18-CIV-04355 ANDRIGHETTO PRODUCE INCORPORATED, ET AL. VS. DAVID AMDRIGHETTO

ANDRIGHETTO PRODUCE INCORPORATED DAVID ANDRIGHETTO
DAVID J. MICLEAN

PETITION TO STAY VOLUNTARY DISSOLUTION OF ANDRIGHETTO PRODUCE INCORPORATED AND ASCERTAIN VALUE OF MOVING PARTY’S SHARES TENTATIVE RULING:

The Petition of Andrighetto Produce Incorporated (“Corporation”) and Steven Andrighetto (“Steven”) (also collectively “Petitioners”) to Stay Voluntary Dissolution of Corporation and to Ascertain Value of Moving Party David Andrighetto’s (“David”) Shares is GRANTED based on the Stipulation of the parties filed on November 27, 2018. The parties stipulated to stay voluntary dissolution proceedings for the Corporation, and to an appraisal of David’s shares pursuant to Corporations Code section 2000.

The parties further ask that the court consider three remaining issues:

1. Whether the court should approve the Corporation as sole petitioner, or as one of two petitioners along with Steven, under the Amended Petition.

The court has reviewed the supplemental briefs filed by the parties as to this issue, and finds that David fails to establish that allowing both the Corporation and Steven to proceed as Petitioners is improper.

First, there appears to be no dispute that the Corporation may bring this Petition based on the Board’s vote. David does not dispute that on November 12, 2018, the Corporation’s Board held a special meeting and voted to approve and ratify Steven’s Section 2000 petition on behalf of the Corporation. (See David’s Supplemental Brief, p.2:25-28; Poniatowski Decl. ¶ 3.) David argues instead that the Corporation lacks the financial ability to purchase his shares, and should not be allowed to proceed as Petitioner. However, there is nothing in Corporations Code section 2000 that requires the court to make a determination regarding a corporation’s financial ability to purchase the shares before allowing an appraisal. Moreover, the Corporation may make its decision whether or not to purchase David’s shares once they are valued, which will presumably require it to determine at that time whether it has the financial ability to do so.

Second, it appears that both the Corporation and Steven may be Petitioners. In Abrams v. Abrams-Rubaloff & Associates, Inc. (1980) 114 Cal.App.3d 240, 246, the election under Corporations Code section 2000 to purchase shareholder Abrams’ shares did not specify whether the other shareholder, Rubaloff, or the corporation would be the actual purchaser.

Nevertheless, the Court of Appeal ended up ordering that the corporation be wound up and dissolved unless Abrams was paid $355,000 together with interest by either Rubaloff or the corporation within ten days after the decision became final. (Id. at 251.) The Court of Appeal did not require that a decision be made as to whether the corporation or the shareholder would purchase the shares before the appraisal took place, as David is trying to argue here. Instead, the Court of Appeal held that after the value of Abrams’ shares were determined that either the corporation or Rubaloff could purchase the shares. Accordingly, both the Corporation and Steven may proceed as Petitioners here.

Third, David contends that allowing both the Corporation and Steven to proceed as Petitioners, leaves it unclear whether the Corporation or Steven will decide on an appraiser. However, the Stipulation between the parties states “…each of the sides shall select one appraiser, and Terry Lloyd shall serve as the third appraiser and chairperson of the panel of three appraisers.” (See Stipulation para. 6.) The parties have therefore already stipulated to a process for selecting the appraisers. Based on this language, it appears that the Corporation and Steven shall select one appraiser together. 2. Whether the court should enter an order setting forth the timeline for appointment of the two additional appraisers and the appraisal process, the date for determination of “fair value” pursuant to Section 2000, and additional details and instructions for the appraisal process pursuant to Section 2000.

Pursuant to Corporations Code section 2000(c), the court shall appoint three disinterested appraisers to appraise the fair value of the shares owned by the moving parties, and shall make an order referring the matter to the appraisers so appointed for the purpose of ascertaining the value. “The order shall prescribe the time and manner of producing evidence, if evidence is required.” (Corp. Code § 2000(c).)

The parties stipulate that Terry Lloyd shall serve as an appraiser and chairperson of the panel of three appraisers, and that the parties shall each select one appraiser. (See Stipulation, p.4:26-5:1.)

The parties will exchange their names of disinterested appraisers on or before 12/14/18 at 5 pm.

Parties shall enter into a Stipulation or provide the court with the information on or before 12/17/18 by 5pm. The information or Stipulation shall include the timeline as to the completion of the appraisers.

3. Petitioner’s reservation of right to address its request to have David removed from the Board, and Respondent’s reservation of the right to respond, including by submitting full briefing and evidence, and to request a separate evidentiary hearing, if Petitioner seeks to remove David as a director or officer, or from the administration of the Company.

The parties request that this issue be considered by the court at the hearing, but it does not appear the parties are requesting a ruling on this issue at this time. Therefore, the court does not reach any arguments regarding this issue.

If the tentative ruling is uncontested, it shall become the order of the Court, pursuant to Rule 3.1308(a)(1), adopted by Local Rule 3.10, effective immediately, and no formal order pursuant to Rule 3.1312 or any other notice is required as the tentative ruling affords sufficient notice to the parties.