Alpha Holdings, Inc. v. Chris Kim

• Court: Court of Chancery of Delaware
• Decided: August 21, 2018
• Docket: CA No. 2018-0283-SG
• Status: Published

Opinion

COURT OF CHANCERY OF THE SAM GLASSCOCK III STATE OF DELAWARE COURT OF CHANCERY COURTHOUSE VICE CHANCELLOR 34 THE CIRCLE GEORGETOWN, DELAWARE 19947

Date Submitted: August 9, 2018 Date Decided: August 21, 2018

J. Peter Shindel, Jr., Esquire R. Bruce McNew, Esquire Daniel J. McBride, Esquire Christopher H. Lee, Esquire Abrams & Bayliss LLP Cooch & Taylor, P.A. 20 Montchanin Road, Suite 200 1000 West Street, 10th Floor Wilmington, Delaware 19807 Wilmington, Delaware 19899

Sean M. Brennecke, Esquire Klehr Harrison Harvey Branzburg LLP 919 Market Street, Suite 1000 Wilmington, Delaware 19801

Re: Alpha Holdings, Inc. et al. v. Chris Kim et al., Civil Action No. 2018-0283-SG

Dear Counsel:

This matter is scheduled for trial in November on a subset of the issues raised

in the Complaint, composed of the contractual issues raised in Counts I and II. In

rather lengthy telephone and office conferences, I have attempted, unsuccessfully,

to give the parties guidance on how the short time remaining before trial should be

used. At an office conference of July 19, 2018, I had an extended discussion with

counsel about issues they had been unable to resolve in connection with a pretrial

scheduling order, a discussion occupying, I find, twenty-eight pages of reported

transcript. By the conclusion of that effort, I believed the substantive issues had been resolved; I left it to the parties, however, to act in the tradition of the Delaware

bar to resolve practical issues without Court intervention, and to provide a stipulated

form of order. In pursuing that case management strategy, I was unwise.

I have attempted to review the parties’ proposed versions of an appropriate

scheduling order on the expedited matters. The disagreements are pervasive.

As I have tried to convey, unsuccessfully, litigation in this forum is bounded

by rules, but those rules assume that norms of behavior, implicitly followed, will

inform actions of counsel. Without the norms, the rules are impotent. One of the

perhaps underappreciated keys to the success of Delaware as a litigation forum is

the strength of the traditions of our bar, and the extent to which even hard-fought

litigation is self-cabined by respect for these traditions and norms, and of counsel

for one another.

I will not repeat here some of the picayune disputes in the competing

scheduling orders, because there are legitimate differences between the parties that

it was appropriate to submit to me, and which I deal with here. I granted expedition

on the contract issues because it appeared to me that complete relief, should the

Plaintiffs prevail, likely depended upon it. I declined to enter a stay of other

discovery in the case, leaving it to the discretion of counsel to decide how to proceed

on such non-expedited discovery in light of the demands of the impending

2 November litigation, and in light of the benefits of avoiding duplicate discovery that

a stay might compel. Again, this has proved unwise.

Accordingly, I am staying discovery on all issues except those necessary to

the trial of Counts I and II. This includes a stay of further discovery from Defendant

Thomas Jefferson University and of the “mismanagement” or “receivership” issues,

with the exception that the Plaintiffs may seek the bank records of Viral Gene. Any

party may seek to lift this stay before the November trial, but the stay will not be

disturbed absent good cause shown.

With this directive, it should be possible for the parties to confer and agree on

a sensible schedule to prepare this matter for trial on a paper record scheduled for

November 16, 2018. Accordingly, the parties should submit a stipulated order

governing the expedited proceedings by 4:00 p.m. on August 24, 2018. The order

should provide for completion of briefing on the Defendants’ motion to dismiss

limited to the allegations of Counts I and II. It should omit, however, pre-trial

briefing, which I will forgo in the interests of expedition and in recognition of the

limited issues presented. Given the exigencies of time, I will either decide the

motion to dismiss on the papers promptly, or defer consideration until after argument

on November 16, as I find appropriate on review of the briefs.

In the alternative, should the parties be unable to come to an agreement on a

stipulated order, they should each provide a comprehensive form of order governing

3 the pretrial proceedings. It is my intention, in that case, to enter in its entirety the

form of order that best comports with the guidance of this Court in past office

conferences and this Letter Order, the exigencies of the upcoming litigation, and the

norms and traditions of the Delaware bar, and without modification by the Court

other than for the Court’s convenience.

To the extent the foregoing requires an Order to take effect, IT IS SO

ORDERED.

Sincerely,

/s/ Sam Glasscock III

Sam Glasscock III