Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Obeid v. Gemini Real Estate Advisors, LLC

Court of Chancery of Delaware

June 5, 2018

WILLIAM T. OBEID, Plaintiff,
v.
GEMINI REAL ESTATE ADVISORS, LLC and GEMINI EQUITY PARTNERS, LLC, Delaware Limited Liability Companies, Defendants.

          POST-TRIAL RULING

          Travis Laster Vice Chancellor J.

         1. The plaintiff sought books and records. A one-day trial took place on March 12, 2018. The evidence supported the following factual findings:

         a. Defendant Gemini Real Estate Advisors, LLC (the "Company") is a Delaware limited liability company. Through special purpose entities and fund vehicles, it acquires, develops, finances, and operates commercial real estate investments. The internal affairs of the Company are governed by its Amended and Restated Limited Liability Company Agreement (the "Company LLC Agreement"). Plaintiff William T. Obeid and non-parties Christopher La Mack and Dante Massaro are the Company's only members, with each holding a 33.333% membership interest. Obeid, La Mack, and Massaro are also the three managers of the Company. Under the Company LLC Agreement, the Company's managers can designate an Operating Manager with authority to conduct the day-to-day operations of the Company. Obeid served as the Company's Operating Manager from the Company's inception until disputes arose between Obeid and his fellow managers.

          b. Defendant Gemini Equity Partners, LLC ("Gemini Partners") is a Delaware limited liability company. On paper, it appears to own and manage Company-affiliated assets. In practice, Gemini Partners is a holding company. The Company manages all of Gemini Partners' assets and maintains custody and control over all of its records. Gemini Partners' internal affairs are governed by its Limited Liability Company Agreement (the "Partners LLC Agreement"). Obeid, La Mack, and Massaro are the only members of Gemini Partners with each holding a 33.333% membership interest. Under the Partners LLC Agreement, a board of directors governs Gemini Partners. Obeid, La Mack, and Massaro served as directors from Gemini Partners' inception until disputes arose between Obeid and his fellow directors.

         c. Section 8.6.1 of the Company LLC Agreement states;

The Company shall maintain the Company's books and records and shall determine all items of Income, Loss, Net Income and Net Loss in accordance with the method of accounting selected by a Majority in Interest of the Members, consistently applied. All of the records and books of account of the Company, in whatever form maintained, shall at all times be maintained at the principal office of the Company and shall be open to the inspection and examination of the Members or their representatives during reasonable business hours. Such right may be exercised through any agent or employee of a Member designated by it or by an attorney or independent certified public accountant designated by such Member. Such Member shall bear all expenses incurred in any examination made on behalf of such Member.

         d. William Stelma served as the senior executive at the Company with responsibility for its finances from 2010 until January 2018, when he ceased being a full-time employee. He is currently a Company consultant and remains responsible for all of the accounting functions for the Company and all of its affiliates, e. The Company maintains general ledgers for its affiliates using a software platform provided by Yardi Systems, Inc. (the "Yardi Database"). All of the non-accounting information for those affiliates, such as organizational documents, tax returns, investor reports, and property records is maintained on the Company's cloud-based server. Obeid, La Mack, Massaro, and Stelma historically had access to the Yardi Database.

         f. On July 1, 2014, La Mack and Massaro voted to remove Obeid as the Company's Operating Manager and replace him with Massaro. That same day, La Mack and Massaro sued Obeid in North Carolina state court. Later that month, La Mack and Massaro terminated everyone's access to the Yardi Database, except for Stelma, g. On June 27, 2017, Obeid demanded information under Section 18-305 of the Delaware Limited Liability Company Act and Section 8.6.1 of the Company LLC Agreement. The defendants refused to provide it, prompting Obeid to file this action.

         h. On December 4, 2017, Obeid supplemented his demand to seek "any Excel-based workbooks prepared by William Stelma on behalf of [the Company] that calculate the investor returns and Manager promote fees owed as a result of the sales of assets owed by the fund entities." He also asked that "modifications, additions or deletions to such Excel workbooks be immediately furnished [as they] become available to [the Company] or its agents or representatives." Obeid amended his complaint to incorporate his supplemental demands. Beginning on March 2, 2018, the defendants produced a series of spreadsheets responsive to the supplemental request.

         i. By the time of trial, the scope of information in dispute had narrowed to the following:

          Any updated versions of Exhibits 1-6 to JX 115 (the March 2, 2018 Affidavit of William Stelma). . .;

Any Excel workbook prepared on behalf of [the Company] that summarizes the distributions to investors in the [Company's fund entities], or fees earned by [the Company] as manager of [those entities], and/or which forecasts such distributions and fees (e.g., any current workbook comparable to JX 116 or JX 117); and,
Read-only access to [the Company's] Yardi [D]atabase with sufficient permission to view the individual accounts for [the Company], Gem Hotel Union Square, LLC, Gemini 305 West 39th Street, LLC, Gemini Fund 5, LLC, Gemini New York Hospitality Fund, LLC, Gemini NYC Hotel, LLC, Gemini Opportunity Fund I, LLC, Gemini Opportunity ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.