Court Opinion

ID: 4198565
Source: CourtListenerOpinion
Date Created: 2017-08-24 14:04:22.411024+00
Date Added: 2024-06-11T14:39:44.906730
License: Public Domain

COURT OF CHANCERY
                                            OF THE
                                    STATE OF DELAWARE

TAMIKA R. MONTGOMERY-REEVES                                    Leonard L. Williams Justice Center
      VICE CHANCELLOR                                           500 N. King Street, Suite 11400
                                                               Wilmington, Delaware 19801-3734

                                       August 22, 2017

      Martin S. Lessner, Esquire               Kevin G. Abrams, Esquire
      James P. Hughes, Esquire                 John M. Seaman, Esquire
      Tammy L. Mercer, Esquire                 E. Wade Houston, Esquire
      Richard J. Thomas, Esquire               Abrams & Bayliss LLP
      Young Conaway Stargatt & Taylor, LLP     20 Montchanin Road, Suite 200
      1000 North King Street                   Wilmington, DE 19807
      Wilmington, DE 19801
                                               Brock E. Czeschin, Esquire
                                               Nicholas R. Rodriguez, Esquire
                                               Anthony M. Calvano, Esquire
                                               Richards Layton & Finger, P.A.
                                               920 North King Street
                                               Wilmington, DE 19801

             RE:   Southpaw Credit Opportunity Master Fund, L.P. v. Roma
                   Restaurant Holdings, Inc. et al., C.A. No. 2017-0432-TMR

       Dear Counsel:

             Plaintiffs move under Court of Chancery Rule 60(b) for relief from this

       Court’s May 30, 2017 order in light of intervening facts since that date. On May

       30, 2017, this Court ordered that the properly constituted board of Roma

       Restaurant Holdings, Inc. (“Roma”) included Howard Golden, Bradley Scher, and

       Stephen K. Judge. The Court did not decide the validity of the Roma 2016 Long
Southpaw Credit v. Roma Restaurant
C.A. No. 2017-0059
August 22, 2017
Page 2 of 4

Term Incentive Plan (“LTIP”) or the challenged stock grants associated with that

plan because Defendants refused to defend the validity of the plan. In the May 30,

2017 order, the Court “retain[ed] jurisdiction to hear any application or claim for

attorneys’ fees on a schedule to be agreed upon by the parties or ordered by the

Court.” On July 20, 2017, Roma stockholder Highland Select Equity Fund, L.P.

(“Highland”), whose appointees to the Roma board included Defendants, filed a

separate action under Section 225 of the DGCL disputing the current membership

of the Roma board and presenting the issue of the validity of the LTIP to the Court

again (the “Highland Action”).

      Defendants assert that the May 30, 2017 order was not a final judgment or

order and that Rule 60(b) does not apply because the Court retained jurisdiction to

hear an application or claim for attorneys’ fees. I agree. See In re Appraisal of

Dell Inc., 2016 WL 6069017, at *18 (Del. Ch. Oct. 17, 2016) (“The Delaware

Supreme Court ‘consistently has held that a judgment on the merits is not final

until an outstanding related application for an award of attorneys fees has been

decided.’” (quoting Del. Bay Surgical Servs., P.A. v. Swier, 869 A.2d 327 (Del.

2005) (Table))). Under Court of Chancery Rule 54(b), an order of this Court that

does not dispose of all of the claims and the rights and liabilities of all of the
Southpaw Credit v. Roma Restaurant
C.A. No. 2017-0059
August 22, 2017
Page 3 of 4

parties “is subject to revision at any time before the entry of judgment adjudicating

all the claims and the rights and liabilities of all the parties.” Ct. Ch. R. 54(b). A

federal court interpreting the nearly identical federal rule stated that “[t]he standard

for granting a motion to vacate under Rule 54(b) is less rigid than that under Rule

60(b) . . . .” Gallant v. Telebrands Corp., 35 F. Supp. 2d 378, 394 n.16 (D.N.J.

1998). While orders should not be modified without good cause (see Washington

v. Preferred Commc’n Sys., Inc., C.A. No. 10810-VCL (Sept. 10, 2015) (ORDER)

(granting a Rule 54(b) motion and noting that good cause existed to modify the

order)), the Court is “under no stricture to comply with the requirements of Rule

60(b)” in modifying an interlocutory order. Farr Man & Co. v. M/V Rozita, 903
F.2d 871, 875 (1st Cir. 1990).

      Highland—whose managing director is Defendant Scott Wilson and whose

other appointee to the Roma board is Defendant Kenneth Reimer—now seeks to

place Reimer and Wilson on the Roma board in a separate action by relying on the

validity of the LTIP. This Court relied on Wilson and Reimer’s refusal to defend

the LTIP in entering the May 30, 2017 order. Further, determining the validity of

the LTIP in this litigation as opposed to the Highland Action will conserve both the

parties’ and the Court’s resources. Thus, the Court vacates the May 30, 2017 order
Southpaw Credit v. Roma Restaurant
C.A. No. 2017-0059
August 22, 2017
Page 4 of 4

under Rule 54(b) for good cause. The parties may stipulate to a trial on a paper

record regarding the validity of the LTIP.

                                             Sincerely,
                                             /s/ Tamika R. Montgomery-Reeves
                                             Tamika R. Montgomery-Reeves
                                             Vice Chancellor
TMR/jp