Submitted: January 6, 2015
Adam Hiller, Brian Arban, HILLER & ARBAN, LLC, Wilmington, Delaware; Ernest B. Murphy, MURPHY LAW OFFICES, Boston, Massachusetts; Philip F. Coppinger, LAW OFFICES OF PHILIP F. COPPINGER, Marlborough, Massachusetts; Attorneys for Petitioner Louis J. Grossman.
Peter B. Ladig, Brett M. McCartney, MORRIS JAMES LLP, Wilmington, Delaware; Attorneys for Respondent Claire J. Cohen.
LASTER, Vice Chancellor.
Two families own three real estate properties through two Massachusetts limited partnerships. The general partners of the limited partnerships are two Delaware corporations. The petitioner, Louis J. Grossman, owns 50% of the stock of each of the general partners. The respondent, Claire J. Cohen, owns the other 50%. Louis has filed a petition to dissolve the general partners pursuant to Section 273 of the Delaware General Corporation Law, 8 Del. C. § 273. The petition is granted.
I. FACTUAL BACKGROUND
Trial took place on January 6, 2015. The following facts were proven by a preponderance of the evidence.
A. The Partnerships
The Grossmans and the Cohens have known each other for nearly half a century. The family patriarchs, Morton Grossman and Bernie Cohen, initially formed an entity called Main Street with two other partners. In 1978, Main Street acquired two commercial properties in Northampton, Massachusetts, and a third in Brookline, Massachusetts (the "Properties").
In 1992, Morton and Bernie formed two Massachusetts limited partnerships: the Bermor Limited Partnership and the Bermor Taunton Limited Partnership (the "Partnerships"). They coined the name "Bermor" as a portmanteau of the first three letters of their first names: Bernie and Morton. The Partnerships are governed by virtually identical limited partnership agreements (the "LP Agreements").
The purpose of the Partnerships was and remains to own the Properties for the benefit of the members of their Grossman and Cohen families, who are limited partners in the Partnerships. The limited partners originally comprised two Grossman family members and two Cohen family members. Presently, there are twenty-five Grossman limited partners and six Cohen limited partners.
The general partners of the Partnerships are two Delaware corporations: Bermor Inc. and Bermor Taunton, Inc. (the "General Partners"). Each General Partner owns a 1% interest in its respective Partnership. The General Partners are governed by virtually identical certificates of incorporation and bylaws (the "By-Laws").
Each General Partner is a joint venture corporation with two 50% stockholders. The stockholders currently are Louis and Claire. Louis is Morton's son. He owns 100% of the Class A common stock of each General Partner. Claire is Bernie's widow. She owns 100% of the Class B common stock of each General Partner.
The board of directors of each General Partner consists of two Class A directors and two Class B directors. The Class A directors are elected by the holders of the Class A shares; the Class B ...