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Delaware Supreme Court Theater Ruling Addresses Party's Deposition Demeanor

By Jenna Greene
August 01, 2019

It's a fight that pits Carole Shorenstein Hays, the owner of San Francisco's Curran Theatre, against San Francisco theater owner Robert Nederlander. He claims that Hays improperly competed to put on the musical Dear Evan Hansen and the play Harry Potter and the Cursed Child, in violation of an LLC agreement governing another theater company in San Francisco, Shorenstein Hays-Nederlander Theatres LLC (SHN), that the parties jointly own.

CSH Theatres L.L.C. and Nederlander of San Francisco Associates each own 50% of SHN. A dispute arose between the parties after CSH Curran LLC, an entity that Hays co-operates, bought the Curran Theatre. In 2014, CSH Theatres sued the Nederlander company in Delaware Chancery Court seeking a declaratory judgment that CSH Theatres wasn't obligated to renew SHN's lease with the Curran.

In a recent complex ruling, the Delaware Supreme Court in part reversed the trial court's findings by deciding that, under the terms of the SHN LLC agreement, Hays and her husband Jeffrey “cannot stage competitive productions (not falling within Section 7.02(b)'s [narrow] exceptions) at the Curran that violate its contractual duty [under §7.02(a)] to maximize SHN's economic success.” The supreme court went on to note: “Because Nederlander has not challenged the court's rulings in the Declaratory Judgment Action as to damages and other forms of relief, we decline to remand that action. Further, in view of our reversal of the trial court's interpretation of Section 7.02(a) in the Declaratory Judgment Action, we order remand of [Nederlander's related lawsuit] for further proceedings consistent with this Opinion.” In re Shorenstein Hays-Nederlander Theatres LLC Appeals, 596 (2019).

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