EFiled: Jun 29 2016 01:47PM EDT
Transaction ID 59209624
Case No. 10287-VCS
COURT OF CHANCERY
OF THE
STATE OF DELAWARE
417 S. State Street
JOSEPH R. SLIGHTS III Dover, Delaware 19901
VICE CHANCELLOR Telephone: (302) 739-4397
Facsimile: (302) 739-6179
June 29, 2016
Sidney S. Liebesman, Esquire David L. Finger, Esquire
Montgomery, McCracken, Walker Finger & Slanina, LLC
& Rhoads, LLP One Commerce Center
1105 North Market Street, Suite 1500 1201 N. Orange Street, 7th Fl.
Wilmington, DE 19801 Wilmington, DE 19801
Robert D. Goldberg, Esquire Kathleen M. Miller, Esquire
Biggs and Battaglia Smith, Katzenstein & Jenkins LLP
921 North Orange Street 1000 West Street, Suite 1501
Wilmington, DE 19801 Wilmington, DE 19801
Re: Smollar v. Potarazu
C.A. No. 10287-VCS
Date Submitted: May 23, 2016
Dear Counsel:
VitalSpring Technologies, Inc. (“VitalSpring”) stockholders, Britt Family
Investments LLC, Jeff Waters, and the Kenneth F. Logue Revocable Declaration
of Trust DTD (“Movants”) have brought a Motion to Intervene as representative
Smollar v. Potarazu
C.A. No. 10287-VCS
June 29, 2016
Page 2
plaintiffs in this derivative action pursuant to Court of Chancery Rule 24 (the
“Motion”). The Motion currently stands unopposed.1
Intervention as of right is appropriate, pursuant to Court of Chancery
Rule 24, “when the applicant claims an interest relating to the . . . transaction
which is the subject of the action and . . . the disposition of the action may . . .
impede the applicant’s ability to protect that interest, unless the applicant’s interest
is adequately represented by existing parties.”2 As VitalSpring stockholders,
Movants have an “interest” in pursuing VitalSpring’s claims of wrongdoing
(including breach of fiduciary duty, misappropriation of assets and waste) against
the defendant, Sreedhar Potarazu, as initially asserted in a complaint filed by
Marvin Smollar in October 2014.3
1
Tr. of Oral Arg. on Pl.’s Mot. for an Interim Award of Att’ys’ Fees and Expenses; Britt
Family Investors LLC, Jeff Waters, and the Kenneth F. Logue Revocable Decl. of Trust
DTD’s Am. Mot. to Intervene, at 65.
2
Ct. Ch. R. 24.
3
See United Rentals, Inc. v. RAM Hldgs., Inc., 2007 WL 4327770, at *1 (Del. Ch.
Nov. 29, 2007) (“Consideration of an intervener’s standing is implicit in the court’s
analysis of the elements of Rule 24.”).
Smollar v. Potarazu
C.A. No. 10287-VCS
June 29, 2016
Page 3
By opinion and order of today’s date, the Court has granted a motion to
disqualify Mr. Smollar and his counsel from further participation in this litigation.
Consequently, Movants’ interests are no longer “adequately represented by
existing parties.”4 Their ability to protect their interests, as well as the interests of
all similarly situated VitalSpring stockholders, in pursuing a final resolution of this
action will be impaired unless and until another representative plaintiff intervenes.
Accordingly, Movants are entitled to intervene as a matter of right, and the Motion
must be granted.5
IT IS SO ORDERED.
Very truly yours,
/s/ Joseph R. Slights III
4
Ct. Ch. R. 24.
5
Michelson v. Duncan, 1980 WL 273542, at *2 (Del. Ch. Apr. 1, 1980) (allowing the
movant to intervene as a matter of right following former plaintiff’s disqualification, and
holding that because he has the right to intervene, “he should not be compelled to
undergo discovery, at this time, as to issues other than the issue of whether he is in fact
now a stockholder of [the company] and was such at the time of the transactions which
are the subject of this suit”).