes as “stare decisis”). 

120 Gotham P’rs, L.P. v. Hallwood Realty P’rs, L.P., 795 A.2d 1, 34 (Del. Ch. 2001), rev’d 

on other grounds, 817 A.2d 160 (Del. 2002).
30

upon the CRA, an agreement to which 77 Charters and the Fiduciary Defendants are 

not parties.

121

With this in mind, I approach the fiduciary duty analysis in three steps. First, 

I address Defendants’ argument that Section 10.2 of the SCA exempts the Fiduciary 

Defendants from monetary liability.122 Second, I consider whether Section 10.4 of 

the SCA clearly and unambiguously eschews the corporate opportunity doctrine. 

Finally, I review 77 Charters’ effort to require Stonemar MM to share corporate 

opportunities based upon the CRA, even if the SCA waives the corporate 

opportunity doctrine. 

Section 10.2(a) of the SCA exempts any “Person acting in its capacity as a 

Member (including the Managing Member and its Affiliates)” from personal liability 

“to the Company or its members for money damages.”123 As noted, the SCA 

provides that Stonemar MM is both “Member” and “Managing Member” of 

Stonemar Cookeville.124 

 

121 Fisk Ventures LLC, 2008 WL 1961156, at *8; Related Westpac, 2010 WL 2929708, 

at *8.

122 See DOB at 18. 

123 SCA §§ 1.17, 10.2; 6 Del. C. § 10-1101(e) (authorizing such a provision). 

124 SCA (recitals). 
31

Predictably, the parties interpret the scope of Section 10.2’s exculpation

differently. Defendants contend it exempts the Fiduciary Defendants from the threat 

of monetary liability acting in any “capacity.”125 If true, all counts in the 

Complaint—save Count 9—would be barred as each seeks money damages.126 For 

its part, 77 Charters concedes Section 10.2(a) exempts Stonemar MM from the threat 

of monetary damages when acting as a member, but, when wearing its managing 

member hat, 77 Charters argues the SCA does not shield Stonemar MM and its 

affiliates from money damages.

127

Reading the SCA holistically, multiple provisions in the agreement support 

77 Charters’ reading.128 First, the SCA defines Stonemar MM as both a “Member” 

and as the “Managing Member.”129 Second, Section 10.2(b), itself, differentiates 

between Stonemar MM acting as a “Member” and as the “Managing Member” when 

 

125 See DOB at 18–20. 

126 DOB at 18–20 (citing Compl. ¶¶ 69–70, 94).

127 PAB at 18. 

128 See Osborn ex rel. Osborn v. Kemp, 991 A.2d 1153, 1159 (Del. 2010) (holding that 

contracts must be read “as a whole” to “give each provision and term effect, so as not to 

render any part of the contract mere surplusage”) (internal quotation omitted); SCA § 5.1 

(discussing each “Member’s” capital account); SCA § 6.1 (discussing Stonemar MM’s role 

as managing member). 

129 “This . . . Agreement of Stonemar Cookeville Partners . . . is entered into . . . by and 

among Stonemar MM . . . (the ‘Managing Member’) and the other Persons who have 

executed this Agreement . . . (each, a ‘Member.’”. SCA (Recitals). 
32

it describes the circumstances under which parties to the SCA could seek 

indemnification.130 That the SCA’s drafters “knew how” to and, in fact, did 

distinguish between Stonemar MM’s role as a “Member” and as “Managing 

Member” (yet they chose not to in Section 10.2(a)) lends credence to 77 Charters’

proffered interpretation.131 

77 Charters’ interpretation is reasonable. Accordingly, even if Defendants’ 

interpretation is also reasonable (which I do not decide), Section 10.2(a) is not a 

basis to bar the claims in the Complaint, at least not at this stage.132

Turning to the parties’ second dispute, I am satisfied the SCA unambiguously 

eschews the corporate opportunity doctrine.133 The contractual provision most 

directly on point is Section 10.4, captioned “Duties and Conflicts,” where the parties 

acknowledge: 

 

130 SCA § 10.2(b). Generally, Stonemar Cookeville would indemnify its members from 

liability incurred “in connection with” its business. But Stonemar Cookeville would not 

indemnify a member if it were sued by another member—unless a member was suing 

Stonemar MM “in its capacity as the Managing Member.” Id. (emphasis supplied). 

131 Norton v. K-Sea Transp. P’rs L.P., 67 A.3d 354, 360, 364 (Del. 2013) (interpreting a 

contract according to its “plain meaning” when read “as a whole” and declining to infer 

that the challenged language resulted from “sloppy drafting” when the agreement’s drafters 

“knew how to impose an affirmative obligation when they so intended”). 

132 See Appriva S’holder Litig. Co., LLC v. EV3, Inc., 937 A.2d 1275, 1280, 1289 

(Del. 2007) (stating a court, in deciding a Rule 12(b)(6) motion to dismiss, “cannot choose 

between two differing interpretations of ambiguous documents” where “the provisions in 

controversy are reasonably susceptible to different interpretations”). 

133 DOB at 24–26. 
33

the other Members (including the Managing Member [Stonemar 

MM]) and [its] respective Affiliates have or may have other business 

interests [] and investments, some of which may be in conflict or 

competition with the business of the Company . . . . and pursuit of 

such activities, even if competitive with the business of the Company, 

shall not be deemed wrongful or improper.134

77 Charters contends Section 10.4 is vague and not intended to govern 

situations “like the Kimco Interest Sale.”

135 It says the section applies only to 

investments in “other similarly situated shopping centers.”136 On the other hand, 

Defendants argue the provision evidences the parties’ clear and unambiguous choice 

to reject the corporate opportunity doctrine, thereby permitting Cookeville 

Corridor’s acquisition of the Preferred Interest.

137

 

Defendants’ reading of Section 10.4 is the only reasonable interpretation. 

Returning to the plain language of Section 10.4, 77 Charters consented to Stonemar 

MM and its Affiliates having “business interests” and “investments” that are “in 

conflict” or in “competition with the business of” Stonemar Cookeville.138 In turn, 

Section 2.3 states Stonemar Cookeville’s “sole object and purpose” is to “make 

 

134 SCA § 10.4 (emphasis supplied). 

135 PAB at 27.

136 Id.

137 DOB at 24–46. 

138 SCA § 10.4; Scion Breckenridge Managing Member, LLC v. ASB Allegiance Real Estate 

Fund, 68 A.3d 665, 683 (Del. 2013) (observing that, under Delaware law, courts “interpret 

clear and unambiguous contract terms according to their plain meaning”).
34

direct or indirect investments in commercial real estate properties,” particularly “to 

acquire, hold, own and/or dispose of a limited liability company interest in” 

Cookeville Retail.139

The plain import of Section 10.4 is that 77 Charters unambiguously agreed to 

waive the corporate opportunity doctrine. This waiver, when read in conjunction 

with Section 2.3, allows Stonemar MM and its affiliates to “conflict” and “compete” 

with Stonemar Cookeville’s business of investing in commercial real estate, 

including its investment in Cookeville Retail.140 The only reasonable interpretation 

of this provision is that Stonemar MM and its affiliates have no obligation to share 

additional opportunities to invest in Cookeville Retail should such opportunities 

become available.141 

Finally, while not entirely clear from its Answering Brief, 77 Charters

attempts to bypass the SCA and re-animate the corporate opportunity doctrine by 

arguing “Gould and Stonemar MM were required to consider the interests of 

Stonemar Cookeville (and its members) in approving the Kimco Interest Sale, 

pursuant to . . . the CRA.”

142 To support this proposition, 77 Charters cites

 

139 SCA § 2.3. 

140 SCA § 10.4. 

141 SCA § 2.3. 

142 PAB at 21–22, 28, 31. 
35

Section 4.1(d) of the CRA, obligating Stonemar Cookeville to “discharge its duties 

in a good and proper manner . . . as would a prudent manager under similar 

circumstances” and to “take into account the interests of [Cookeville Retail’s]

creditors as well as the interests of its Members [(i.e., Kimco and Stonemar 

Cookeville)].”

143

 

77 Charters’ Frankensteinian effort to reanimate contractually snuffed 

corporate opportunity liability fails for three reasons.144 First, 77 Charters cannot 

use the CRA to resurrect a duty to present corporate opportunities to Stonemar 

Cookeville when 77 Charters unambiguously waived this duty in the SCA.145 

Second, even if I were inclined to read the SCA and the CRA together to determine 

the scope of the Fiduciary Defendants’ “USACafes-type” fiduciary duties, 

Section 10.4 of the SCA specifically and unambiguously disavows the corporate 

opportunity doctrine.

146

 This provision’s “specific language . . . controls over 

general language . . . and where specific and general language conflict, the specific 

 

143 CRA § 4.1(c), (d). 

144 At the outset, I note it is disingenuous for 77 Charters to argue it relied on the CRA’s 

terms since it pleads it had no knowledge of the CRA’s terms until 2016. Compl. ¶ 33.

145 Gotham P’rs, 795 A.2d at 34 (refusing to allow a USACafes-type fiduciary duty claim 

against a second-tier controller where the core fiduciary (in this case Stonemar MM) 

complied with the constitutive agreement to which it was a party). 

146 SCA § 10.4. 
36

provision [] qualifies the meaning of the general one.”147 Third, Section 4.9 of the 

CRA provides that Cookeville Retail’s members and their respective affiliates have 

the right directly and indirectly to compete with Cookeville Retail.

148

 In other words, 

far from bringing corporate opportunities back to life, the CRA, like the SCA, makes 

clear that the corporate opportunity doctrine does not dwell in the realm of Stonemar 

Cookeville’s governance regime.149

*****

Construing both the SCA and the CRA according to their plain meaning, the 

parties unambiguously eschewed the corporate opportunity doctrine while leaving 

other default aspects of the duty of loyalty intact.

150

 And, while the SCA exempts 

 

147 DCV Hldgs., Inc. v. ConAgra, Inc., 889 A.2d 954, 961 (Del. 2005); Ivize of Milwaukee, 

LLC v. Compex Litig. Supp., LLC, 2009 WL 1111179, at *9 (Del. Ch. Apr. 27, 2009) 

(“[W]ell settled rules of contract construction require that, in a conflict between provisions, 

the more specific language should control.”). 

148 CRA § 4.9. 

149 Compare CRA § 4.9 (“each Member, Manager or Affiliate . . . may engage in and 

possess interests in other business ventures . . . including ones in direct or indirect 

competition with the Company.”), with SCA § 10.4. (“Each Member acknowledges that: 

(i) the other Members (including the Managing Member) and their respective 

Affiliates . . . may have other business interests . . . some of which may be in conflict or 

competition with the business of the Company.”). 

150 See Science Accessories Corp. v. Summagraphics Corp., 453 A.2d 957, 963 (Del. 1980) 

(“The doctrine of corporate opportunity is [but] a species of the duty of a fiduciary to act 

with undivided loyalty.”); Skye Mineral Inv’rs, LLC v. Clarity Copper, 2020 WL 881544, 

at *22 (Del. Ch. Feb. 24, 2020) (interpreting similar language to eschew the corporate 

opportunity doctrine while leaving open the possibility that a breach “exceeds the scope of 

behavior the corporate opportunity doctrine prohibits”). 
37

its members from monetary liability, it does not unambiguously exempt 

Stonemar MM and its affiliates from the threat of monetary liability for 

Stonemar MM’s actions as Stonemar Cookeville’s managing member. 

3. 77 Charters Has Well Pled a Narrow Breach of USACafes-type 

Fiduciary Duties Against the Fiduciary Defendants

Having decided the SCA and the CRA leave parts of the duty of loyalty intact, 

I turn next to whether 77 Charters has well pled that the Fiduciary Defendants 

breached their fiduciary duties by engaging in the Wrongful Acts.151 At the outset, 

I note it is reasonably conceivable the Wrongful Acts implicate conduct while 

Stonemar MM was wearing its managing member “hat” since they involve acts only 

the managing member was authorized to take under the SCA.152 Accordingly, 

Section 10.2(a) is not a defense for Stonemar MM or Gould at the pleading stage. 

77 Charters urges the Court to infer the Fiduciary Defendants breached their 

fiduciary duties when Cookeville Corridor acquired the Preferred Interest without

first offering it to 77 Charters.

153

 Here, the relevant question is whether Cookeville 

Corridor’s acquisition of the Preferred Interest was in “conflict” or “competition” 

 

151 Compl. ¶¶ 89–95, 103–09. 

152 See SCA §§ 6.1–6.2 (the managing member “exclusively” exercised “all powers of the 

Company.”); see, e.g., Compl. ¶ 92 (alleging Stonemar MM breached its fiduciary duties 

by “causing Stonemar Cookeville to agree to the Kimco Interest Sale”). 

153 Compl. ¶¶ 93(b)–(c), 106. 
38

with Stonemar Cookeville’s business of holding limited liability company interests 

in Cookeville Retail.154 Literally, the answer must be yes. To the extent Stonemar 

Cookeville was a potential bidder for the Preferred Interest, once Kimco decided to 

sell, the Fiduciary Defendants competed with Stonemar Cookeville when they made 

their bid. 

As already discussed at some length, however, the SCA unambiguously 

forecloses the notion that the Fiduciary Defendants had a common law duty to 

present the Preferred Interest to Stonemar Cookeville before Cookeville Corridor 

acquired it.155 This is true even assuming arguendo that Stonemar Cookeville had 

an interest or expectancy in the Preferred Interest.

156

 Any other reading would 

undermine the purpose of a contractual waiver of the corporate opportunity doctrine 

which applies precisely when an entity has such an interest or expectancy.157 

 

154 SCA §§ 2.3, 10.4. 

155 See CelestialRX, 2017 WL 416990, at *17–18 (interpreting similar language to 

“eschew[] the corporate opportunity doctrine”); Kahn v. Ichan, 1998 WL 832629, at *3 

(Del. Ch. Nov. 12, 1998) (interpreting similar language and holding “where a partnership, 

by virtue of an unambiguous clause in its partnership agreement [] authorizes competition 

with the partnership,” its partners are “on notice that the partners intend to compete directly 

with the partnership”). 

156 See Compl. ¶ 32 (alleging Stonemar Cookeville had an “interest and/or expectancy” to 

purchase the Preferred Interest “pursuant to Article 12” and “section 3.2” of the CRA). 

157 See Broz v. Cellular Info. Sys., Inc., 673 A.2d 148, 154–55 (Del. 1996) (stating the 

corporate opportunity doctrine applies when a fiduciary usurps an opportunity within the 

corporation’s line of business, that the corporation is financially able to exploit, in which 
39

Accordingly, as already stated here, it is not reasonably conceivable that Cookeville 

Corridor’s acquisition of the Preferred Interest, standing alone, constitutes a breach 

of fiduciary duty. 

This, however, does not end the analysis. As Defendants concede, the Kimco

Interest Sale was not a simple “pass through” transaction.158 77 Charters has not just 

alleged Gould acquired the Preferred Interest. Rather, the Complaint alleges, albeit 

obliquely, that Gould acquired the Preferred Interest and then used his total voting 

control over Cookeville Retail to amend the CRA for his own benefit.159 

A reasonable inference that flows from this allegation is that, before the Kimco 

Interest Sale, Gould and 77 Charters’ interests were aligned as non-preferred 

investors in Cookeville Retail.160 But, when Gould acquired the Preferred Interest 

through Cookeville Corridor, he selfishly amended the CRA and shifted economic 

value toward Cookeville Corridor and away from 77 Charters.

161

 For example, 

77 Charters alleges the Amended CRA exempted Gould (and entities under his 

control) from traditional fiduciary duties to a greater extent than the CRA and then 

 

the corporation has an interest or expectancy and, by taking, the fiduciary is placed in a 

position inimicable to his fiduciary duties). 

158 Tr. at 15. 

159 Compl. ¶¶ 93(d), 99–100, 106.

160 Compl. ¶¶ 37–38, 45, 49. 

161 See Compl. ¶¶ 31, 37–39, 46, 49, 93, 106. 
40

provided preferred investors a higher guaranteed return under the waterfall than they 

were entitled to before (12.5% versus 9%).162 

While the scope of USACafes-type liability is limited, “it surely entails the 

duty not to use control over [an entity] to advantage the [controller] at the expense 

of” the controlled-entity.163 Such a circumstance is well pled here, albeit just so. 

The Complaint supports a reasonable inference Gould (i) acquired the Preferred 

Interest, (ii) executed the Amended CRA to increase the Preferred Interest’s 

economic value at 77 Charters’ expense and (iii) sold a slice of the augmented 

 

162 Compl. ¶¶ 49, 51; DOB at 34–35 (conceding “there may have been differences between 

the agreements’ ‘waterfall’ structures”). At this juncture, I note the parties dispute whether 

the standards of care provided in the CRA and the Amended CRA were materially 

different. Compare Amended CRA § 8.1(b) (“The obligations of [Stonemar Cookeville] 

as Managing Member under this agreement are not fiduciary obligations to the extent such 

obligations can be waived under applicable law.”), and Amended CRA § 8.3 

(“[T]he Stonemar Member shall at all times act in good faith . . . [and] carry out all of its 

obligations under this Agreement in accordance with the Standard of Care.”), and 

Amended CRA Schedule C (defining “Standard of Care” to include “the usual and 

customary standard of care, skill, prudence and diligence employed by asset managers in 

accordance with the exercise of sound and prudent business judgment”), and Amended 

CRA § 8.6.5 (“[N]o direct or indirect officer, director, shareholder, partner, employee or 

agent of any Member of the Company shall have any liability of any kind or nature under 

this agreement.”), with CRA § 4.1(c) (requiring Stonemar Cookeville to “discharge its 

duties in a good and proper manner as provided for in this Agreement, as would a prudent 

manager under similar circumstances). I am persuaded it is reasonably conceivable the 

Amended CRA attempted to diminish the Fiduciary Defendants’ standard of care. 

Defendants appear to acknowledge as much by arguing the Amended CRA (but not 

analogous provisions in the CRA) bar 77 Charters’ claims against Gould. See DOB at 46 

(citing Amended CRA § 8.6.5). 

163 See In re USACafes, 600 A.2d at 49; Bay Ctr., 2009 WL 1124451, at *10; Feeley, 

62 A.3d at *672–73 (observing USACafes “has not been extended beyond duty of loyalty 

claims” and holding USACafes duties did not include the duty of care). 
41

Preferred Interest to Eightfold while retaining a piece for himself.164 In a world 

where 1+1 ≠ 3, the fact that Cookeville Corridor purchased the Preferred Interest 

from a third party (Kimco) for $1,995,283 and then, days later, sold less than the full 

Preferred Interest to another third party (Eightfold) for the exact same amount, is 

circumstantial evidence that the Amended CRA enriched the Preferred Interest to 

benefit Cookeville Corridor while harming 77 Charters.

165

 

Defendants make two arguments in response, neither of which is persuasive. 

First, they point to Section 3.3 of the CRA, which authorizes Stonemar Cookeville 

and the holder of the Preferred Interest to amend the CRA and admit new members 

to Cookeville Retail, as a basis to argue the allegedly problematic amendments to 

the CRA were contractually authorized.

166

 Yet it is beyond dispute that “inequitable 

action does not become permissible simply because it is legally possible.”167 The 

contractual authority to amend the CRA does not immunize the Fiduciary 

Defendants from a claim that they did so inequitably. 

 

164 Compl. ¶¶ 37–39, 46. 

165 Compl. ¶¶ 37–38. Defendants, of course, may well demonstrate otherwise with the 

benefit of discovery and a less deferential procedural posture. 

166 DOB at 32–33. 

167 Schnell v. Chris-Craft Indus., Inc., 285 A.2d 437, 439 (Del. 1971). 
42

Second, Defendants contend 77 Charters’ 2007 investment in Jackson Plaza 

was so far underwater by 2018 that 77 Charters could not have been harmed by the 

Amended CRA because, even if the Kimco Interest Sale had never happened, 

77 Charters still would have received nothing for its investment.168 In an effort to 

explain how it has been harmed, 77 Charters alleges Gould was less motivated to 

secure a return for Cookeville Retail’s non-preferred investors (including 

77 Charters) when he sold Jacksonville Plaza because he could look to his slice of 

the Preferred Interest to generate a return.

169

 At this juncture, I must be mindful that

“allegations regarding damages can be pled generally.”

170

 While it is a close call, 

reading the Complaint as a whole and giving 77 Charters the benefit of all reasonable 

inferences, I am satisfied it is reasonably conceivable the Fiduciary Defendants 

amended the CRA in a breach of fiduciary duty and that 77 Charters was damaged 

thereby. 

 

168 DOB at 34–35. Under the waterfall, Defendants contend 77 Charters still would have 

been ~$2 million short of receiving any distributions had the Kimco Interest Sale never 

occurred. See id. at 35. 

169 See Compl. ¶¶ 49, 60–62 (“Gould and Stonemar MM[] did not seek the best price 

available for the sale of Jacksonville Plaza and sought to liquidate solely for purposes of 

obtaining returns for themselves at the expense of the long-term investment potential” for 

the non-preferred investors.). 

170 Horton v. Organogenesis Inc., 2019 WL 3284737, at *4 (Del. Ch. July 22, 2019) 

(quoting In re Ezcorp Inc. Consulting Agmt. Deriv. Litig., 2016 WL 301245, at *30 

(Del. Ch. Jan. 25, 2016)). 
43

For example, it is reasonably conceivable that 77 Charters could prove at trial 

that it was harmed when its non-preferred investment was further-subordinated to 

the Preferred Interest in the Amended CRA. While the parties do not meaningfully 

address the issue, the fact that the Amended CRA bumped up the Preferred Interest’s 

annual returns supports an inference that 77 Charters received diminished 

distributions (and thereby suffered damage) in between 2013 and 2018.

171

 

Accordingly, the Motion must be denied to the extent it seeks dismissal of Counts I 

and III.

4. 77 Charters’ Other Breach of Fiduciary Duty Theories Fail

77 Charters’ excursive narrative of Wrongful Acts appears to be the 

foundation for other alleged fiduciary breaches.172 To begin, 77 Charters suggests 

that even if the Fiduciary Defendants did not breach their fiduciary duties by 

executing the Amended CRA, they still may be found liable for their decision to sell 

the mall as a totally-independent breach of fiduciary duty.

173

 In this regard, 

77 Charters maintains that because “Defendants knew that Stonemar Cookeville 

would not recover any distributions and would lose substantially all of its assets from 

the Jackson Plaza Sale and knew that Cookeville Retail did not engage in a fair 

 

171 Compl. ¶ 49. 

172 Compl. ¶¶ 93(g), 107. 

173 Compl. ¶¶ 93(g), 107; PAB at 50–51. 
44

process or obtain the best available price for the sale of Jackson Plaza, none of the 

Defendants reasonably believed they were acting in the best interests of the 

Stonemar Cookeville [sic] or its members when agreeing to sell Jackson Plaza.”174 

To be clear, 77 Charters cannot build a breach of fiduciary duty claim upon 

the notion that, because a fiduciary decided to liquidate an enterprise at a time when 

residual interest holders would receive nothing, ipso facto or ipso jure, the fiduciary 

breached her duties. Those who manage an enterprise do not “become guarantor[s]

of success.”175 With that canon in mind, I begin the analysis, as I must, with 

reference to the SCA.176 That agreement makes clear, at Section 6.1, that Stonemar 

MM had the exclusive authority to cause Stonemar Cookeville to consent to the

Jackson Plaza Sale without the consent of the members.

177

 Apart from this 

provision, the parties point to nothing in the SCA that would modify Stonemar MM’s 

default fiduciary duties in the sale context. 

 

174 Compl. ¶ 62.

175 Trenwick Am. Litig. Trust v. Ernst & Young, L.L.P., 2006 WL 4782378, at *3 (Del. Ch. 

Aug. 10, 2006). 

176 Douzinas, 888 A.2d at 1149–50.

177 SCA § 6.1. (“The business and affairs of the Company shall be managed by and under 

the exclusive direction of the Managing Member and all powers of the Company may be 

exercised exclusively by the Managing Member.”); see also SCA § 6.2. 
45

Even if I were to review the decision to sell the mall to an arms-length thirdparty buyer with enhanced scrutiny (a proposition 77 Charters vaguely advances but 

I do not embrace), “[I] [would] not substitute [my] business judgment for that of 

[Stonemar MM], but [instead] [would] determine if [Stonemar MM’s] decision was, 

on balance, within a range of reasonableness.”178 Assuming, arguendo, this is the 

correct standard of review, 77 Charters has not pled the factual predicates to support 

a breach of fiduciary duty claim when considering the Jackson Plaza Sale in 

isolation.179 First, the Complaint feebly asserts “the documents executed for the 

Jackson Plaza Sale did not include a fiduciary-out or go-shop provision.”180 

77 Charters cites no cases requiring fiduciaries to take these steps as a matter of 

law.181 More to the point, the Complaint lacks any factual allegations concerning 

 

178 Paramount Comm. Inc. v. QVC Network, Inc., 637 A.2d 34, 45 (Del. 1994); 

In re Cogent, Inc. S’holders Litig., 7 A.3d 487, 487 (Del. Ch. 2010) (holding that when a 

fiduciary decides to sell a company, she incurs a duty to “pursue the best transaction 

reasonably available”). 

179 In its Answering Brief, 77 Charters invents an allegation that the Fiduciary Defendants

were motivated to sell because they wanted to avoid a “zombie company” situation where 

“the entity is profitable” but “growth opportunities and prospects for exit are not high 

enough to generate . . . return[s].” PAB at 51. The problem with this theory is that it is not 

pled in the Complaint. As such, I do not address it.

180 Compl. ¶ 60. 

181 Barkan v. Amsted Indus., Inc., 567 A.2d 1279, 1286 (Del. 1989) (“[T]here is no single 

blueprint that a board must follow to fulfill its duties.”). 
46

Jackson Plaza’s true value, much less allegations that a “better” process would have 

yielded more for the mall property.182

Second, 77 Charters argues the Jackson Plaza Sale was a self-dealing 

transaction for Gould since the transaction released his personal guarantee on the 

Loan.183 Yet 77 Charters has not pled Gould faced any threat of having to make 

good on his guarantee.184 To the contrary, Gould’s guarantee obligations were 

triggered only if he committed certain bad acts such as fraud, waste or failure to pay 

taxes, and 77 Charters has not alleged that any of these triggers occurred.

185

 This is 

 

182 Compl. ¶¶ 63–64 (Jackson Plaza sold for $24,926,263 in September 2018.); 

In re Cogent, 7 A.3d at 497 (rejecting bald allegations that the purchase price obtained for 

an asset was “too low” as adequate support for a breach of fiduciary duty claim). This is 

not to say 77 Charters cannot prove the mall was worth more than it sold for as a basis to 

support damages for its other breach claims. The holding here is that it has not well pled a 

separate breach of fiduciary claim arising from the sale of the mall alone. Stated 

differently, 77 Charters may be able to use evidence that Gould sold Jackson Plaza for too 

little to prove that it suffered damages when the CRA was amended even though it has not 

well pled that the Jackson Plaza Sale was an independent, substantive wrong. 

183 Compl. ¶ 65. 

184 Cf. Revlon, Inc. v. McAndrews & Forbes Hldgs., Inc., 506 A.2d 173, 182 (Del. 1986) 

(noting directors were “aware” of “subsequent threats of suit” against them that were 

extinguished by a transaction into which they steered their company). 

185 Transmittal Aff. of John A. Sensing (D.I. 27) Ex. 1, ¶ 1. In re Morton’s Rest. Gp., Inc. 

S’holders Litig., 74 A.3d 656, 658–59 n.3–4 (Del. Ch. 2013) (noting the Court may 

consider documents incorporated by reference in the Complaint when deciding a motion 

to dismiss). 
47

no surprise as the Complaint alleges Jackson Plaza sold for millions more than the 

outstanding principal balance on the Loan.186

This court has dismissed breach of fiduciary duty claims at the pleading stage 

where a fiduciary received a “side-deal” in a M&A transaction—not available to 

stockholders generally—but the fiduciary’s personal benefit was a “reasonable 

condition[]” for the transaction.187 Here, Gould’s personal guarantees were released 

simply because Cookeville Retail’s lenders had to be paid off when Jackson Plaza 

sold.188 Under such circumstances, it is not reasonable to infer Gould “extracted” a 

personal benefit “at the expense” of Cookeville Retail.189 The Jackson Plaza Sale, 

therefore, cannot form the basis for a standalone breach of fiduciary duty as the 

Complaint lacks the factual predicates for such a claim.

In yet another attempt to state a viable breach of fiduciary duty claim, 

77 Charters makes a string of allegations that, if anything, would be breach of 

contract claims, not claims for breach of fiduciary duty. In this regard, 77 Charters

alleges the Fiduciary Defendants caused Stonemar Cookeville to “agree to improper 

 

186 See Compl. ¶ 64 (alleging $4,768,045 was left over “after satisfaction” of the Loan and 

closing costs). 

187 Kahn v. Stern, 2017 WL 3701611, at *12–13 (Del. Ch. Aug. 28, 2017). 

188 Compl. ¶ 64. 

189 Kahn, 2017 WL 3701611, at *12. 
48

distribution of proceeds from the sale of Jackson Plaza” and “enter into the 

Management and Leasing Agreements” which were not “arms’ length transactions 

and were not entirely fair” to the company.190 

To the extent these factual predicates support cognizable legal claims, they 

are breach of contract claims. “When, as the parties here did, they cover a particular 

subject in an express manner, their contractual choice governs and cannot be 

supplanted by the application of inconsistent fiduciary duty principles.”191 The SCA 

and the CRA expressly and specifically address distributions as well as the 

Management Agreement.192 If 77 Charters believes the Fiduciary Defendants were 

Remainder of Page Intentionally Left Blank

 

190 Compl. ¶ 93(a), (g). 

191 Related Westpac, 2010 WL 2929708, at *8. 

192 See CRA § 4.7 (incorporating the “Property Management Agreement” which entitled 

Stonemar Realty to “receive a monthly asset management fee equal to the difference 

between 4% of collected rents, less the monthly management fee.”); CRA Article 8 

(discussing “Distributions”); SCA Article VII (same). 
49

paid too much under the Management Agreement or received more than their fair 

share of distributions, its rights and remedies are solely contractual.

193

 Yet it has 

not asserted that claim, and it is too late to do so now.194

The remaining “Wrongful Acts” recited in the Complaint read more like a 

punch list of grievances than factual predicates for viable legal claims. For example, 

paragraph 30 insinuates Kimco’s capital contributions may have been used for some 

purpose other than improvements to Jackson Plaza.195 Yet 77 Charters pulls back 

from pleading a claim to this effect, purportedly because it is “without sufficient 

 

193 Related Westpac LLC, 2010 WL 2929708, at *8. 77 Charters seems to acknowledge 

this in the Complaint where it alleges, “[t]he payment and other terms of the Management 

and Leasing Agreements breach the express requirements of Sections 4.5, 4.7 and 4.9 of 

the [CRA].” See Compl. ¶ 23. Yet, mysteriously, 77 Charters omits a formal breach of 

contract claim for breach of these provisions in the Complaint. See Compl. ¶¶ 144–52 

(alleging breach of contract on other grounds). In this regard, it is necessary to address the 

jumble that is paragraph 151 of the Complaint. Paragraph 151 comprises part of the 

mislabeled Count X for “Breach of Contract against Cookeville Corridor and Eightfold.” 

Compl. ¶¶ 114, 151. Notwithstanding that 77 Charters elected not to name Stonemar MM 

as a defendant in this count, paragraph 151 alleges “Stonemar MM caused Stonemar 

Cookeville and Cookeville Retail to” breach the CRA by “agree[ing] to terms of payment” 

in the Management Agreement that exceeded “what was permitted in” the CRA. Compl. 

¶ 151. Even if I were inclined to find that Stonemar MM was somehow on notice that 

Count X was pointed in its direction, Count X would fail against Stonemar MM for the 

same reason it fails against the other Count X Defendants. As discussed above, and in 

more detail below, Stonemar MM was not a party to the CRA. See CRA (recitals). 

194 Ct. Ch. R. 15(aaa).

195 Compl. ¶¶ 30, 93(e), (i). 
50

information to determine” whether any Defendant actually misallocated funds.196 

Similarly, 77 Charters finds it suspicious that the Loan’s principal balance was not 

paid down after it was extended in 2007.197 But it acknowledges that “more 

information is needed to determine whether Defendants engaged in any improper 

conduct with respect to the Jackson Plaza Loan.”198 

These portions of the Complaint fail to put Defendants “on notice of the claim 

brought against [them].”199 Indeed, these are not claims at all; they are insinuations 

followed by veiled requests for information. As such, while some portions of the 

Complaint have stated viable claims, 77 Charters has not well pled any cause of 

action arising out of the Loan, the Management Agreement, capital distributions 

after the Jackson Plaza Sale or the use to which Gould put 77 Charters’ capital 

contributions. 

 

196 Comp. ¶ 30; see also Compl. ¶ 67 (“an accounting is necessary to determine the amount 

of proceeds from the Jackson Plaza Sale should be made available [sic] to the general 

equity members of Stonemar Cookeville.”).

197 Compl. ¶¶ 72, 93(e), (i). 

198 Compl. ¶¶ 72–73. 

199 Doe v. Cahill, 884 A.2d 451, 458 (Del. 2005) (emphasis supplied); Kuroda v. SPJS 

Hldgs., L.L.C., 971 A.2d 872, 885 (Del. Ch. 2009) (“The Court is not required to accept 

mere conclusory allegations as true.”).
51

*****

The determination that 77 Charters has stated a viable, albeit narrow, claim 

against the Fiduciary Defendants based upon the self-dealing aspects of the 

Amended CRA has the following implications:

 Counts IV, V and XI for aiding and abetting breach of fiduciary duty 

and civil conspiracy must be dismissed as to the Fiduciary 

Defendants.

200

 

 Count VII for breach of the implied covenant of good faith and fair 

dealing (the “implied covenant”) must be dismissed as to 

Stonemar MM.201

 Given that 77 Charters’ breach of fiduciary duty claim based on the 

Amended CRA will proceed, the Motion must be denied to the extent 

 

200 See Compl. ¶¶ 110–20, 154–60; CMS Inv. Hldgs., LLC v. Castle, 2015 WL 3894021, 

at *22 n.123 (Del. Ch. June 23, 2015) (“Delaware law generally does not permit a claim 

against a fiduciary for aiding and abetting a breach of fiduciary duties, because liability in 

such a situation would be primary (i.e., an actual breach of fiduciary duty).”); OptimisCorp 

v. Waite, 2015 WL 5147038, at *57 (Del. Ch. Aug. 26, 2015) (“In the fiduciary duty 

context, conspiracy is treated essentially as coterminous with aiding and abetting. It would 

make little sense, therefore, particularly given the vicarious liability that attaches to 

conspiracy, for a lower standard to apply to conspiracy than aiding and abetting. In those 

instances where a fiduciary takes actions that would amount to aiding and abetting by a 

non-fiduciary, that conduct amounts to a direct breach of fiduciary duties. Presumably, the 

same would be true of a conspiracy: an actor’s entry into a conspiracy to facilitate another 

actor’s breach of fiduciary duty to an entity to which the first actor owed a fiduciary would 

itself be a breach of the first actor’s fiduciary duties.”). 

201 See Ross v. Institutional Longevity Assets LLC, 2019 WL 960212, at *6 (Del. Ch. 

Feb. 26, 2019) (“To allow a fiduciary duty claim to coexist in parallel with an implied 

contractual claim, would undermine the primacy of contract law over fiduciary law.”). 
52

it seeks dismissal of the mislabeled Count IX—asking the Court to 

invalidate the Amended CRA.

202

77 Charters Has Not Well Pled Breach of Contract or Implied Covenant 

Claims (Counts VII and X)

In Counts VII and X, 77 Charters brings breach of contract and implied 

covenant claims against Cookeville Corridor and Eightfold based on alleged 

breaches of the CRA and the SCA.

203

 Under Delaware law, “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.”204 

The construction of a contract is a question of law, and Defendants have no 

right to dismissal under Rule 12(b)(6) unless “the interpretation of the contract on 

which their theory of the case rests is the only reasonable construction as a matter of 

law.”205 If there is more than one “reasonable construction” of contractual language, 

 

202 See Compl. ¶¶ 140–43. Southpaw Credit Opportunity Master Fund, L.P. v. Roma Rest. 

Hldgs., Inc., 2018 WL 658734, at *5 (Del. Ch. Feb. 1, 2018) (stating that “a corporate 

action taken in violation of equitable principles is voidable”) (quotation omitted). 

203 See Compl. ¶¶ 127–32, 153–60. As noted above, Count VII is dismissed as to Stonemar 

MM in light of my finding that 77 Charters has well pled a breach of fiduciary duty claim 

against it based on the Wrongful Acts. See Ross, 2019 WL 960212, at *6 (disallowing a 

fiduciary duty claim to proceed in parallel with an implied covenant claim based on the 

same wrongful acts). 

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

205 CSH Theatres, LLC, 2015 WL 1839684, at *8. 
53

then the contract is ambiguous, and Defendants’ Motion cannot be granted.206 Of 

course, “[a] contract is not rendered ambiguous simply because the parties do not 

agree upon its proper construction.”207 Instead, the court determines whether 

ambiguity exists by applying standard canons of contract interpretation.

208

Before 77 Charters even gets in the starting blocks for its contract-based 

claims, it must contend with the fact that neither Cookeville Corridor nor Eightfold 

were parties to the CRA or the SCA.

209

 “Delaware does not recognize breach of 

contract claims against non-parties to the contract.”210 The same is true for implied 

covenant claims.211 77 Charters attempts to escape this shortcoming by pleading 

“Cookeville Corridor and Eightfold . . . became parties to [the CRA] pursuant to 

section 3.2(a)(iv) upon the transfer of Kimco’s interest in Cookeville Retail to 

Cookeville Corridor.”212

 

206 Id., at *8. 

207 Rhone-Poulenc Basic Chems. Co. v. Am. Motorists Ins. Co., 616 A.2d 1192, 1196 

(Del. 1992). 

208 CSH Theatres, 2015 WL 1839684, at *8. 

209 See SCA (recitals); CRA (recitals).

210 Mesirov v. Enbridge Energy Co., Inc., 2018 WL 4182204, at *10 (Del. Ch. Aug. 29, 

2018). 

211 See Skye Mineral, 2020 WL 881544, at *17. 

212 Compl. ¶ 145. 
54

Section 3.2(a)(iv) provides, in relevant part 

A person to whom a Membership Interest is Transferred may be 

admitted to the Company as a member only with the consent of the 

other Member . . . In connection with any Transfer . . . and any 

admission of an assignee of a Membership Interest . . . the Member 

making such transfer and the assignee shall furnish the other Member 

with such documents regarding the Transfer as the other Member may 

request . . . including a copy of the Transfer instrument [or] a 

ratification or joinder by the assignee of this Agreement.213

Based on this language, I gather 77 Charters’ theory is that Cookeville Corridor and 

Eightfold became members of Cookeville Retail not by virtue of their execution of 

the Amended CRA, but through execution of a “joinder agreement” to the CRA and 

then subsequent execution of the Amended CRA.

214

 

For their part, Defendants point to Section 3.3 of the CRA, which allows new 

members to be admitted to Cookeville Retail as members and their “admission” to 

be “reflect[ed] . . . in an amendment to this Agreement.”215 Based on this provision, 

Defendants contend it is not automatic that Cookeville Corridor and Eightfold would 

have to join the CRA to become members of Cookeville Retail.216

 

213 CRA § 3.2(a)(iv) (emphasis supplied). 

214 Compl. ¶¶ 43, 145.

215 CRA § 3.3; DOB at 60. 

216 DOB at 60–61. 
55

77 Charters’ interpretation is not reasonably conceivable.217 The Amended 

CRA, which 77 Charters incorporates into the Complaint, clearly states “[a]s of the 

Effective Date, each of [Eightfold] and [Cookeville Corridor] are hereby admitted 

as a Member” of Cookeville Retail.218 It is not reasonable, therefore, to infer these 

entities were already Cookeville Retail members by virtue of a joinder agreement. 

As Eightfold and Cookeville Corridor were never parties to the CRA or the SCA, 

Counts VII and X must be dismissed as to these Defendants.

77 Charters Has Not Well Pled Unjust Enrichment (Count VI)

In Count VI, 77 Charters brings an unjust enrichment claim against Gould, 

Stonemar MM, Cookeville Corridor and Eightfold, alleging these Defendants were 

unjustly enriched by the Wrongful Acts.219 “The elements of unjust enrichment are 

(i) an enrichment, (ii) an impoverishment, (iii) a relation between the enrichment 

and impoverishment, (iv) the absence of justification, and (v) the absence of a 

remedy provided by law.”220 

 

217 See Compl. ¶ 49 (discussing the Amended CRA); Amended CRA § 1.2. 

218 See Compl. ¶ 43; Amended CRA § 1.2. 

219 Compl. ¶¶ 121–26. 

220 Bakerman v. Sidney Frank Importing Co., Inc., 2006 WL 3927242, at *18 (Del. Ch. 

Oct. 10, 2006). 
56

The unjust enrichment theory was originally developed “as a theory of 

recovery to remedy the absence of a formal contract.”221 Accordingly, courts have 

appropriately resisted attempts to bring unjust enrichment claims when, as here, “the 

complaint alleges an express, enforceable contract [] controls the parties’ 

relationship . . . even when the enforceable contract gives rise to a fiduciary 

relationship between the parties.”222 This is especially true in the alternative entity 

context where parties have agreed to an operating agreement to “govern the parties’ 

rights.”

223

 

Given that 77 Charters has not alleged that the “validity” of the CRA or the 

SCA is “in doubt or uncertain,” there is no role for an unjust enrichment claim.224 

Here, 77 Charters has pled Stonemar MM, Stonemar Cookeville, Cookeville Retail,

Cookeville Corridor and Eightfold all “had a valid contractual agreement in the form 

 

221 Id.

222 Id.

223 Related Westpac, 2010 WL 2929708, at *7. Perhaps as an acknowledgment of this 

barrier to Count VI, 77 Charters purports to bring Count VI in the alternative to “fiduciary 

principles.” Compl. ¶ 126. 

224 Bakerman, 2006 WL 3927242, at *18. 
57

of” the CRA and the SCA.225 77 Charters cannot “bypass” these agreements with 

an unjust enrichment claim.226 Count VI, therefore, must be dismissed.227

77 Charters Has Not Well Pled Aiding and Abetting or Civil Conspiracy 

Claims against Eightfold (Counts IV and V)

In Count IV, 77 Charters alleges aiding and abetting breach of fiduciary duty 

against Eightfold.228 To state a claim of aiding and abetting, a plaintiff must plead 

facts in support of four elements: (1) the existence of a fiduciary relationship, 

(2) a breach of a fiduciary duty, (3) defendant’s knowing participation in that breach 

and (4) damages proximately caused by the breach.229 I addressed the first two 

elements in my previous findings that the Complaint states a reasonably conceivable 

claim of breach of fiduciary duty against the Fiduciary Defendants. As is often the 

case in aiding and abetting litigation, given the Court’s finding that 77 Charters has 

 

225 Compl. ¶¶ 128–29. 

226 Related Westpac, 2010 WL 2929708, at *7. Even though Gould is not a party to the 

SCA or CRA, this court has resisted efforts to “bypass” an operating agreement by bringing 

unjust enrichment claims against the owners of an entity that was a party to the relevant 

operating agreement. See id. 

227 This conclusion applies with even greater force for Eightfold because, even 

though Eightfold was not a party to the CRA, for reasons noted elsewhere in this 

Opinion, 77 Charters has not well pled Eightfold engaged in any unjust or 

inequitable behavior whatsoever. See Cantor Fitzgerald, L.P. v. Cantor, 724 A.2d 571, 

585 (Del. Ch. 1998) (stating a claim for unjust enrichment requires an “unjust retention” 

of a benefit) (emphasis supplied). 

228 Compl. ¶¶ 110–17. Count IV as to Gould is addressed elsewhere in this Opinion. 

229 Malpiede v. Townson, 780 A.2d 1075, 1096 (Del. 2001). 
58

pled breach claims, the parties focus their arguments on whether 77 Charters has

adequately pled “knowing participation” by the alleged aiders and abettors.230

An adequate pleading of “knowing participation” requires the plaintiff to well 

plead scienter.231 “To establish scienter, the plaintiff must demonstrate that the aider 

and abettor had actual or constructive knowledge that their conduct was legally 

improper,” and that he acted with “an illicit state of mind.”232 “This Court has 

consistently held that ‘evidence of arm’s-length negotiation with fiduciaries negates 

a claim of aiding and abetting, because such evidence precludes a showing that the 

defendants knowingly participated in the breach by the fiduciaries.’”233 “[T]he 

requirement that the aider and abettor act with scienter makes an aiding and abetting 

claim among the most difficult to [plead and] prove.”234 

 

230 See DOB at 48–49.

231 See RBC Capital Mkts., LLC v. Jervis, 129 A.3d 816, 861–62 (Del. 2015) (quoting 

Malpiede, 780 A.2d at 1097).

232 Id. at 862 (internal quotation omitted).

233 In re NYMEX S’holder Litig., 2009 WL 3206051, at *13 n.116 (Del. Ch. Sept. 30, 2009) 

(quoting In re Frederick’s of Hollywood, Inc. S’holders Litig., 1998 WL 398244, at *3 n.8 

(Del. Ch. July 9, 1998) and citing In re Shoe-Town, Inc. S’holders Litig., 1990 WL 13475, 

at *8 (Del. Ch. Feb. 12, 1990)). 

234 RBC Capital Mkts., 129 A.3d at 862 (citing cases). 
59

Nothing in the Complaint suggests Eightfold was anything other than an 

arm’s-length, third-party purchaser of the Eightfold Interest.235 77 Charters’

conclusory assertion that Eightfold was “involved” or “aware” of the CRA or the 

SCA does not suggest “complicity of any kind . . . let alone ‘knowing participation’ 

by [defendant] in a breach of fiduciary duty . . . .”236 Nothing in the Complaint 

supports an inference Eightfold acted to “create or exploit conflicts of interest” or 

“agree[]” with the Fiduciary Defendants that they would breach their fiduciary duties 

by executing the Amended CRA to harm 77 Charters.

237

 By itself, being a 

counterparty to a transaction with a fiduciary does not an aiding and abetting claim 

make. 

77 Charters attempts to salvage an inference of knowing participation by 

pointing to what it describes as the “suspicious ... timing and terms” of the Amended 

CRA.238 I struggle to follow this logic. Against the backdrop of Eightfold’s 

 

235 See Compl. ¶ 11 (Eightfold is not affiliated with any other Defendant), ¶ 38 (Eightfold 

acquired the Preferred Interest from Cookeville Corridor). 

236 In re Frederick’s, 1998 WL 398244, at *4. 

237 Malpiede, 780 A.2d at 1097–98.

238 PAB at 61. 77 Charters relies on Microsoft Corp. v. Amphus, Inc., 2013 WL 5899003, 

at *14–15 (Del. Ch. Oct. 31, 2013), for the proposition that “[t]he knowledge element of 

an aiding and abetting or conspiracy claim can be satisfied, in certain instances, by 

participation in a transaction with suspicious terms and timing.” PAB at 61. Whatever this 

generalized statement may mean, Microsoft is distinguishable. In that case, a fiduciary 

“deliberately played down” the value of intellectual property so that he could acquire it for 

himself and immediately sell it to a third party. The court held Microsoft had well pled an 

aiding and abetting claim against the third-party purchaser where it had “commenced 
60

substantive right to negotiate terms that benefit itself, I see nothing in the Complaint 

supporting an inference Eightfold knew it was “advocat[ing]” for or “assist[ing]” the 

Fiduciary Defendants’ breach of fiduciary duty.239 I also struggle to see any cause 

for suspicion in the timing of the Jacksonville Plaza Sale, which occurred five years 

after the Kimco Interest Sale.240 Count IV must be dismissed to the extent it is 

brought against Eightfold. 

In similar fashion, 77 Charters brings a civil conspiracy claim against 

Eightfold in Count V based upon the same allegedly wrongful conduct.241 Count V, 

as pled, is functionally the same as 77 Charters’ aiding and abetting claim.242 

“The elements for civil conspiracy under Delaware law are: (1) a confederation or 

 

patent litigation” to help the fiduciary extract the intellectual property, “conducted 

meaningful due diligence” into the fiduciary’s acquisition of the intellectual property and 

“knew” the fiduciary had acquired the intellectual property for inadequate consideration. 

Id. In contrast, 77 Charters’ generalized allegation that “Eightfold was involved” in the 

Kimco Interest Sale fails to support an inference of knowing participation. Compl. ¶ 23. 

239 Malpiede, 780 A.2d at 1097. 

240 See Compl. ¶ 31 (The Kimco Interest Sale occurred on July 1, 2013.), ¶ 57 (The Jackson 

Plaza Sale occurred on June 27, 2018.). 

241 See Compl. ¶¶ 118–20. 

242 See Allied Capital Corp. v. GC-Sun Hldgs., L.P., 910 A.2d 1020, 1039 (Del. Ch. 2006) 

(recognizing the “functional identity” of the two claims). 
61

combination of two or more person; (2) an unlawful act done in furtherance of the 

conspiracy; and (3) actual damage.”243

For the same reasons discussed above, the Complaint lacks any substantive 

allegation regarding Eightfold’s conduct sufficient to support a reasonable inference 

that it formed a combination with another Defendant or committed an unlawful act 

in furtherance of a conspiracy. Count V must be dismissed to the extent it is brought 

against Eightfold.

77 Charters Has Not Well Pled Tortious Interference with Business 

Relation (Count VIII)

In Count VIII, 77 Charters brings a claim against Gould, Cookeville Corridor 

and Eightfold for tortious interference with business relationship.244 The factual 

predicate for this claim is Stonemar Cookeville’s alleged “reasonable business 

opportunity to have it or its members purchase” the Preferred Interest and its interest 

in “continued ownership of Jackson Plaza.”245 “To survive dismissal, a claim for 

tortious interference with business relations must allege: ‘(a) the reasonable 

probability of a business opportunity, (b) the intentional interference by defendant 

 

243 AeroGlobal Capital Mgmt., LLC v. Cirrus Indus., Inc., 871 A.2d 428, 437 n.8 

(Del. 2005). 

244 Compl. ¶¶ 133–39. 

245 Compl. ¶¶ 134–36. 
62

with that opportunity, (c) proximate causation, and (d) damages.’”246 Such claims 

must be “considered in light of a defendant’s privilege to compete or protect his 

business interests in a fair and lawful manner.”

247 In other words, competition is not 

tortious unless it is in some way “wrongful.”248

Here, 77 Charters has not well pled it had a reasonable probability of a 

business opportunity in either the Preferred Interest or perpetual ownership of 

Jackson Plaza.249 As noted, both the CRA and the SCA unambiguously allow 

Stonemar Cookeville and Cookeville Retail’s members to compete with each 

company’s business.

250

 It is, therefore, not reasonably conceivable that buying and 

selling the Preferred Interest, alone, was in some way wrongful. Similarly, 

77 Charters has not well pled it had a reasonable expectation in “continued 

 

246 Malpiede, 780 A.2d at 1099 (quoting DeBonaventura v. Nationwide Mut. Ins. Co., 

428 A.2d 1151, 1153 (Del. 1981), aff’d, 428 A.2d 1151 (Del. 1981)). 

247 DeBonaventura, 419 A.2d at 947; Orthopaedic Assocs. of Southern Del., P.A. v. Pfaff, 

2018 WL 922020, at *2 (Del. Super. Ct. Feb. 9, 2018). 

248 DeBonaventura, 419 A.2d at 947; Orthopaedic Assocs., 2018 WL 922020, at *2. 

249 Count VIII also fails to state a claim for the independent reason that 77 Charters has not 

well pled it was “prepared to enter into a business relationship.” See Organovo Hldgs., 

Inc. v. Dimitrov, 162 A.3d 102, 122 (Del. Ch. 2017). 

250 SCA § 10.4; CRA § 4.9. 
63

ownership” of Jackson Plaza as the CRA specifically contemplated a potential sale 

of the mall.

251

 For these reasons, Count VIII must be dismissed. 

77 Charters Has Stated a Viable Civil Conspiracy Claim Against 

Cookeville Corridor (Count V)

In Count V, 77 Charters asserts a civil conspiracy claim against Cookeville 

Corridor based on its alleged conspiracy with Gould and Stonemar MM “to commit 

the Wrongful Acts.”252 Civil conspiracy is “not an independent cause of action” and, 

as such, the gravamen “of an action in civil conspiracy is not the conspiracy itself 

but the underlying wrong which would be actionable absent the conspiracy.”253 

As noted, “[t]he elements for civil conspiracy under Delaware law are: 

(1) a confederation or combination of two or more person; (2) an unlawful act done 

in furtherance of the conspiracy; and (3) actual damage.”254

To repeat, nothing about Cookeville Corridor’s acquisition of the Preferred 

Interest, by itself, could constitute an independent “Wrongful Act.” On the other 

 

251 Compl. ¶ 135; CRA § 4.1(b)(1) (providing a mechanism by which Stonemar Cookeville 

and Kimco could approve the sale of the property); SCA § 2.3 (recognizing that the purpose 

of Stonemar Cookeville is to invest and sell property); CRA § 2.5 (same). 

252 Compl. ¶¶ 118–20. I address Count V as to Eightfold, Stonemar MM and Gould 

elsewhere in this Opinion. 

253 Kuroda, 971 A.2d at 892; Anderson v. Airco, Inc., 2004 WL 2827887, at *3 (Del. Super. 

Ct. Nov. 30, 2004). 

254 AeroGlobal, 871 A.2d at 437 n.8; Anderson, 2004 WL 2827887, at *3.
64

hand, I have found it reasonably conceivable that Gould and Stonemar MM breached 

their fiduciary duties by amending the CRA in a self-dealing transaction. This 

independent breach of fiduciary duty could support a civil conspiracy claim.255 

As for the first element, 77 Charters has pled Cookeville Corridor is a whollyowned entity Gould used to amend the CRA.

256

 While neither party addresses this 

issue in its briefs, nothing in Delaware law bars a claim that a corporate parent 

conspired with a wholly-owned subsidiary to commit a wrongful act.257 Given that 

“the knowledge and actions of a corporation’s human decision-makers and agents 

may be imputed to it,” the Complaint supports a reasonable inference Gould and 

Cookeville Corridor agreed wrongfully to execute the Amended CRA.258 

 

255 See OptimisCorp, 2015 WL 5147038, at *56 (“[B]reach of fiduciary duty . . . can form 

the basis of a civil conspiracy.”). 

256 Compl. ¶¶ 10, 43.

257 See Allied Capital, 910 A.2d at 1044. In Allied Capital, then-Vice Chancellor Strine 

rejected the notion “that a parent and its subsidiary cannot conspire with one another 

because they don’t possess two separate corporate consciousnesses (i.e., that they have but 

one mind) and are thus incapable of agreement.” Id. Instead, he held, “[t]he fact that a 

corporation owns all of the equity of another corporation and that both corporations have 

the same directors and officers does not mean the separate corporations cannot collaborate 

on a common illegal scheme. It is precisely because the corporations have, as a 

presumptive matter, a separate legal existence irrespective of their common control, that 

doctrines like conspiracy and aiding and abetting may have a policy purpose.” Id.; see also 

Skye Mineral, 2020 WL 881544, at *10–11 (discussing Allied Capital). 

258 In re Dole Food Co., Inc. S’holder Litig., 110 A.3d 1257, 1262 (Del. Ch. 2015); Stone 

& Paper Inv’rs, LLC v. Blanch, 2019 WL 2374005, at *7 (Del. Ch. May 31, 2019) (“In the 

case of an entity, an individual defendant’s knowledge must be attributed to the entities he 

controlled and used to effectuate his breaches of duty.”) (internal quotation omitted). 
65

The same result follows for the second element—an unlawful act in 

furtherance of the conspiracy. 77 Charters pleads Cookeville Corridor acted to 

amend the CRA.259 Given that 77 Charters has well pled a breach of fiduciary duty 

against Gould and Stonemar MM based upon self-dealing aspects of that agreement, 

it is reasonably conceivable that Cookeville Corridor committed an unlawful act in 

furtherance of the conspiracy. Finally, I have found 77 Charters has well pled it was 

damaged by the Amended CRA based upon Cookeville Corridor’s enhanced rights 

vis-à-vis Cookeville Retail’s non-preferred investors. The Motion to Dismiss 

Count V, therefore, must be denied as to Cookeville Corridor. 

III. CONCLUSION

For the foregoing reasons, Defendants’ Motion to Dismiss is GRANTED in 

part and DENIED in part. Defendants’ Motion to Dismiss Counts II, IV, VI–VIII 

and X–XI is GRANTED. Defendants’ Motion to Dismiss Counts I, III and the mislabeled Count IX (seeking declaratory judgment) is DENIED. As for Count V, 

Defendants’ Motion to Dismiss is GRANTED as to Eightfold, Gould and 

Stonemar MM but DENIED as to Cookeville Corridor.

IT IS SO ORDERED. 

 

259 Compl. ¶¶ 43–49.