Opinion ID: 1904669
Heading Depth: 2
Heading Rank: 4

Heading: Appellees Misplace Their Reliance Upon Wallasey Tenants

Text: To forestall this conclusion, appellees rely upon our decision in Wallasey Tenants Ass'n, where we carved out an exception for some transactions which appear to meet the subsection (a) definition of a sale but nevertheless (we held) do not trigger the tenants' opportunity to purchase a building. In that case, Mr. Fairbairn had transferred an apartment building from himself to entities wholly owned by him. Wallasey Tenants Ass'n v. Varner, 892 A.2d 1135 (D.C.2006). Although the conveyance took the appearance of a sale, id. at 1141, we held that it did not trigger a right of the tenants to purchase the property. The conveyance directed by Mr. Fairbairn to a de facto wholly owned corporation was effectuated for no purpose other than to legitimately limit Mr. Fairbairn's liability and to simplify his future estate planning. Id. at 1141 (footnote omitted). There had been no arms' length bargaining between the grantor and the grantee. Id. Finally, and most significantly, Mr. Fairbairn remained in ultimate control of the Wallasey at all times.... [T]his conveyance was a restructuring not a sale. Id. In other words, the right of first refusal under the Sale Act is simply not available when closely related parties who do not engage in arms' length dealings convey property for the purposes of estate planning, tax restructuring, limiting liability, or general property management. Id. at 1141 n. 3. Appellees' arrangement is not comparable to that discussed in Wallasey, and, consequently, they cannot benefit from the exception we created in that case. Unlike Wallasey, the transfer here clearly was not conducted for the purposes of estate planning, tax restructuring, limiting liability, or general property management. Alem admitted that the major reason for structuring the transaction as a stock sale was to avoid having to make an offer of sale to the tenants. Thai also understood the stock purchase to be necessary because the seller did not want to go through [the] tenant[s]. There was arms' length bargaining over the price and the structure of the deal. Moreover, IMC did not retain control of the property. Control was transferred to Thai, and ownership followed shortly thereafter. Finally, the entire transaction was contemplated by, and carried out in accordance with, the Stock Sale Agreement, which spelled out the obligations of the parties. Our holding in Wallasey does not assist appellees. We emphasize that we have viewed the evidence in the light most favorable to the tenants' association. Further inquiry may clarify what happened. At this point, however, the date of the authentic deed and the date of its delivery are material facts in genuine dispute. [7] Furthermore, there is a genuine issue whether the $3,875,000 that Thai's company paid under the Stock Sale Agreement was in fact consideration for the transfer of general and absolute title. We therefore reverse the grant of summary judgment and remand the case to the trial court for further proceedings. In doing so, we do not preclude consideration of other contentions not specifically rejected here.