Opinion ID: 779915
Heading Depth: 3
Heading Rank: 5

Heading: The February 20, 1996 Draft Letter & The April 23, 1996 Sale Agreement

Text: 73 According to the Shareholders, the agreement evidencing the sale of a portion of Rockefeller Center to GE/NBC itself supports their claims. They assert that the April 23, 1996 sale agreement provided for: a payment by GE/NBC of $440,000,000 (`the Purchase Price'), to be paid to the successor owner in the manner contemplated by the reorganization plan. Second Amended Complaint, at ¶ 87 (emphasis in original). Furthermore, the Shareholders contend that the sale agreement referred to a draft letter of February 20, 1996 in which NBC assumed control over heating, ventilation, air conditioning, elevator, and window washing systems of the space it occupied. The Shareholders argue that since the Partnerships had filed a Second Amended Joint Plan of Reorganization on February 8, 1996 — the same plan referred to in the sale agreement above — the Investor Group must have contemplated the sale at that time. Also, because the sale agreement incorporated by reference the February 20, 1996 letter agreement, the sale must have been in consideration at that time as well. 74 The District Court held that the term contemplated in the sale agreement does not refer to the subject of negotiations between the Investor Group and GE/NBC when the Second Amended Reorganization Plan was filed, but rather to the manner of payment of sale proceeds as set forth in that plan. We agree, and find no plausible interpretation fitting the Shareholders' description. The phrase a payment ... to be paid to the successor owner in the manner contemplated by the reorganization plan is a clear statement of how the parties to the sale intend to structure the payment, that is, as set forth in or contemplated by the reorganization plan. This is nothing more than an assurance given by the parties to the sale that the $440 million payment would be in accordance with the requirements of the prior reorganization plan. That assurance does not support the Shareholders' view that the sale itself was somehow in contemplation in February 1996, when the Second Amended Reorganization Plan was filed. The absence of any independent indication of a potential sale to GE/NBC in the reorganization plan supports the District Court's interpretation. 75 With regard to the incorporation by reference of the February 20, 1996 letter agreement, we agree that it also fails to substantiate the Shareholders' claims. First, the sequence of events does not logically flow to the conclusion that the Shareholders advocate. The fact that GE/NBC negotiated for some autonomy over physical plant systems in February 1996 does not mean that sale negotiations were underway at that point. In fact, it seems to point to the contrary conclusion, namely that as lessee they desired more control. A subsequent sale simply indicates that the negotiations progressed along a continuum, starting with alternative lease options and advancing to arrangements contemplating more control in the hands of GE/NBC. Thus, the incorporation of the February 20, 1996 letter agreement in the April 23, 1996 sale agreement fails to show that the Investor Group had engaged in sale negotiations with GE/NBC before the date of the proxy vote, March 25, 1996. 76