Traverse et al v. The Gutierrez Company
Plaintiff: Nassrine Traverse and Norman Traverse
Defendant: The Gutierrez Company
Case Number: 1:2019cv10723
Filed: April 15, 2019
Court: US District Court for the District of Massachusetts
Presiding Judge: Denise J Casper
Nature of Suit: Stockholders Suits
Cause of Action: 28:1332
Jury Demanded By: None
Docket Report

This docket was last retrieved on May 13, 2019. A more recent docket listing may be available from PACER.

Date Filed Document Text
May 13, 2019 Filing 25 NOTICE of Voluntary Dismissal by Nassrine Traverse, Norman Traverse (Koral, Jason)
May 9, 2019 Filing 24 Judge Denise J. Casper: ELECTRONIC ORDER entered. D. #3 : Plaintiffs Norman Traverse and Nassrine Traverse (collectively, "the Traverses") seek a preliminary injunction against Defendant The Gutierrez Company ("TGC") enjoining TGC from failing to make available documents related to Technology Park X Limited Partnership ("Tech Park X") and Technology Park V Limited Partnership ("Tech Park V"). D. 3. The Traverses' motion for leave to file a reply brief, D. 18, is ALLOWED. The Court considered the reply brief, D. 18-3, and the sur-reply, D. 23, along with the other motion papers in resolving this motion. For the following reasons, the Court DENIES the Traverses' motion, D. 3. Standard of Review. Injunctive relief "is an 'extraordinary and drastic remedy.'" Voice of the Arab World, Inc. v. MDTV Med. News Now, Inc., 645 F.3d 26, 32 (1st Cir. 2011) (quoting Munaf v. Geren, 553 U.S. 674, 689-90 (2008)). To obtain such relief, the Court must consider: (1) the movant's likelihood of success on the merits; (2) the likelihood of the movant suffering irreparable harm; (3) the balance of equities; and (4) whether granting the injunction is in the public interest. Corp. Techs., Inc. v. Harnett, 731 F.3d 6, 9 (1st Cir. 2013). Plaintiffs "bear[] the burden of establishing that these four factors weigh in [their] favor." Esso Standard Oil Co. (P.R.) v. Monroig-Zayas, 445 F.3d 13, 18 (1st Cir. 2006) (citation omitted). Factual Background. The Traverses are limited partners in Tech Park X and Tech Park V and TGC is the general partner of those entities. D. 1 2-3. The Traverses jointly own a thirty-eight percent interest in both Partnerships. D. 1 16. The Partnerships both own commercial property in Billerica, Massachusetts. D. 1 2. This matter arises from a proposed sale of the Tech Park Partnership properties and the Traverses' contractual right of first refusal ("ROFR") for Tech Park X and right of first offer ("ROFO") for Tech Park V. The Tech Park X Limited Partnership ("LP") Agreement provides for sixty days for the Traverses to exercise their ROFR after receiving notice of a bona fide offer for the Partnership property, D. 16-1 at 20, and the Tech Park V LP Agreement provides for ninety days for the Traverses to exercise their ROFO whenever Tech Park V decides to sell the Partnership property, D. 16-2 at 33. If the Traverses exercise their ROFR/ROFO, they have the right to purchase the Partnership property themselves on the terms provided by TGC. D. 16-1 at 20; D. 16-2 at 33. Otherwise, TGC can sell to a third party under those terms. D. 16-1 at 20; D. 16-2 at 34.TGC provided notice to the Traverses on March 13, 2019 that a company called KS Partners had proposed to buy the properties of both Tech Park X and Tech Park V. D. 1 25-27; see D. 5-2 at 2-8. The sale price is less than what the Traverses believe the properties to be worth. D. 1 4. The Traverses also suspect that the sale is a ploy to remove them as limited partners in a "collusive transaction" or to get the Traverses to buy the properties without revealing information to them that would "damage" them if they purchased the properties. D. 1 36.The ROFR/ROFO provisions of the Tech Park LP Agreements outline TGC's obligations to the Traverses but do not provide for a mechanism for the Traverses to request or review Partnership records. See D. 16-1 at 20 (providing, in the Tech Park X LP Agreement, that TGC must give the Traverses notice of the proposed sale, along with "a true and complete copy of the bona fide offer and full and fair disclosure of any material information available as to the proposed transaction and the parties thereto"); D. 16-2 at 33 (providing, in the Tech Park V LP Agreement, that TGC must give the Traverses notice of "its intention to sell [], together with a proposed purchase price, prior to offering or accepting an offer therefor, together with a proposed form of purchase and sale agreement"). The Traverses have separate contractual rights to review Partnership books and records that are the source of an ongoing dispute in the related matter pending before the Court. See D. 16-1 at 23 (providing, in the Tech Park X LP Agreement, that "[t]he books and records of the Partnership shall be kept and maintained at the principal office of that Partnership and shall be available for examination by any Partner, or his duly authorized representatives, during regular business hours"); D. 16-2 at 24 (providing, in the Tech Park V LP Agreement, that "[a]ll books and records shall be maintained at the Partnership's principal office and each Partner, and his duly authorized representative, shall have access to them and the right to inspect and copy them at all reasonable times").The Traverses claim to lack information regarding notes payable on the Tech Park Partnership properties and allege that TGC has made contradictory representations about certain costs related to the properties. D. 1 43, 45. Accordingly, the Traverses contend they lack sufficient information to "make an informed decision" about their ROFR/ROFO. D. 1 53.The Traverses have moved for a preliminary injunction enjoining TGC from failing to make available documents related to partner loans, partnership activities, financial reporting, mortgage debts and cash disbursements for the Tech Park Partnerships from 2018 to the present, all correspondence with and documents related to KS Partners (including internal correspondence) and "any other documents plaintiffs identify as reasonable and necessary for them to review in connection with their due diligence in evaluating" their ROFR/ROFO. D. 1 at 16; D. 3 at 1. They also seek to enjoin TGC from interfering or curtailing their rights to communicate with tenants or lenders of the Tech Park Partnerships. D. 1 at 17; D. 3 at 1. Finally, the Traverses request that TGC's proposed transfer of the Tech Park properties be enjoined until twenty business days after TGC complies with the requested injunctive relief. D. 1 at 17-18; D. 3 at 1.Discussion. Likelihood of Success on the Merits. The Court concludes that the Traverses have not demonstrated a substantial likelihood of success on the merits for their document request claim. TGC has submitted a sworn affidavit from its Chief Financial Officer Stephen Brickett attesting that, as required by the Tech Park LP Agreements, TGC has provided the Traverses with notice of the proposed sales along with proposed Purchase and Sale Agreements and a "link to all material information that [was] provided by [the listing agent] to all proposed buyers, including KS Partners." D. 16 41, 43. Furthermore, the Tech Park LP Agreements do not provide the Traverses with a contractual right to request documents in conjunction with their ROFR/ROFO. Even under their separate contractual right to review books and records, the Traverses have not shown here that TGC has breached its obligation to make books and records available for inspection at reasonable times in connection with the proposed sales. See Lockey v. Kanodia, No. 99-5537 BLS, 2001 Mass. Super. LEXIS 224, at *23 (Mass. Super. Ct. May 15, 2001) (granting judgment to a general partner on limited partner's claim of breach of fiduciary duty relating to records requests based on a similar contractual provision and explaining that the limited partner's requests for "detailed explanations and back up material for actions taken and payments made by [the general partner]... [were] more than what was required by the governing document"). Even assuming TGC had refused to make books and records related to the proposed sales available for inspection, the Traverses have not specifically identified any documents that have not yet been disclosed that would be "material" to their ROFR under the terms of the Tech Park X LP Agreement. See D. 16-1 at 20. Instead, they have identified sweeping categories of documents to which they believe they are entitled, including any documents the Traverses deem "reasonable and necessary" for their due diligence. To the extent the Traverses now rely in their reply brief on additional factual bases for their claims, as provided in Nassrine Traverse's supplemental affidavit, D. 18-4, those alleged facts do not change the Court's analysis. See D. 23 at 6 (explaining, in TGC's sur-reply, that the Traverses' interpretation of the books and records contractual provisions would entitle the Traverses to every Tech Park LP document).Risk of Irreparable Harm. The Traverses also have not made a showing of irreparable harm, because they are in at least as advantageous a position as any proposed buyer of the Tech Park properties, having been given the same documents as other buyers and having received numerous other Partnership documents over the years. See D. 16 20, 47 (attesting that the Traverses have reviewed Partnership records every year that include partner loans, partner memos, bank records, reconciliation journals, general ledgers, balance sheets and audited financial statements for the Tech Park Partnerships and that TGC allowed the Traverses to conduct a supplemental review in early 2019). Furthermore, the Purchase and Sale Agreements for the Tech Park properties provide for a due diligence period, during which the Traverses can conduct further inquiries if they opt to exercise their ROFR/ROFO, D. 16 43; D. 5-2 at 4, notwithstanding their allegation that TGC threatened to sue them if they had any communication with tenants or lenders at the Tech Park properties, claiming that any such conversation would be an "interference" with TGC's tenant/lender relationships, D. 1 55.Balance of Equities and the Public Interest. The final considerations in weighing the grant of a preliminary injunction are "a balance of equities in the plaintiff's favor, and [] service of the public interest." Arborjet, Inc. v. Rainbow Treecare Sci. Advancements, 794 F. 3d 168, 171 (1st Cir. 2015). Here, the balance of equities weighs in favor of TGC because "[a] preliminary injunction may kill, rather than suspend, a proposed transaction." FTC v. Weyerhaeuser Co., 665 F.2d 1072, 1087 (D.C. Cir. 1981). Such a risk for TGC would be inequitable here because the Traverses have not demonstrated a substantial likelihood of
May 8, 2019 Filing 22 Judge Denise J. Casper: ELECTRONIC ORDER entered granting #21 Motion to Seal Document (McKillop, Matthew)
May 8, 2019 Filing 21 MOTION to Seal Document #20 Opposition to Motion by The Gutierrez Company.(Tuxbury, James)
May 8, 2019 Filing 20 Opposition re #18 MOTION for Leave to File Reply Brief and Affidavit filed by The Gutierrez Company. (Attachments: #1 Exhibit Ex. A - Proposed Sur-Reply Subject to Motion for Leave to File Under Seal)(Tuxbury, James)
May 6, 2019 Filing 19 Second MOTION to Seal Document Amended Complaint by Nassrine Traverse, Norman Traverse.(Koral, Jason) (Additional attachment(s) added on 5/9/2019: #1 Sealed Amended Verified Complaint) (McKillop, Matthew).
May 3, 2019 Filing 18 MOTION for Leave to File Reply Brief and Affidavit by Nassrine Traverse, Norman Traverse. (Attachments: #1 Exhibit A Proposed Reply Memo Of Law, #2 Exhibit B Proposed Reply Affidavit of Nassrine Traverse (sealed))(Koral, Jason) (Additional attachment(s) added on 5/9/2019: #3 Sealed Memo of Law in Support of Motion for Preliminary Injunction, #4 Sealed Reply Affidavit in Support of Preliminary Injunction) (McKillop, Matthew).
April 26, 2019 Filing 11 Judge Denise J. Casper: ELECTRONIC ORDER entered granting #2 Motion to Seal unredacted complaint, the unredacted memorandum of law in support of preliminary injunction, Exhibits C,D, and E to the Affidavit of Jason Koral in Support of Plaintiffs motion for preliminary injunction (McKillop, Matthew)
April 26, 2019 Filing 10 NOTICE of Appearance by James L. Tuxbury on behalf of The Gutierrez Company (Tuxbury, James)
April 26, 2019 Filing 9 NOTICE of Appearance by Kelley A. Jordan-Price on behalf of The Gutierrez Company (Jordan-Price, Kelley)
April 22, 2019 Filing 8 Judge Denise J. Casper: ELECTRONIC ORDER entered. A motion for preliminary injunction was filed on April 15, 2019. Court orders defendant to file its opposition by Friday, April 26, 2019. (Hourihan, Lisa)
April 17, 2019 Filing 7 Filing fee/payment: $ 400, receipt number 1BST073928 for 1 Complaint (adminn, )
April 15, 2019 Filing 6 ELECTRONIC NOTICE of Case Assignment. Judge Denise J. Casper assigned to case. If the trial Judge issues an Order of Reference of any matter in this case to a Magistrate Judge, the matter will be transmitted to Magistrate Judge Jennifer C. Boal. (adminn, )
April 15, 2019 Filing 5 DECLARATION Affirmation of Jason M Koral in Support of Plaintiff's Motion for preliminary injunction by Nassrine Traverse, Norman Traverse. (Attachments: #1 Exhibit A-B, #2 Sealed Exhibits C-E )(Castilla, Francis)
April 15, 2019 Filing 3 MOTION for preliminary injuction and expedite relief/ Expedite hearing requested by Nassrine Traverse, Norman Traverse.(Castilla, Francis)
April 15, 2019 Filing 2 MOTION to Seal, MOTION to Seal Case unredacted complaint, the unredacted memorandum of law in support of preliminary injunction, Exhibits C,D, and E to the Affidavit of Jason Koral in Support of Plaintiffs motion for preliminary injunction ( Responses due by 4/29/2019) by Nassrine Traverse, Norman Traverse.(Castilla, Francis)

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Plaintiff: Nassrine Traverse
Represented By: Jason M. Koral
Represented By: Kenneth R. Berman
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Plaintiff: Norman Traverse
Represented By: Jason M. Koral
Represented By: Kenneth R. Berman
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Defendant: The Gutierrez Company
Represented By: James L. Tuxbury
Represented By: Kelley A. Jordan-Price
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