CEDARVIEW OPPORTUNITIES MASTER FUND, L.P., CETUS CAPITAL III, L.P., CORRIB CAPITAL MANAGEMENT, L.P., LITTLEJOHN OPPORTUNITIES MASTER FUND L.P., RAVENSOURCE FUND, STONEHILL INSTITUTIONAL PARTNERS, L.P, STONEHILL MASTER FUND LTD., STORNOWAY RECOVERY FUND L.P., VSS FUND, L.P., WEST FACE LONG TERM OPPORTUNITIES GLOBAL MASTER L.P., and WOLVERINE FLAGSHIP FUND TRADING LIMITED, Plaintiffs,
SPANISH BROADCASTING SYSTEM, INC., Defendant.
ORDER DENYING DEFENDANT'S MOTION FOR PARTIAL
August 27, 2018, the court issued a memorandum opinion
granting in part and denying in part SBS's motion to
dismiss the Amended Complaint in its entirety under Court of
Chancery Rules 12(b)(1) and 12(b)(6) for lack of subject
matter jurisdiction and for failure to state a claim for
Count V of the Amended Complaint seeks a declaratory judgment
that Section 10.4 of the Charter, which purports to allow the
suspension of all rights of the stockholders of a Delaware
corporation, is invalid and unenforceable under Delaware
court denied SBS's motion to dismiss with respect to
Count V, holding that Count V is ripe and that plaintiffs
stated a claim that Section 10.4 is invalid as
September 4, 2018, SBS filed a motion for partial reargument
under Court of Chancery Rule 59(f) concerning the denial of
its motion to dismiss with respect to Count V (the
"Motion"), to which plaintiffs filed an answer in
opposition on September H, 2OI8.
HEREBY ORDERED, this 27th day of November, 2018,
"A motion for reargument under Court of Chancery Rule
59(f) will be denied unless the court has overlooked a
controlling decision or principle of law that would have
controlling effect, or the court has misapprehended the law
or the facts so that the outcome of the decision would be
different." A motion for reargument is not a mechanism
to "relitigate claims already considered by the court,
" or to make new arguments. SBS thus bears
"a heavy burden on a Rule 59 motion."
contends that the court "expressly relied on a single
representation of fact (made in briefing and at oral
argument) to find that Count V is ripe: Plaintiffs'
assertion that SBS rejected a Section 220 books and records
demand (the 'Demand') sent by West Face Long Term
Opportunities Global Master L.P. ('West Face') on the
basis of a suspension of stockholder rights authorized by the
Charter's Enforcement Provision" in Section 10.4 of
According to SBS, this representation was
"inaccurate" because, insofar as its rejection of
the Demand concerned West Face's potential lack of
standing, "the rejection was not on the basis of any
suspension of rights pursuant to the Enforcement Provision in
Section 10.4 of the Charter" but instead was based on
Section 10.5, which provides that any transfer of SBS's
stock is ineffective if the transfer would violate the
Communications Act or require prior approval of the FCC,
including if the transfer results in "alien"
ownership of more than 25% of SBS's stock.
fundamental problem with SBS's Motion is that SBS never
argued previously that Section 10.5 of the Charter was the
basis for its rejection of the Demand due to a potential lack
of standing. Significantly, furthermore, SBS's
rejection of the Demand did not identify Section 10.5
specifically as one of the reasons for the rejection. The
rejection letter instead stated that "West Face's
purchase of SBS stock may be invalid pursuant to Article
X of SBS's" Charter and, if so, "West Face
is not an SBS stockholder and lacks standing to demand books
and records of the Company." Article X includes both
Section 10.4 and 10.5 and, thus, it was not unreasonable for
plaintiffs to infer that SBS's rejection of West
Face's Demand was based on Section 10.4 of the Charter.
Because SBS seeks to raise a new argument that it did not
previously present to the court, its Motion is improper and
must be DENIED.
See Cedarview Opportunities Master
Fund, L.P. v. Spanish Broad. Sys., Inc., 2018 WL 4057012
(Del. Ch. Aug. 27, 2018). Capitalized and abbreviated terms
not defined herein have the same ...