Opinion ID: 779915
Heading Depth: 3
Heading Rank: 7

Heading: The Letter to the New York State Department of Law

Text: 82 Shortly after the bankruptcy hearing described above, RCPI wrote to the New York State Department of Law on May 22, 1996, primarily for the purpose of requesting that a no-action letter received in 1988 would remain valid as to the upcoming transfer of title to GE/NBC pursuant to the sale. The Shareholders highlight one line in the May 22 letter: [The Partnerships have] filed for protection under the federal bankruptcy code and the proposed plan of reorganization contemplates that the Partnerships shall transfer fee title to certain units (including its reversionary rights) to NBC, and transfer fee title to all remaining units then owned by [the Partnerships] to RCPI. App. at 00990. Because the Partnerships filed their Second Amended Reorganization Plan on February 8, 1996, and because the May 22 letter states that that plan contemplates the transfer to NBC, the Shareholders conclude that sale negotiations must have been underway at least as early as February 8, 1996. 83 Again, the Shareholders have taken this statement out of context, resulting in a tortuous misinterpretation. Most importantly, the Shareholders' interpretation contradicts their discussion of the bankruptcy proceedings above, in which the Shareholders concede that the first time that the issue of the GE/NBC sale arose in the bankruptcy court was at the May 6, 1996 hearing. Therefore, it would have been impossible for the February 8, 1996 plan of reorganization to address the GE/NBC sale because, as far as the bankruptcy court was concerned, there was no such sale until May 6, 1996. And, as the proceedings before the bankruptcy court evidenced, the Partnerships' plan of reorganization was not a static set of simple steps. The plan was fluid, subject to uncertainties and disputes, and flexible enough to accommodate a sale of a portion of Rockefeller Center consummated after the Shareholders' vote. Thus, the statement that the plan of reorganization contemplates the sale to GE/NBC is completely consistent with the overall intent of the May 22, 1996 letter: to convince the Department of Law that the recently consummated sale to GE/NBC did not contravene the plan of reorganization and, consequently, that the Department of Law should extend its no-action position. 84 In fact, the only plausible chronology of events is delineated by the Shareholders' own allegations: (1) a plan of reorganization was, in fact, filed with the bankruptcy court in February 1996; (2) at some point after the proxy vote, the Investor Group and GE/NBC agreed to the sale of a portion of Rockefeller Center; (3) this disclosure was made to the bankruptcy court on May 6, 1996, at which time the bankruptcy court satisfied itself that the sale to GE/NBC was consistent with Partnerships' Second Amended Disclosure Statement and Plan of Reorganization; and (4) on May 22, 1996, RCPI requested that the New York State Department of Law approve the sale by seeking to extend the effect of the 1988 no-action letter to the GE/NBC deal. The fact that the Shareholders misinterpret statements made throughout the course of these events does not change the fact that their allegations do not substantiate their core claim of fraud — that the Investor Group had engaged in negotiations relating to the GE/NBC sale prior to the proxy vote and that the Investor Group had formed an intent to consummate that sale during those prevote negotiations. 85 Having reviewed all of the critical factual events alleged by the Shareholders, we agree with the District Court that the Shareholders have failed to support their claims of fraud with the factual particularity required by Rule 9(b) and the Reform Act, 15 U.S.C. § 78u-4(b)(1).