COURT OF CHANCERY
OF THE
STATE OF DELAWARE
TAMIKA R. MONTGOMERY-REEVES Leonard L. Williams Justice Center
VICE CHANCELLOR 500 N. King Street, Suite 11400
Wilmington, Delaware 19801-3734
August 22, 2017
Martin S. Lessner, Esquire Kevin G. Abrams, Esquire
James P. Hughes, Esquire John M. Seaman, Esquire
Tammy L. Mercer, Esquire E. Wade Houston, Esquire
Richard J. Thomas, Esquire Abrams & Bayliss LLP
Young Conaway Stargatt & Taylor, LLP 20 Montchanin Road, Suite 200
1000 North King Street Wilmington, DE 19807
Wilmington, DE 19801
Brock E. Czeschin, Esquire
Nicholas R. Rodriguez, Esquire
Anthony M. Calvano, Esquire
Richards Layton & Finger, P.A.
920 North King Street
Wilmington, DE 19801
RE: Southpaw Credit Opportunity Master Fund, L.P. v. Roma
Restaurant Holdings, Inc. et al., C.A. No. 2017-0432-TMR
Dear Counsel:
Plaintiffs move under Court of Chancery Rule 60(b) for relief from this
Court’s May 30, 2017 order in light of intervening facts since that date. On May
30, 2017, this Court ordered that the properly constituted board of Roma
Restaurant Holdings, Inc. (“Roma”) included Howard Golden, Bradley Scher, and
Stephen K. Judge. The Court did not decide the validity of the Roma 2016 Long
Southpaw Credit v. Roma Restaurant
C.A. No. 2017-0059
August 22, 2017
Page 2 of 4
Term Incentive Plan (“LTIP”) or the challenged stock grants associated with that
plan because Defendants refused to defend the validity of the plan. In the May 30,
2017 order, the Court “retain[ed] jurisdiction to hear any application or claim for
attorneys’ fees on a schedule to be agreed upon by the parties or ordered by the
Court.” On July 20, 2017, Roma stockholder Highland Select Equity Fund, L.P.
(“Highland”), whose appointees to the Roma board included Defendants, filed a
separate action under Section 225 of the DGCL disputing the current membership
of the Roma board and presenting the issue of the validity of the LTIP to the Court
again (the “Highland Action”).
Defendants assert that the May 30, 2017 order was not a final judgment or
order and that Rule 60(b) does not apply because the Court retained jurisdiction to
hear an application or claim for attorneys’ fees. I agree. See In re Appraisal of
Dell Inc., 2016 WL 6069017, at *18 (Del. Ch. Oct. 17, 2016) (“The Delaware
Supreme Court ‘consistently has held that a judgment on the merits is not final
until an outstanding related application for an award of attorneys fees has been
decided.’” (quoting Del. Bay Surgical Servs., P.A. v. Swier, 869 A.2d 327 (Del.
2005) (Table))). Under Court of Chancery Rule 54(b), an order of this Court that
does not dispose of all of the claims and the rights and liabilities of all of the
Southpaw Credit v. Roma Restaurant
C.A. No. 2017-0059
August 22, 2017
Page 3 of 4
parties “is subject to revision at any time before the entry of judgment adjudicating
all the claims and the rights and liabilities of all the parties.” Ct. Ch. R. 54(b). A
federal court interpreting the nearly identical federal rule stated that “[t]he standard
for granting a motion to vacate under Rule 54(b) is less rigid than that under Rule
60(b) . . . .” Gallant v. Telebrands Corp., 35 F. Supp. 2d 378, 394 n.16 (D.N.J.
1998). While orders should not be modified without good cause (see Washington
v. Preferred Commc’n Sys., Inc., C.A. No. 10810-VCL (Sept. 10, 2015) (ORDER)
(granting a Rule 54(b) motion and noting that good cause existed to modify the
order)), the Court is “under no stricture to comply with the requirements of Rule
60(b)” in modifying an interlocutory order. Farr Man & Co. v. M/V Rozita, 903
F.2d 871, 875 (1st Cir. 1990).
Highland—whose managing director is Defendant Scott Wilson and whose
other appointee to the Roma board is Defendant Kenneth Reimer—now seeks to
place Reimer and Wilson on the Roma board in a separate action by relying on the
validity of the LTIP. This Court relied on Wilson and Reimer’s refusal to defend
the LTIP in entering the May 30, 2017 order. Further, determining the validity of
the LTIP in this litigation as opposed to the Highland Action will conserve both the
parties’ and the Court’s resources. Thus, the Court vacates the May 30, 2017 order
Southpaw Credit v. Roma Restaurant
C.A. No. 2017-0059
August 22, 2017
Page 4 of 4
under Rule 54(b) for good cause. The parties may stipulate to a trial on a paper
record regarding the validity of the LTIP.
Sincerely,
/s/ Tamika R. Montgomery-Reeves
Tamika R. Montgomery-Reeves
Vice Chancellor
TMR/jp