Indeck North American Power Fund, L.P. v. Norweb PLC

735 N.E.2d 649, 316 Ill. App. 3d 416, 249 Ill. Dec. 45
CourtAppellate Court of Illinois
DecidedJune 30, 2000
Docket1-99-1809
StatusPublished
Cited by59 cases

This text of 735 N.E.2d 649 (Indeck North American Power Fund, L.P. v. Norweb PLC) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Indeck North American Power Fund, L.P. v. Norweb PLC, 735 N.E.2d 649, 316 Ill. App. 3d 416, 249 Ill. Dec. 45 (Ill. Ct. App. 2000).

Opinion

JUSTICE HARTMAN

delivered the opinion of the court:

This case involves two purchase and sale agreements and preexisting partnership agreements through which various partnerships, which owned and operated electric generating power plants, intended to convey their interests to other partnerships wishing to purchase them. Preexisting partnership rights {i.e., first refusal, denial of permission to sell, and designated other purchaser), owned by another entity not involved in the purchase and sale were exercised by that entity prior to the closing of the purchases, thereby preventing the subject sale. Instead, the sales of the plants were made to a purchaser designated by the noncontracting partner.

The putative purchasers under the purchase and sale agreement, plaintiffs Indeck North American Power Fund, L.E, Indeck Auburn-dale, L.L.C., and Indeck Gordonsville, L.L.C. (collectively Indeck(s)), appeal from the order of the circuit court granting summary judgment in favor of the putative sellers, defendants Norweb pic (a public limited company registered in England and in Wales), Norweb Power Services (No 1) Limited, and Northern Hydro Limited (collectively Norweb(s)), on Indeck(s)’ breach of contract and equitable estoppel claims, under section 2 — 1005 of the Code of Civil Procedure (Code) (735 ILCS 5/2— 1005 (West 1996)) (section 2 — 1005) and dismissing with prejudice In-deck(s)’ tortious interference with contract and civil conspiracy claims asserted against third-party and ultimate purchasers, defendants Cal-pine Auburndale, Inc., and Calpine Gordonsville, Inc. (collectively Calpine(s)), pursuant to section 2 — 615 of the Code (735 ILCS 5/2— 615 (West 1996)) (section 2 — 615). The noncontracting partner, the Mission Entities (Mission(s)) 1 also sued by Indeck(s), settled their differences with Indeck(s) and are not parties to this appeal.

Under the two purchase agreements, Norweb(s) intended to convey to Indeck(s) their general partnership interests in two limited partnerships, Auburndale Power Partners (Auburndale) and Gordonsville Energy (Gordonsville), for an amount in excess of $40 million. Mission(s) were preagreement general partners with Norweb(s) in the Auburndale and Gordonsville limited partnerships. Mission(s) exercised their preexisting partnership rights of first refusal and denial of permission to sell and designated Calpine(s) as purchasers of the subject partnership interests instead. Norweb(s) thereafter sold their interests to Calpine(s). Indeck(s) instituted this action, with the results noted above.

Indeck(s) present as issues on appeal whether the circuit court erred in granting (1) Norweb(s)’ section 2 — 1005 motion for summary judgment on Indeck(s)’ contract claims; (2) summary judgment in favor of Norweb(s) on Indeck(s)’ equitable estoppel claims; (3) Cal-pine(s)’ section 2 — 615 motion to dismiss and dismissing with prejudice Indeck(s)’ tortious interference with contract claims; and (4) in dismissing with prejudice Indeck(s)’ civil conspiracy claims.

On March 28, 1996, Norweb(s) announced their intention to sell their 50% general partnership interests in the Auburndale and Gordonsville limited partnerships, which own and operate power generation facilities in Florida and Virginia, respectively. Auburndale was a partnership consisting of Norweb Power (a 50% general partner) and Mission(s)’ El Dorado (a 1% general partner) and Devereaux (a 49% limited partner). Gordonsville was a partnership consisting of Nor-web(s)’ Northern Hydro (a 50% general partner) and Mission(s)’ Rapidan (a 1% general partner) and Madison (a 49% general partner).

In July 1996, Norweb(s) caused an information memorandum to be sent to potential qualified bidders, including Indeck(s), inviting bids in connection with Norweb(s)’ intended sale of their partnership interests in Auburndale and Gordonsville. Prospective bidders were advised by Norweb(s) that the transfers of their partnership interests in both Auburndale and Gordonsville were subject to the rights of first refusal, denial of permission to sell, and designated purchaser held by the existing general partners of each partnership.

It was at this procedural juncture, according to Indeck(s), that Mission(s) and Calpine(s) concocted a scheme to skew the entire procedure in favor of purchase by Calpine(s), in return for Mission(s)’ refusal to consent to the sale and designation of Indeck(s) as purchaser, in return for a $7 million payment to Mission(s) by Calpine(s). As other potential bidders were evaluating Norweb(s)’ offering materials, Calpine(s) and Mission(s) discussed “partnering” on acquiring Nor-web(s)’ sale assets and planned for Calpine(s) to acquire Norweb(s)’ interests in the Auburndale and Gordonsville plants by agreeing not to bid on them in Norweb(s)’ bidding process. Instead, Mission(s) would designate Calpine(s) as purchaser under their rights in the partnership agreements once Norweb(s) had entered into contracts to sell the partnership interests to the winning bidder. Meanwhile, unaware of the Mission(s) — Calpine(s)’ arrangement, Indeck(s) submitted their bid for Norweb(s)’ interests and were put on a short list, which Norweb(s) disclosed to Mission(s). Ultimately, Indeck(s) were selected by Norweb(s) as the preferred bidder and entered final negotiations to purchase Norweb(s)’ interests.

As Norweb (s) and Indeck(s) were finalizing the terms of the Auburndale and Gordonsville purchase agreements, Mission(s) and Cal-pine(s) allegedly furthered their plan to preempt Indeck(s)’ acquisition of these interests. By February 1997, Mission(s) had agreed to allow Calpine(s) to acquire the Auburndale and Gordonsville interests, as demonstrated by an internal Calpine(s)’ memorandum dated February 7, 1997, which noted that “Mission expects to receive formal notice of [an] offer to Norweb to buy 50 percent of the Auburndale and Gordonsville projects by February 7, 1997. Mission will give Calpine the opportunity to match this offer.” 2

By late March 1997, Indeck(s) alleged agreement on the terms of definitive purchase and sale agreements had been reached for the sale of Norweb(s)’ 50% partnership interest in Auburndale to Indeck Auburndale, L.L.C., and for the sale of Norweb(s)’ Northern Hydro’s 50% partnership interest in Gordonsville to Indeck Gordonsville, L.L.C.

Both purchase and sale agreements contained representations and warranties to be exchanged between Indeck(s) and Norweb (s). One provision specified Norweb(s)’ “seller’s knowledge” obligations, section 5.1 of each agreement, requiring Norweb(s) to make “all inquiries *** that are reasonably necessary to permit Seller to make such representation or warranty on a fully informed basis.” 3

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Cite This Page — Counsel Stack

Bluebook (online)
735 N.E.2d 649, 316 Ill. App. 3d 416, 249 Ill. Dec. 45, Counsel Stack Legal Research, https://law.counselstack.com/opinion/indeck-north-american-power-fund-lp-v-norweb-plc-illappct-2000.