HUMC Holdco, LLC v. MPT of Hoboken TRS, LLC

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

HUMC HOLDCO, LLC, HUMC PROPCO, )
LLC, HUMC OPCO, LLC, HUDSON )
HOSPITAL HOLDCO, LLC, CH HUDSON )
HOLDCO, LLC, HUDSON HOSPITAL )
PROPCO, LLC, HUDSON HOSPITAL OPCO, )
LLC, and IJKG OPCO, LLC, )
)
Plaintiffs, )
)
v. ) C.A. No. 2019-0972-KSJM
)
MPT OF HOBOKEN TRS, LLC, MPT OF )
HOBOKEN HOSPITAL, LLC, MPT OF )
HOBOKEN REAL ESTATE, LLC, MPT OF )
BAYONNE, LLC, AVERY EISENREICH, )
WTFK BAYONNE PROPCO, LLC, SB )
HOBOKEN PROPCO, LLC, ALARIS )
HEALTH, LLC, and J.C. OPCO, LLC, )
)
Defendants. )
)
)
HUMC OPCO, LLC, )
)
Nominal Party, )
)
and )
)
J.C. OPCO, LLC, on behalf of itself and )
derivatively on behalf of Nominal Defendants )
HUDSON HOSPITAL OPCO, LLC d/b/a )
CHRIST HOSPITAL and CH HUDSON )
HOLDCO, LLC, MPT OF HOBOKEN TRS, )
LLC, and MPT OF HOBOKEN HOSPITAL, )
LLC, )
)
Counterclaim-Plaintiffs, )
 )
v. )
)
HUDSON HOSPITAL HOLDCO, LLC, and )
HUMC HOLDCO, LLC, )
)
Counterclaim-Defendants, )
)
and )
)
VIVEK GARIPALLI, JAMES LAWLER, )
JEFFREY MANDLER, SEQUOIA HEALTH )
MANAGEMENT, LLC, and CAREPOINT )
HEALTH MANAGEMENT ASSOCIATES, )
)
Third-Party Defendants, )
)
and )
)
HUDSON HOSPITAL OPCO, LLC d/b/a )
CHRIST HOSPITAL and CH HUDSON )
HOLDCO, LLC, )
)
Nominal Defendants. )

MEMORANDUM OPINION
Date Submitted: May 28, 2020
Date Decided: July 2, 2020
Susan M. Hannigan, Robert L. Burns, Ryan D. Konstanzer, Megan E. O’Connor,
RICHARDS, LAYTON & FINGER, P.A. Wilmington, Delaware; Counsel for
Plaintiffs HUMC Holdco, LLC, HUMC Propco, LLC, HUMC Opco, LLC, Hudson
Hospital Holdco, LLC, CH Hudson Holdco, LLC, Hudson Hospital Propco, LLC,
Hudson Hospital Opco, LLC, and IJKG Opco, LLC.
Michael P. Kelley, Andrew S. Dupre, McCARTER & ENGLISH, LLP, Wilmington,
Delaware; Michael A. Ackal, III, D. Scott Funk, GRAY REED & MCGRAW LLP,
Houston, Texas; Counsel for Defendants MPT of Hoboken TRS, LLC, MPT of
Hoboken Hospital, LLC, MPT of Hoboken Real Estate, LLC, MPT of Bayonne, LLC.
Patricia L. Enerio, Jamie L. Brown, HEYMAN ENERIO GATTUSO & HIRZEL
LLP, Wilmington, Delaware; Christopher J. Sullivan, Dominic J. Picca, LisaMarie
Collins, MINTZ, LEVIN, COHN, FERRIS, GLOVSKY and POPEO, P.C., New
York, New York; Counsel for Defendants Avery Eisenreich, WTFK Bayonne
Propco, LLC, SB Hoboken Propco, LLC, Alaris Health, LLC, J.C. Opco, LLC.

McCORMICK, V.C.
 The parties to this action are part of an intricate web of people and entities that

own, operate, and lease real estate to three hospitals located in Hudson County, New

Jersey. The defendants moved for judgment on the pleadings on four counts in the

complaint. This decision resolves that motion as to a single count asserted by

Hoboken HUMC against Hoboken MPT for breach of Hoboken Opco’s LLC

Agreement. 1 That count arises from an offer by Alaris Health (“Alaris”) to acquire

Hoboken MPT’s membership interests in Hoboken Opco. An early version of the

offer conditioned the sale of the membership interests on the sale of real estate

owned by other defendants. After the real estate sales closed, Alaris issued a second

version of the offer, which sought to acquire the membership interests only.

The offer from Alaris triggered Hoboken HUMC’s right of first refusal under

Hoboken Opco’s LLC Agreement. The provision grants Hoboken HUMC the right

to acquire the membership interests on “the same terms and conditions” stated in the

Alaris offer. The parties dispute whether the scope of Hoboken HUMC’s first-

refusal right extends to the real estate sales. The parties also dispute what constitutes

a qualifying offer and whether the initial first-refusal notice could be withdrawn after

1
“Hoboken Opco” is HUMC Opco, LLC, “Hoboken HUMC” is HUMC Holdco, LLC, and
“Hoboken MPT” is MPT of Hoboken TRS, LLC. Before diving into the background, it
bears noting that the caption of this case includes nearly twenty Delaware limited liability
companies, the names of which seem like they were selected by a random acronym
generator resulting in a swirling bowl of alphabet soup. To mitigate the dizzying effect,
this decision adopts defined terms and, for the most part, leaves off the “LLC” at the end
of each of the entity parties’ names.
Alaris revised its offer. This decision concludes that although the scope of the first-

refusal right is limited to the membership interest sale, questions of fact concerning

the terms and conditions of that sale, and questions of fact and law concerning the

operative qualifying offer, foreclosing judgment on the pleadings in favor of the

Hoboken MPT. The defendants’ motion as to this issue is therefore denied.

This decision also addresses a secondary dispute concerning a provision of

the LLC Agreement that restricts a member’s ability to transfer governance rights.

Alaris’s offer included a term prohibiting Hoboken MPT from consenting to any

amendments to the LLC Agreement without Alaris’s prior written consent. Hoboken

HUMC claims that this term constitutes an effective transfer of governance rights in

breach of the LLC Agreement. The defendants’ motion as to this issue is also denied

because questions of fact and law foreclose judgment on the pleadings.

FACTUAL BACKGROUND
The background facts are drawn from the parties’ pleadings and the

documents they incorporate by reference. 2

A. The Parties
Hoboken Hospital, Christ Hospital, and Bayonne Medical Center are acute

care facilities located in Hudson County, New Jersey. Each hospital is owned and

operated by a corresponding limited liability company, which this decision refers to

2
OSI Sys., Inc. v. Instrumentarium Corp., 892 A.2d 1086, 1090 (Del. Ch. 2006).

2
respectively as Hoboken Opco, Christ Opco, 3 and Bayonne Opco. 4 Each hospital

leases real estate from a corresponding limited liability company, which this decision

refers to respectively as Hoboken Propco,5 Christ Propco,6 and Bayonne Propco.7

The plaintiffs own “founders’ interests” in the Opcos and Propcos. Of the

long list of plaintiffs, only one is relevant to this decision: Hoboken HUMC, which

owns the founders’ interest in Hoboken Opco.

The equally long list of defendants can be grouped into two categories: the

“MPT Defendants” and the “Eisenreich Defendants.”8 The only MPT Defendant

relevant to this decision is Hoboken MPT, which owns a membership interest in

Hoboken Opco. The Eisenreich Defendants relevant to this decision are Avery

Eisenreich and Alaris, an entity controlled by Eisenreich. Eisenreich indirectly owns

an interest in Christ Opco and is a member of the Christ Propco board of managers.

3
“Christ Opco” is Hudson Hospital Opco, LLC.
4
“Bayonne Opco” is IJKG Opco, LLC, an entity wholly owned by IJKG, LLC.
5
“Hoboken Propco” is MPT of Hoboken Real Estate, LLC.
6
“Christ Propco” is Hudson Hospital Propco, LLC.
7
“Bayonne Propco” is MPT of Bayonne, LLC.
8
The MPT Defendants are: MPT of Hoboken TRS, LLC, MPT of Hoboken Hospital, LLC,
MPT of Hoboken Real Estate, LLC, and MPT of Bayonne, LLC. The Eisenreich
Defendants are: Avery Eisenreich, WTFK Bayonne PropCo, LLC, SB Hoboken PropCo,
LLC, Alaris Health, LLC, and J.C. OpCo LLC.

3
 B. The Governing Provisions
Hoboken HUMC and Hoboken MPT are parties to Hoboken Opco’s LLC

Agreement. 9 Section 10 of that agreement is titled “Transfer of Interest.” Two parts

of Section 10 are relevant to this decision.

First, Section 10.5 grants each member a right of first refusal in the event that

any other member seeks to transfer any of its interests in Hoboken Opco. A member

receiving a qualifying “Offer” under Section 10.5 is obligated to notify Hoboken

Opco’s General Manager, who must then notify the other members. Upon receiving

the notice, the members have fifteen days to exercise the right to “purchase all (but

not less than all) of the Membership Interests proposed to be sold upon the same

terms and conditions stated in the Offer.”10

Second, Section 10.1 restricts the transfer of any governance or financial

rights of a membership interest in Hoboken Opco to any third party, except as

permitted under the agreement.

C. The Sales Process
Beginning in 2018, the hospitals experienced financial difficulties. The

parties to this lawsuit explored strategic alternatives, including a potential sale of

various entities and assets. In September 2019, RWJ Barnabas Health, Inc.

9
Am. Compl. Ex. A.
10
Id. § 10.5(a).

4
(“Barnabas”) expressed interest in acquiring Hoboken Hospital and Christ Hospital

from Hoboken Opco and Christ Opco. Any transaction was contingent upon

negotiating new leases with Hoboken Propco and Christ Propco.

After Barnabas expressed interest in a transaction, Eisenreich became

involved in the negotiations. The plaintiffs allege that Eisenreich led them to believe

that he intended to use his relationship with Barnabas executives to “develop a plan

that would permit Christ Hospital and Hoboken Hospital to seamlessly close on a

transaction with [Barnabas], allow Christ Hospital to meet its interim funding needs

to get to a closing with [Barnabas], and provide Bayonne Medical Center with

significant funds and rent concessions to be able to continue operations while

[Bayonne] searched for a strategic partner.” 11

The plaintiffs further allege that Eisenreich convinced the plaintiffs to turn

over confidential information pertaining to the three hospitals. After receiving the

information, Eisenreich began communicating separately with Barnabas about

interest in a transaction and a new lease with Christ Propco. Eisenreich did not report

the separate negotiations to the other members of the Christ Propco board of

managers. The plaintiffs further allege that Eisenreich “directed representatives of

[Barnabas] not to communicate with any other [Christ] Propco Manager or with any

11
C.A. No. 2019-0972-KSJM, Docket (“Dkt.”) 28, First Am. Verified Compl. (“Am.
Compl.”) ¶ 108.

5
representative of [Christ] Propco concerning new terms for a lease at Christ

Hospital.” 12 Although the other board members reminded Eisenreich that they had

“not consented to anyone speaking with [Barnabas] about the . . . transactions,”

Eisenreich ignored them. 13

D. The First EPA and First Notice
Eisenreich allegedly used the hospitals’ confidential information to engineer

transactions between the MPT Defendants and Alaris. On October 15, 2019, the

Eisenreich Defendants and the MPT Defendants executed a confidentiality

agreement in connection with ongoing discussions of a potential transaction.

Hoboken MPT ultimately determined to accept Alaris’s offer to purchase its

membership interest in Hoboken Opco (the “Membership Interest” and the

“Membership Interest Sale”). The Membership Interest Sale was cross-conditioned

on Alaris purchasing the Hoboken and Bayonne real estate from Hoboken Propco

and Bayonne Propco (the “Real Estate” and the “Real Estate Sales”).14

The package deal was memorialized in an Equity Purchase Agreement dated

October 27, 2019 (the “First EPA”). The First EPA listed a purchase price of

$8,275,000 for the Membership Interest Sale and purchase prices of $50 million and

12
Id. ¶ 215.
13
Id. ¶ 169.
14
Am. Compl. Ex. E §§ 1.1, 8.1(g); Am. Compl. ¶ 122.

6
$58 million for the Real Estate Sales. The First EPA also prevented Hoboken MPT

from approving an amendment to the LLC Agreement “without the prior written

consent of [Alaris].” 15

The defendants closed on the Real Estate Sales on November 5, 2019, before

the defendants notified the plaintiffs of any offer to purchase the Membership

Interest or the existence of the First EPA.

On November 8, 2019, Hoboken MPT sent the plaintiffs an email stating that

they were required to speak with Eisenreich regarding any matters related to the

Membership Interest. This was the first that the plaintiffs caught wind of any

transaction between Hoboken MPT and Eisenreich. The plaintiffs responded by

demanding that Eisenreich provide them with documents pertaining to his putative

interest in Hoboken Opco. Eisenreich refused.

To obtain more information concerning Eisenreich’s dealings, on

November 19, 2019, a member of the Christ Propco board noticed a board meeting

for 2:30 p.m. on November 22, 2019.16 The notice stated that the “nature of the

business to be transacted at the [m]eeting” would include “the status and substance

15
Am. Compl. Ex. E § 5.7.
16
See Dkt. 80, Aff. of Christopher J. Sullivan, Esquire in Supp. of the Eisenreich Defs.’
Mot. for J. on the Pleadings Ex. C. The Court can consider this document for the purposes
of this motion because the Amended Complaint incorporates it by reference. McMillan v.
Intercargo Corp., 768 A.2d 492, 500 (Del. Ch. 2000) (explaining that the Court may
consider “documents integral to or incorporated into the complaint by reference” on a Rule
12(c) motion).

7
of all discussions or negotiations that any Manager of [Christ] Propco (or their

affiliates or representatives) have had or are continuing to have with [Barnabas].” 17

The members of the Christ Propco board demanded to learn from Eisenreich the

substance of his communications with Barnabas.

That same day, Eisenreich sought to delay the meeting. He explained that a

Friday afternoon meeting conflicted with his religious observance of the Jewish

Sabbath. He asked that the meeting be rescheduled for November 26, 2019.

The MPT Defendants used the delay to send notice of the First EPA to

Hoboken HUMC (the “First Notice”). In a notice dated November 25, 2019,

Hoboken MPT wrote:

In accordance with Section 10.5(a) of the LLC Agreement,
[Hoboken] MPT hereby provides notice to [Hoboken
HUMC] . . . that [Hoboken MPT] has received an Offer to
purchase all of its Membership Interest on the terms and
subject to the conditions set forth in the [First EPA].
[Hoboken MPT] requests that [Hoboken HUMC] either (i)
exercise the [right of first refusal] to purchase all of
[Hoboken MPT’s] Membership Interest on the same terms
set forth in the [First EPA] in accordance with Section 10.5
. . . , or (ii) waive the [right of first refusal] by signing this
letter as indicated below. 18

Hoboken HUMC responded to the First Notice by asking Hoboken MPT for

“any offer, term sheet, expression of interest or similar document or communication

17
Id. at 1.
18
Am. Compl. Ex. D, at 1–2.

8
submitted by Alaris Health, Avery Eisenreich or any of their respective affiliates to

purchase any equity interests in [Hoboken] Opco.”19 Hoboken MPT did not respond.

E. The Second EPA and Second Notice
The plaintiffs filed this litigation on December 4, 2019. With their initial

filing, they moved for expedited proceedings and sought a temporary restraining

order to preserve the status quo and enforce Hoboken HUMC’s first-refusal right.

The day after the plaintiffs commenced this litigation, Hoboken MPT

purported to withdraw the First Notice. In response, Hoboken HUMC again sought

information concerning the “facts and circumstances relevant to the bona fide offer

that Hoboken MPT received in connection with what ultimately became the [First]

EPA.” 20

On December 11, 2019, Hoboken MPT and Alaris executed a second Equity

Purchase Agreement (the “Second EPA”), reflecting a purchase price of $8,275,000

for the Membership Interest. The Second EPA did not condition the Membership

Interest Sale on the Real Estate Sales, which had already closed.

That same day, Hoboken MPT sent notice of the Second EPA to Hoboken

HUMC (the “Second Notice”). Hoboken MPT wrote:

[Hoboken MPT] and Alaris have executed a letter
agreement that withdraws and terminates all prior offers
and agreements with respect to Alaris’ purchase of the
19
Am. Compl. ¶ 136.
20
Id. ¶ 160.

9
 Membership Interest. . . . As such, the [Second EPA] is
the only pending offer from Alaris to purchase the
Membership Interest.21

Hoboken MPT further stated:

In accordance with Section 10.5(a) of the LLC Agreement,
[Hoboken MPT] hereby provides notice to [Hoboken
HUMC] . . . that [Hoboken MPT] has received an Offer to
purchase all of its Membership Interest on the terms and
subject to the conditions set forth in the [Second EPA].
[Hoboken MPT] requests that [Hoboken HUMC] either i)
exercise the [right of first refusal] to purchase all of
[Hoboken MPT’s] Membership Interest on the same terms
set forth in the [Second EPA] in accordance with Section
10.5 . . . , or (ii) waive the [right of first refusal] by signing
this letter as indicated below. 22

F. This Litigation
On December 13, 2019, the plaintiffs amended their complaint and sought

another temporary restraining order enjoining any sale under the Second EPA. 23 On

December 23, 2019, the Court entered an order temporarily restraining Hoboken

MPT and Alaris from consummating the Membership Interest Sale and tolling the

fifteen-day period for Hoboken HUMC to respond to the Second Notice.24 The

Court also granted the plaintiffs’ motion to expedite as to four claims:

21
Am. Compl. Ex. G, at 1; see also Am. Compl. Ex. I (letter from Alaris to Hoboken MPT
confirming the “withdrawal and termination of the [First EPA] and any and all Prior
Offers”).
22
Am. Compl. Ex. G, at 1–2.
23
Am. Compl.; Dkt. 30, Pls.’ Mot. for TRO; Dkt. 31, Br. in Supp. of Pls.’ Mot. for
Expedited Proceedings & Mot. for TRO.
24
Dkt. 47, Order Resolving Pls.’ Mot. for a TRO.

10
 • Count I for breach of Hoboken Opco’s LLC Agreement,
asserted against Hoboken MPT;

• Count II for breach of Hoboken Propco’s LLC Agreement,
asserted against MPT of Hoboken Hospital;

• Count IV for breach of Christ Propco’s LLC Agreement,
asserted against Eisenreich;

• Count IX for tortious interference with Hoboken HUMC’s
rights under Hoboken Opco’s LLC Agreement, asserted
against Eisenreich, Alaris, SB Hoboken, and WTFK
Bayonne.25

All defendants filed answers and moved for judgment on the pleadings.26 The

MPT Defendants moved for judgment on the pleadings as to Counts I and II.27 The

Eisenreich Defendants moved for judgment on the pleadings as to Counts IV and

IX. 28 The Court held oral argument on May 28, 2020. 29

25
Dkt. 46, Order Granting Pls.’ Mot. for Expedited Proceedings.
26
Dkt. 81, Answer, Affirmative Defenses & Countercls. of Defs.’ MPT of Hoboken TRS,
LLC, MPT of Hoboken Hospital, LLC, & MPT of Bayonne, LLC; Dkt. 77, The Eisenreich
Defs.’ Answer & Verified Countercls. to Pls.’ First Am. Verified Compl.
27
Dkt. 88, MPT Defs.’ Mot. for J. on the Pleadings; Dkt. 89, MPT Defs.’ Opening Br. in
Supp. of Their Mot. for J. on the Pleadings; Dkt. 181, Pls.’ Answering Br. in Opp’n to the
MPT Defs.’ Mot for J. on the Pleadings with Respect to the Expedited Claims (“Pls.’ MPT
Answering Br.”); Dkt. 189, Defs. MPT of Hoboken TRS, LLC, MPT of Hoboken Hospital,
LLC, & MPT of Bayonne, LLC’s Reply to Pls.’ Answering Br. to Mot. for J. on the
Pleadings (“MPT Defs.’ Reply Br.”).
28
Dkt. 78, The Eisenreich Defs.’ Mot. for J. on the Pleadings; Dkt. 79, The Eisenreich
Defs.’ Br. in Supp. of Mot. for J. on the Pleadings; Dkt. 182, Answering Br. in Opp’n to
the Eisenreich Defs.’ Mot for J. on the Pleadings with Respect to the Expedited Claims;
Dkt. 190, Eisenreich Defs.’ Reply Br. in Further Supp. of Their Mot. for J. on the Pleadings
with Respect to the Expedited Claims.
29
Dkt. 202, Video Conference of the Oral Arg. on the MPT Defs.’ Mot. for J. on the
Pleadings & the Eisenreich Defs.’ Mot. for J. on the Pleadings.

11
 While the defendants’ motion was pending, the parties pressed forward with

expedited discovery. To deliver timely guidance, this decision focuses on Count I,

which concerns the first-refusal right and transfer restrictions under Hoboken Opco’s

LLC Agreement (the “LLC Agreement”). The remainder of the defendants’ motions

will be resolved separately.

LEGAL ANALYSIS
Under Court of Chancery Rule 12(c), a motion for judgment on the pleadings

may be granted where “no material issue of fact exists and the movant is entitled to

judgment as a matter of law.” 30 In deciding a Rule 12(c) motion, the Court may

consider the pleadings and the documents they incorporate by reference.31 The

Court is required to view the facts pleaded and the inferences to be drawn from such

facts in a light most favorable to the non-moving party. 32 However, a “court need

not blindly accept as true all allegations, nor must it draw all inferences from them

in [the non-moving party’s] favor unless they are reasonable inferences.”33

In Count I, Hoboken HUMC claims that Hoboken MPT breached the first-

refusal right and transfer restrictions in the LLC Agreement. “Under Delaware law,

30
Desert Equities, Inc. v. Morgan Stanley Leveraged Equity Fund, II, L.P., 624 A.2d 1199,
1205 (Del. 1993).
31
OSI Sys., 892 A.2d at 1090.
32
Id.
33
In re Lukens Inc. S’holders Litig., 757 A.2d 720, 727 (Del. Ch. 1999) (internal quotation
omitted), aff’d sub nom. Walker v. Lukens, Inc., 757 A.2d 1278 (Del. 2000).

12
the elements of a breach of contract claim are: 1) a contractual obligation; 2) a breach

of that obligation by the defendant; and 3) a resulting damage to the plaintiff.”34

A. The First-Refusal Right
The first-refusal right is found in Section 10.5 of the LLC Agreement. With

bracketed numbers added to aid this analysis, Section 10.5 provides:

Notwithstanding the general restriction to Transfer set
forth in Section 10.1(a) hereof . . . a Member desiring to
Transfer [1] all or any portion of its Membership Interests
(a “Selling Member”) to [2] a Person other than such
Member’s Affiliate or another Member must first
[3] obtain from such person a bona fide written offer to
purchase the Membership Interests, stating that the terms
and conditions upon which the purchase is to be made, and
the consideration offered (the “Offer”).

The recipient of the Offer (the “Offeree”) must [4] notify
the General Manager who will notify the other Members
who will have the right to purchase all (but not less than
all) of the Membership Interests proposed to be sold
[5] upon the same terms and conditions stated in the
Offer. 35

The parties’ principal disputes center on the fourth and the third elements.

Tailored to this case, the first question is whether the scope of a qualifying offer, as

established by the phrase “the same terms and conditions,” encompasses the Real

Estate Sales. The second question is whether a qualifying offer can be withdrawn

such that the Second EPA can replace the First EPA, or whether any letter of intent

34
H-M Wexford LLC v. Encorp, Inc., 832 A.2d 129, 140 (Del. Ch. 2003).
35
Am. Compl. Ex. A § 10.5(a).

13
or term sheet issued prior to the First EPA is the qualifying offer. This decision

refers to these issues respectively as the scope issue and the qualifying-offer issue.

1. The Scope Issue
The parties do not dispute that the deal memorialized in the First EPA

triggered the first-refusal right and that it was a package deal—that is, a sale of both

the Membership Interest and the Real Estate. 36 The parties also do not dispute that

the sales were cross-conditioned in the First EPA. The parties dispute the

implications of the package deal on the scope of the first-refusal right.

Hoboken MPT seeks to limit the scope of the first-refusal right to the

Membership Interest. It argues that Section 10.5 does not expressly encompass any

properties other than the Membership Interest because on its face, Section 10.5

addresses the sale of “Membership Interests” only, and Section 10 as a whole is titled

and concerns “Transfer of Interest.”37

Hoboken HUMC maintains that its first-refusal right encompasses the entire

package deal. It argues that it is entitled to acquire the Membership Interest on the

“same terms and conditions” as the qualifying Offer, and thus it is entitled to

purchase the Real Estate.

36
For the sake of analysis, this section assumes that the First EPA is the operative
qualifying offer, although it is reasonably conceivable that there was a prior qualifying
offer that involved a similar package and involved similar cross-conditions, as discussed
in the next section.
37
Am. Compl. Ex. A § 10 (emphasis added).

14
 Delaware courts apply the objective theory of contracts, giving “words their

plain meaning unless it appears that the parties intended a special meaning.”38 “The

critical issue for the Court to decide . . . is what the shared intentions of the

contracting parties were when they entered the Agreement.”39 In determining the

intention of the parties entering into an agreement, “courts must read the specific

provisions of the contract in light of the entire contract.” 40 “This principle of

construction, known as the whole-text canon, stems from the theory that context is

the primary determinant of meaning.”41

In USA Cable v. World Wrestling Federation Entertainment, Inc., this Court

applied the whole-text canon to derive a rule for determining the scope of a first-

38
Encore Energy P’rs, 72 A.3d at 104.
39
Alliant Techsystems, Inc. v. MidOcean Bushnell Hldgs., L.P., 2015 WL 1897659, at *1
(Del. Ch. Apr. 27, 2015).
40
Chi. Bridge & Iron Co. v. Westinghouse Elec. Co., 166 A.3d 912, 913–14 (Del. 2017);
see Viking Pump, 148 A.3d at 648 (describing that, under Delaware law, a court “will give
priority to the parties’ intentions as reflected in the four corners of the agreement,
construing the agreement as a whole and giving effect to all its provisions” (quoting
Salamone, 106 A.3d at 368)); E.I. du Pont de Nemours & Co. v. Shell Oil Co., 498 A.2d
1108, 1113 (Del. 1985) (“[T]he meaning which arises from a particular portion of an
agreement cannot control the meaning of the entire agreement where such inference runs
counter to the agreement’s overall scheme or plan . . . .”); id. at 1114 (noting that it is a
“cardinal rule of contract construction that, where possible, a court should give effect to all
contract provisions”); see also Borealis Power Hldgs., Inc. v. Hunt Strategic Util. Inv.,
L.L.C., — A.3d — , 2020 WL 2630929, at *5–6 & n.22 (Del. May 22, 2020) (analyzing a
right of first refusal using the plain language approach to contract interpretation and
confining its analysis to the four corners of the relevant contract).
41
See Ray Beyond Corp. v. Trimaran Fund Mgmt., L.L.C., 2019 WL 366614, at *5 (Del.
Ch. Jan. 29, 2019) (internal quotations omitted).

15
refusal right. 42 There, the plaintiff contracted with defendant World Wrestling

Federation Entertainment, Inc. to televise four of the defendant’s narrative wrestling

series (the “Series”). 43 The parties’ agreement contained a first-refusal right that

gave the plaintiff the right to match terms offered by a third party. 44 The defendant

received an offer from a third-party, which included televising the original Series

and much more, such as additional specials, a new drama series, XFL football

coverage, a multi-million dollar advertising campaign, radio syndication, pay-per-

view events, print publishing, and theme park events.45 The defendant notified the

plaintiff of this new offer pursuant to the plaintiff’s first-refusal right, 46 and the

plaintiff purported to match the offer by striking certain elements and accepting

others. 47 The defendant rejected the plaintiff’s proposal, and the plaintiff sued to

enforce the first-refusal right.48

In a reverse of the plaintiffs’ position here, the plaintiff in USA Cable argued

for a narrow interpretation of the first-refusal provision, insisting that its scope only

extended to the subject matter of the existing contract and that the plaintiff thus

42
2000 WL 875682 (Del. Ch. June 27, 2020), aff’d, 766 A.2d 462 (Del. 2000).
43
Id. at *1–2.
44
Id. at *2
45
Id. at *6.
46
Id. at *7.
47
Id.
48
Id.

16
needed only match provisions that were “with respect to the Series.”49 The

defendant argued for a broad interpretation, insisting that the plaintiff was obligated

to match every provision of the qualifying offer.50

In a post-trial decision, the Court adopted the plaintiff’s interpretation,

although it ultimately entered judgment in favor of the defendant. Reading the

agreement as a whole, the Court observed that

it is unreasonable to conclude that a right of first refusal
clause in a contract . . . would require the holder of the
right of first refusal to match a package offer from a third-
party for various properties that vastly exceed the scope of
the property under the contract giving rise to the first
refusal right. Nothing in the record suggests that a
contrary scenario was reasonably in the minds of the
parties at the time of drafting.51

The Court concluded that “[t]he scope of the right is limited to the subject matter of

the Agreement in which the right exists.” 52 The Delaware Supreme Court later

49
Id. at *8.
50
Id.
51
Id. at *9.
52
Id. To be fair, the Court reached its holding regarding the scope of the first-refusal right
after conducting multiple analyses that could each be viewed as sufficient. The Court first
analyzed the plain language of the first-refusal provision, focusing on a phrase that limited
the first-refusal right to arrangements “with respect to any or all of the Series.” Id. at *8–
10. Based in part on the “with respect to” phrase, the Court held that “[t]he holder of the
right of first refusal must match all terms contained in a third party offer directly related to
the Series itself.” Id. at *9 (emphasis added). These included “licensing fees for the Series,
advertising splits for the Series,” and the like; they did not include “the XFL, theme park
events, and motion pictures, for example.” Id. The Court further examined parol evidence
introduced at trial when construing the scope of the first-refusal right. Id. at *12. Without
17
affirmed the trial court’s decision.53

This decision adopts the well-reasoned rule of USA Cable, which is that the

scope of a first-refusal right shall be construed as limited to the subject matter of the

agreement containing the right, unless the parties expressly agree otherwise.54

Under the rule of USA Cable, the MPT Defendants’ restrictive interpretation

is the only reasonable one. At base, it is unreasonable to conclude that the parties to

the LLC Agreement intended Section 10.5 to extend to any unburdened property

included in a package deal, such as the Real Estate. This conclusion stems from the

nature and content of the agreement in question. Under the Delaware LLC Act, a

limited liability company agreement is “any agreement . . . written, oral, or implied,

of the member or members as to the affairs of a limited liability company and the

diminishing the significance of these additional analyses, I find the application of the
whole-text canon independently persuasive and generally applicable.
53
See 766 A.2d at 465–68.
54
The parties’ dispute over the implications of a package deal on the scope of a first-refusal
right is not new; this issue has vexed many courts before this one. See generally Bernard
Daskal, Note, Rights of First Refusal and the Package Deal, 22 Fordham Urb. L.J. 461
(1995) [hereinafter Package Deal] (describing the problems posed by the package deal in
the first-refusal right context and collecting cases and secondary sources on this issue).
Although at least one court has concluded that the right holder “is entitled to specific
performance on the entire package,” that outcome has been criticized. Id. at 490; see also
USA Cable, 766 A.2d at 468. The author of Package Deal reports that the majority of
courts considering this issue have awarded “the right holder specific performance on the
burdened property alone.” Package Deal at 469–70. Thus, USA Cable falls in line with
what seems to be the majority rule. I qualify this statement with the phrase “what seems
to be,” because my conclusion stems from a note published in 1995 found through
independent research. The parties are free to brief this issue in future submissions if they
believe that the exercise would be worthwhile.

18
conduct of its business.”55 It “provides the basic organizational structure for a

Delaware limited liability company” 56 and governs the “entity’s internal affairs,”

including the relationship among the LLC and its members. 57 It would be

unreasonable for members to include within an LLC Agreement a first-refusal right

extending to property neither owned by the LLC nor any of its members, as the

plaintiffs’ theory would require. The plaintiffs cite to no case that reached this

conclusion.

To be sure, the plaintiffs attempt to characterize the Real Estate as within the

subject matter of the LLC Agreement. The plaintiffs observe that the LLC

Agreement contemplates that Hoboken Opco could hold real property related to

Hoboken Hospital 58 and that the “lease” of the real estate is mentioned several times

in the LLC Agreement. 59 But whether Hoboken Opco could one day own real estate

does not render the Real Estate within the subject matter of the agreement. And the

reference to a “lease” reflects a legal relationship between Hoboken Opco and a

55
6 Del. C. § 18-101(9) (emphasis added).
56
Robert L. Symonds Jr. & Matthew J. O’Toole, Symonds & O’Toole on Delaware Limited
Liability Companies, § 4.01[C] at 4-11 (2d ed. 2017).
57
Id.
58
Pls.’ MPT Answering Br. at 31.
59
Id. at 32 (citing Am. Compl. Ex. A ¶ 1 at 7).

19
third-party regarding the Real Estate, a relationship that is the subject matter of a

separate agreement, i.e., the referenced “lease.”

Although this decision adopts a narrow interpretation of the scope of the first-

refusal right, the package deal nevertheless cuts against Hoboken MPT in ways

sufficient to foreclose judgment on the pleadings. The main problem is that the

nature of the package deal prevents the Court from isolating the “terms and

conditions” in the First EPA that are specific to the Membership Interest Sale. It is

reasonably conceivable that the Real Estate Sales affected the terms and conditions

of the Membership Interest Sale. The First EPA presents them as part of a package

deal, and they were negotiated as such. By packaging them as a single deal, the

defendants obscured the Court’s ability to determine which terms and conditions

need to be matched.

It is reasonably conceivable that Alaris tied its valuation of the Membership

Interest to the value of owning both the Membership Interest and the Real Estate. It

is also reasonably conceivable that the parties allocated the total price for all of the

assets not based on the underlying value of each asset, but based on considerations

that were affected by the nature of the package deal. For example, in order to

optimize tax or other benefits, it is reasonably conceivable that Alaris allocated a

portion of the purchase price to the Membership Interest that exceeded the

underlying value of the Membership Interest. In effect, Alaris could maximize the

20
value of the total package irrespective of the value of its contents by overpaying for

one asset and underpaying for the others. Thus, whether the $8,275,000 purchase

price reflects the true value of the Membership Interest by itself is a disputed issue

of fact that is not properly resolved on a motion for judgment on the pleadings.

2. The Qualifying-Offer Issue
The MPT Defendants seek to avoid the complications arising from the

package deal by arguing that the operative offer is the Second EPA, which included

only the Membership Interest Sale and not the Real Estate Sale. They say that the

First EPA was abandoned and the First Notice was withdrawn. The plaintiffs

respond that the First Notice created an option contract that could not be withdrawn

during the fifteen-day period set forth in Section 10.5. They alternatively argue that

neither the First EPA nor the Second EPA is a qualifying offer because neither are

offers; rather, both are fully executed agreements. They say that it is reasonably

conceivable that some qualifying offer predated the First EPA and that Hoboken

MPT breached its first-refusal obligations by failing to timely notice that qualifying

offer pursuant to Section 10.5.

21
 As a matter of black-letter law, an offeror may withdraw its offer before

acceptance.60 Option contracts are an exception to the general rule.61 Courts

disagree as to whether a first-refusal right, once triggered by a qualifying offer, gives

rise to a revocable offer or creates an irrevocable option for the duration of the

exercise period.62 According to the MPT Defendants, Delaware law has not resolved

this issue. They urge the Court to follow LIN Broadcasting Corp v. Metromedia,

Inc., 63 in which a New York court concluded that first-refusal provisions permit

revocable offers and should not be construed as option contracts.

In LIN Broadcasting, the potential seller revoked an offer made pursuant to a

first-refusal provision after the third-party buyer revoked the qualifying offer.64 The

60
Montray Realty Co. v. Arthurs, 105 A. 183, 186 (Del. 1918) (“It is fundamental law that
an offer may be revoked at any time before acceptance.”); Restatement (Second) of
Contracts § 36(1)(c) (Am. Law Inst. 1981) (explaining that an offeree’s power of
acceptance may be terminated by “revocation by the offeror”); id. § 42 (“An offeree’s
power of acceptance is terminated when the offeree receives from the offeror a
manifestation of an intention not to enter into the proposed contract.”).
61
Walsh v. White House Post Prods., LLC, 2020 WL 1492543, at *5 (Del. Ch. Mar. 25,
2020) (collecting authorities on common law rule and describing option contract
exception); 1 Williston on Contracts § 5.16 (4th ed. 2020) (“Williston”) (“Although an
option contract is by definition binding as a contract, it is also an offer, and like other offers,
its terms must be accepted in order to make the main contract binding.”).
62
1 Farnsworth on Contracts § 3.29, at 3-209 (4th ed. Supp. 2019) (“Farnsworth”)
(“Courts have disagreed as to whether a right of first refusal, once triggered by a third
party’s offer, gives a power to make a contract that survives even if the transaction with
the third party is abandoned.” (citing LIN Broadcasting and noting inconsistency among
state courts)).
63
542 N.E.2d 629 (N.Y. 1989).
64
Id. at 632. The seller and third-party offeror had reached a final agreement in LIN
Broadcasting, and the parties did not dispute that this final agreement triggered the first-
22
holder of the first-refusal right nevertheless purported to exercise its right and sought

specific performance. 65 The right holder argued “that a first refusal offer, once

made, is irrevocable for the period specified in the first refusal clause.” 66 In rejecting

that argument, the court reasoned that the purpose of a first-refusal right is not served

by treating the right as an option contract:

The obvious effect of the right of first refusal is to give to
the nonselling party a power to control and restrict the
other party’s right to sell to a third party. The clause itself
operates as a restriction by preventing a party from making
a sale without first making the first refusal offer. When,
as here, the selling party has fully complied with its
obligations under the first refusal clause by not selling
without first making the required offer, the nonselling
party has received the bargained-for performance. The
intended effect of the clause as a means of restricting or
preventing a sale to a third party has been realized. There
is no basis for requiring the selling party to render more
than its promised performance, as LIN would have us do,
by keeping the offer open for the period specified in the
first refusal clause, thus giving the first refusal offer all of
the attributes of an option.67

Put differently, the purpose of a first-refusal provision is to prohibit the transfer of

property absent compliance with the provision. The purpose is not to force the owner

to sell.

refusal right. Id. They did not litigate whether the plaintiff right holder was entitled to
notice of a more preliminary qualifying offer. Id.
65
Id.
66
Id. at 633.
67
Id.

23
 At this stage, the parties have not sufficiently briefed the merits of following

LIN Broadcasting. The MPT Defendants first cited LIN Broadcasting in their reply

brief, so the plaintiffs did not have a chance to respond in briefing. 68 Further,

Farnsworth teaches that state laws are not in accord on this issue. 69

Even assuming that this Court were to follow LIN Broadcasting, there is a

factual dispute as to whether the qualifying offer was withdrawn. The plaintiffs

contend that Hoboken MPT and Alaris partially performed under the terms of the

First EPA by closing on the Real Estate Sales on November 5, 2019. It is reasonably

conceivable that any efforts to disentangle the package deal through the Second EPA

were undertaken with an eye toward this litigation. 70 Thus, a question of fact

remains as to whether the Second EPA reflects the true “terms and conditions” of

the Membership Interest Sale.

The plaintiffs raise another question concerning the qualifying-offer issue.

They argue that neither the First EPA nor the Second EPA qualifies as an offer

because both are final, executed agreements and not offers.

68
MPT Defs.’ Reply Br. at 3.
69
Farnsworth § 3.29, at 3-209.
70
See Union Oil Co. of Cal. v. Mobil Pipeline Co., 2006 WL 3770834, at *13 n.58 (Del.
Ch. Dec. 15, 2006) (“The law is clear that when a first refusal right is involved, all deal
terms must be commercially reasonable, imposed in good faith, and not specifically
designed to defeat the preemptive right.”).

24
 Generally, an offer triggering a first-refusal right is one that the seller receives

and intends to accept. 71 To identify a qualifying offer, a court must determine

whether the seller intended to accept the offer. If a seller intends to accept the

qualifying offer, the seller may not do so prior to honoring the first-refusal right.72

It is “a violation of duty for [the seller] to make a contract to sell on any terms, even

though the contract is expressly made ‘subject to’ the [first-refusal right]. If the

court should hold otherwise, it would thereby extract most of the ‘teeth’ of [the first-

refusal] right.” 73 Thus, a qualifying offer is necessarily something short of a binding

agreement.

The LLC Agreement defines “Offer” as a “bona fide written offer to purchase

the Membership Interests, stating the terms and conditions upon which the purchase

is to be made.” 74 Breaking it down, the defined term Offer means an offer that (1)

71
Corbin § 11.3, at 468–69 (a qualifying offer in the context of a first-refusal right is an
offer that a seller intends to accept).
72
Williston § 67:89 (noting the first-refusal right “limits the right of the owner to dispose
freely of its property by compelling the owner to offer it first to the party who has the first
right to buy. Nor may the owner accept an offer made by a third party” (emphasis added));
Corbin § 11.4, at 489 (explaining that a first-refusal right is “a right that the [holder] shall
be given an option to buy before any other offer is made or accepted” (emphasis added)).
73
Corbin § 11.3, at 480; see also id. (explaining that an owner’s “acceptance of that offer
without first offering to [the right holder] on the same terms is a breach”); Kaplan v. Beach
Dev. Corp., 1988 WL 55324, at *5 (Del. Super. May 23, 1988) (noting that a first-refusal
right required the sellers “not to accept an offer for the purchase of [the property] made to
it by a third party”).
74
Am. Compl. Ex. A § 10.5(a).

25
is “bona fide,” (2) is in writing, (3) seeks to purchase Membership Interests, and

(4) “states the terms and conditions upon which the purchase is to be made.” 75 Of

these four elements, the second and third are not disputed. The first and fourth

require further examination. One legal dictionary defines “bona fide offer” as “[a]n

offer that creates a binding contract upon acceptance” or “a valid offer made in good

faith, [which] is an offer that is sufficient to bind both parties if it is accepted.”76

Under general principles of contract law, an offer made “in good faith” is one that is

not designed “for the purpose of inducing a rejection.”77 For an offer to be “binding

upon acceptance,” it must contain sufficiently definite terms. 78 In this latter sense,

the definition of “bona fide offer” informs the meaning of the fourth element. That

75
Id.
76
Bona Fide Offer, Wolters Kluwer Bouvier Law Dictionary (2012) (“A bona fide offer
must be made in good faith with the intent that it be honored if accepted, be made in clear
and unambiguous terms by a party ready, willing, and able to perform its promise in a
timely manner, offering appropriate value in its offer for the promise sought from the
offeree, and without conditions of duress, fraud, or misrepresentation.”).
77
Corbin § 11.3, at 482. Cf. Restatement (Second) of Contracts § 26 (“A manifestation of
willingness to enter into a bargain is not an offer if the person to whom it is addressed
knows or has reason to know that the person making it does not intend to conclude a bargain
until he has made a further manifestation of assent.”).
78
Restatement (Second) of Contracts § 33(1) (“Even though a manifestation of intention is
intended to be understood as an offer, it cannot be accepted so as to form a contract unless
the terms of the contract are reasonably certain.”); id. § 33(2) (“The terms of a contract are
reasonably certain if they provide a basis for determining the existence of a breach and for
giving an appropriate remedy.”); see Eagle Force Hldgs., LLC v. Campbell, 187 A.3d
1209, 1232 (Del. 2018) (adopting Restatement (Second) of Contracts § 33 for determining
whether terms of offer are “sufficiently definite”).

26
is, for an offer to be “bona fide,” it must state sufficiently definite “terms and

conditions.”79

Putting it all back together, the defined term “Offer” means something that

the seller intends to accept but had not yet accepted. It means an offer, made in

writing, to purchase at least some Membership Interests, which the third party makes

to induce acceptance rather than rejection, and which states sufficiently definite

terms and conditions so as to be binding upon acceptance. As the plaintiffs argue,

this definition could conceivably include a letter of intent or preliminary term sheet,

provided that the document contains sufficiently definite terms and otherwise meets

the definition of an Offer. 80 This definition does not foreclose the seller and third-

party from negotiating the terms of an offer before the first-refusal right is triggered;

to the contrary, it requires it.

79
The MPT Defendants appear to argue that this definition must be construed to require
that all terms of the agreement be reduced to writing, including provisions such as choice
of law and forum. They rely on this Court’s holding in USA Cable that such provisions
were “undoubtedly material.” 2000 WL 875682, at *19. The court in USA Cable, however,
made that finding post-trial upon a fully developed record, not on a motion for judgment
on the pleadings.
80
The plaintiffs argue that their interpretation of “Offer” finds support in an agreement
signed by the same parties contemporaneously with an amendment to the LLC Agreement.
That document, the LLC Agreement of Hoboken Propco, defines “bona fide written offer”
to include “a binding or non-binding letter of intent, term sheet, proposal, or [written
evidence] otherwise outlining the proposed terms of a bona fide offer.” Am. Compl. Ex.
B. § 6(a).

27
 Applying this definition to the facts of this case, it should be obvious that there

are many factual disputes foreclosing judgment on the pleadings as to what

constitutes the operative qualifying offer. The MPT Defendants argue that, under

the definition of “Offer,” the First EPA was the first qualifying offer triggering the

first-refusal right because it was the first offer that the MPT Defendants intended to

accept.

The MPT Defendants might ultimately prove that contention true, and it is

possible that the First EPA is the earliest qualifying Offer. At this stage, the Court

cannot accept the moving party’s factual contentions as true if reasonable inferences

can be drawn in the non-moving party’s favor. 81 It is reasonably conceivable that

the First EPA is a final, memorialized contract, not a bona fide offer. The plaintiffs

allege that the agreement appears to have been signed and thus accepted. 82 They

allege that the parties began performing aspects of the First EPA before the First

Notice was delivered, as suggested by the fact that defendants closed on the Real

Estate Sales that were a condition precedent to closing under the First EPA. They

further allege that aspects of the First EPA were intended to bind Alaris immediately,

such as Alaris’s consent right discussed in the next section and Alaris’s agreement

81
OSI Sys., 892 A.2d at 1090.
82
The MPT Defendants raise a factual dispute by contending that neither the First EPA nor
the Second EPA were fully executed agreements. See MPT Defs.’ Reply Br. at 11–12.
But the Court cannot take defendants’ word for it, as factual disputes must resolve in the
plaintiffs’ favor for the purpose of this motion. OSI Sys., 892 A.2d at 1090.

28
to indemnify Hoboken MPT for any lawsuit concerning the first-refusal right.83

These allegations make it reasonably conceivable that the First EPA was not a

qualifying offer, but rather, a binding agreement.

It is further reasonably conceivable that some written document reflecting the

sufficiently definite terms was created at an earlier time. In fact, the Eisenreich

Defendants admit in their Brief in Opposition to Plaintiffs’ Motion for a Temporary

Restraining Order and Expedited Proceedings that “[i]n October of 2019, Alaris and

[Hoboken MPT] entered into a letter of intent at the request of Alaris pursuant to

which Alaris offered to purchase [the Membership Interest].” 84 Thus, the plaintiffs

have identified questions of fact regarding whether some written document

evidencing the material terms of a qualifying offer was created prior to the First

EPA. The existence of this document could have implications for the triggering of

the first-refusal right. 85

83
Am. Compl. Ex. E § 11.2 (stating that Alaris will indemnify Hoboken MPT for “any
claims, demands, causes of action, or proceedings by [Hoboken HUMC] which arises out
of or relates solely to the transactions contemplated in this Agreement or the Purchase
Agreements”).
84
Dkt. 38 at 8.
85
The plaintiffs also argue that Section 10.5 contains implicit timing requirements
necessitating notice prior to closing. Pls.’ MPT Answering Br. at 33–35. They argue that
this implied notice provision required Hoboken MPT to deliver the First Notice prior to
closing on the package deal. I agree that Section 10.5 requires that notice be given before
an aspect of the qualifying offer is accepted by performance of otherwise. See Corbin §
11.3, at 492–93 (suggesting that the “right to receive notice of a third-party offer” is a
“distinct legal right . . . included in” first-refusal right); id. (reasoning that “where the
29
 B. The Transfer Restrictions
Section 10.1 provides that “no Member shall make, permit or suffer any

Transfer of all or any portion of his/its Membership Interest ([sic] or any governance

rights or financial rights, voluntarily, by operation of law, or otherwise, except where

the same is expressly required or permitted under this Agreement.” 86

Hoboken HUMC claims that Hoboken MPT breached Section 10.1 of the

LLC Agreement by providing consent rights to Alaris concerning amendments to

the LLC Agreement. The First EPA specifically provides that Hoboken MPT may

not consent to any amendments to the LLC Agreement “without the prior written

consent of [Alaris].” 87 The plaintiffs further allege that Hoboken MPT “advised in

writing . . . that Plaintiffs were required to speak to Eisenreich (not the MPT

Defendants) in connection with Hoboken MPT’s interest in [Hoboken] Opco.”88

Hoboken HUMC’s claim raises interesting questions of law that the parties

have not briefed, such as whether the transfer of consent rights of this nature

constitutes a transfer of governance rights. Although Section 10.1 is specifically

identified in the Amended Complaint, 89 the MPT Defendants did not address

grantor is trying to evade a duty under the right of first refusal, there may be no such
communication”). The implications of this holding can be developed at a later stage.
86
Am. Compl. Ex. A § 10.1(a).
87
Am. Compl. ¶ 148.
88
Id. ¶ 184.
89
Id. ¶ 148.

30
Section 10.1 in their opening brief. This is a sufficient basis to deny the defendants’

motion for judgment on the pleadings as to Hoboken HUMC’s claim for breach of

Section 10.1.

Open questions of fact provide another basis for denying the motion. In their

reply brief, the MPT Defendants argue that they are entitled to judgment on the

pleadings on this issue because the First EPA was withdrawn and the Second EPA

has not been consummated as a consequence of the temporary restraining order.90

As discussed above, however, questions of fact remain as to whether the First EPA

was actually withdrawn and replaced by the Second EPA. For these reasons,

judgment on the pleadings as to this aspect of Count I is denied.

CONCLUSION
In sum, the plaintiffs have raised issues of disputed fact sufficient to avoid

judgment on the pleadings. A question of fact remains as to what constituted a

qualifying Offer and whether there was a qualifying Offer prior to the First EPA.

Even if the First EPA is the first qualifying Offer, a question of law remains as to

whether the first-refusal right issued in connection with the First EPA could be

withdrawn, and a question of fact remains as to whether it was actually withdrawn.

Questions of fact also remain on the scope issue concerning the terms and conditions

applicable to the Membership Interest Sale. It cannot be determined on the pleadings

90
MPT Defs.’ Reply Br. at 13–14.

31
whether the First EPA or any prior qualifying offer properly valued the Membership

Interest or whether that value was infected by the different components of the

package deal. It is also difficult to isolate other material terms relevant to the

Membership Interest Sale given that the deal was negotiated as a package deal.

Finally, questions of law and fact remains as to the claim for breach of the transfer

restrictions.

For these reasons, the MPT Defendants’ motion as to Count I is DENIED.

32