More Discovery

Recall the prior agreed upon motion on discovery.

Yesterday, team Trustee filed this motion looking for more discovery prior to the requested declaratory judgement.

While the Parties have negotiated and agreed to a limited exchange of discovery, there are additional particularized categories of discovery that are necessary for Plaintiffs to defend themselves against Counter-Plaintiffs’ Declaratory Judgment/PI
Motion. Given the accelerated timetable of the Parties’ agreed briefing schedule, Plaintiffs respectfully request expedited consideration of these matters.

Accompanying the motion was this memorandum of law.

On June 25, 2019, the Court entered an order to stay discovery in this action pursuant to the PSLRA, after Defendant filed a motion for judgment on the pleadings pursuant to Rule 12(c) of the Federal Rules of Civil Procedure (the “Rules”). [Dkt. 42.] On that same day, Defendant and Counter-Plaintiffs filed the Declarator Judgment/PI Motion, seeking a preliminary injunction and declaratory relief. Given Counter-Plaintiffs’ request for a judgment on the merits of the instant dispute, the Parties agree that discovery is necessary to allow for the proper resolution of the Declaratory Judgment/PI Motion presently before the Court. To that end, Plaintiffs have agreed, subject to standard discovery objections and privilege, to respond to all discovery that CounterPlaintiffs have sought regarding the Declaratory Judgment/PI Motion, including the requests contained in the agreed discovery entered by this Court [Dkt. 53], and additional requests propounded as recently as July 15, 2019.

While Defendant has agreed to allow Plaintiffs access to limited discovery, Defendant continues to oppose certain requests for critical information. In particular, Defendant disputes Plaintiffs’ need for discovery related to communications between Defendant and TPL’s shareholders and for information related to Defendant’s background. These requests, however, bear directly on the issues implicated by the Declaratory Judgment/PI Motion which attacks
Plaintiffs’ fiduciary responsibility to review the qualifications of candidates for trustee and seeks a declaration that the invalid meeting held by Defendant and a small minority of shareholders on May 22, 2019 was proper because Plaintiffs lacked the authority to postpone the meeting to correct Defendant’s false and misleading communications with shareholders.

In case you forgot the reason for the declaratory judgement request, here is the background.  It’s a big one.

On June 14, 2019, Incumbents issued a press release stating they were “obliged to remind shareholders that the proxy solicitation is suspended while the litigation is pending.” On June 21, 2019, Incumbents requested in a Rule 26(f) report that a trial on the merits not commence until at least August 31, 2020. Dkt. 25, ¶ 12. These recent statements – in addition to the daunting discovery requests served last week by Incumbents’ counsel on nonparties affiliated with the Investor Group—including Mr. Oliver’s son and Allan Tessler’s two daughters—make clear TPL’s true motivations behind its lawsuit: intimidate the Investor Group, impose on over 15,000 shareholders at least a year-long delay, and incur the costs of protracted litigation—all in an effort to dodge the shareholders’ election of Mr. Oliver as trustee. In the meantime, the Incumbents continue to illegally manage TPL without the necessary checks Mr. Oliver would bring as a duly elected trustee.

On June 17, 2019, Mr. Oliver moved for dismissal of the federal securities claims
asserted against him in Incumbents’ Amended Complaint.

To restore and confirm TPL shareholders’ rights, Counterclaim Plaintiffs now request a declaratory judgment that: (i) TPL was required to hold a special meeting to elect a successor trustee after one of its trustees resigned in February 2019; (ii) Incumbents had no authority to unilaterally and indefinitely postpone the special meeting they had noticed; (iii) Incumbents have no authority to “disqualify” Mr. Oliver from election; (iv) the vote at the May 22, 2019 special meeting was valid and Mr. Oliver has been duly elected a TPL trustee; and (v) the vote at the January 12, 2017 special meeting was invalid and Mr. Barry has never been duly elected a TPL

To prevent any further abrogation of TPL shareholders’ rights in connection with the May 2019 election, Counterclaim Plaintiffs request a preliminary injunction (i) prohibiting Incumbents from taking any action on TPL’s behalf without Mr. Oliver’s participation as a trustee; or (ii) prohibiting Incumbents from any further unauthorized postponement of the election. To prevent any further denial of TPL shareholders’ rights in connection with the January 2017 election, Counterclaim Plaintiffs request a preliminary injunction prohibiting Mr. Barry from taking any action on TPL’s behalf until a new election can be held.

Doesn’t seem like this request will delay the show.  It does turn the heat on the Oliver team to produce more information.  I’m still somewhat surprised that the Trust is playing ball in not opposing the declatory judgement.  Perhaps they are confident in the merits of their side of the case.

Legal fun aside, I’d rather the Trust be buying shares back whilst being overseen by confidence inspiring indivuals with skin in the game.  Oh what great times we had.




8 thoughts on “More Discovery

  1. yeah. me too. It’s like the whole investment thesis gets suspended. Buying back subshares compounds our returns. It’s a shame that us actual owners are being blackballed by trustees with our capital.

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  2. From my reading of this, and the specifics in Exhibit 1, Team Trustee is asking for 40 discovery items, and of those 26 with some limitations. This is many less than their first request, but still seems like a lot.

    Perhaps this is part of Team Trustee’s strategy to slow down the Declaratory Judgement train, which so far has been on the fast track. Because more discovery might mean they find more things that require yet more discovery. And time. And this controversy could push out dates of the Declaratory Judgement dates previously agreed to.

    Team Oliver disagrees. This line in the motion shows they are far apart: “between June 26 and July 15, 2019, Sidley Austin LLP conferred with counsel for Counter-Plaintiffs by email, telephone, and in person regarding the relief sought in this Expedited Motion for Limited Discovery Related to Counter- Plaintiffs’ Declaratory Judgment and Preliminary Injunction Motion, and the Parties were unable to reach agreement as to the issues involved.”

    We can probably expect a motion in opposition from Team Oliver, and a ruling eventually from Judge Boyle. Or, if this gets more confusing, Judge Boyle might want a hearing on this before ruling. It feels like to me that Team Trustee is saying “we can’t defend ourself unless we can have more discovery” and Team Oliver is saying, “thats the point of 12(c) and bogus lawsuits, you don’t get to ask for discovery. And we did get the judge to sign an order staying discovery”.

    This would all be more fun if us TPL shareholders were not paying for Team Trustees lawyers. To be continued…..

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  3. Enough of this nonsense from the Trustees!!! Starting tomorrow I am going to start calling TPL and whoever answers — I will tell them 1) I voted for EO and 2) Please end the lawsuits against EO/HK

    I suggest others join in on the fun…

    Liked by 2 people

  4. Looks like Oliver and crew responded to the motion for additional discovery filed by the trustees, and today is last day for any responses for any additional request submitted. I’m not currently able to access it, but hoping to get my hands on it! Last weeks motion by the trustees was interesting, as in it they are stating that it’s an “unfair fight” because of the strategic legal maneuvering by Softvest, etc. Does this mean that they are conceding to the fact that they are getting out lawyered? I think that’s kind of like that OutWhataburgered commercial….

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