JAMES I. COHN, District Judge.
Plaintiff Raymond Henry Starkes, III ("Starkes" or "Plaintiff") filed this action against his business partners, Gregory Feit and Jack Flechner, along with their wives, Ilene Feit and Pamela Flechner, and various closely held corporations. Starkes alleges that he formed Defendant Cane Burgers, LLC ("Root LLC") with Feit and Flechner in order to purchase and operate franchises in Florida of Five Guys, a premium fast food restaurant chain. Starkes, Feit and Flechner each owned 25% of Root LLC, with the remaining 25% split among an operations manager and several investors. First Amended Complaint, ¶¶ 59-61, 64 [DE 24]. Starkes alleges that the Five Guys franchises purchased by Root LLC in 2005 made significant profits, but only Feit and Flechner enjoyed those profits by obtaining wrongful distributions from Root LLC and creating spinoff corporations, also named as Defendants in this action.
The First Amended Complaint contains derivative claims on behalf of Root, LLC against Feit and Flechner for misappropriation of a business opportunity, breach of fiduciary duty, civil conspiracy, as well as an additional derivative claim for accounting against Feit, Flechner, and Root LLC (Counts I to IV). In addition, Starkes asserts direct claims against Flechner and Feit for conversion, distribution of profits pursuant to Fla. Stat. § 608.4261, civil conspiracy, and unjust enrichment (Counts V to VIII). One week after the First Amended Complaint was filed, Defendants Gregory Feit and Jack Flechner filed for bankruptcy, resulting in a stay of this litigation as to those two defendants [DE's 27, 28 and 29].
After the corporate defendants moved for an extension of time to respond to the Complaint, Plaintiff filed a cross-motion asking the Court to direct counsel for the corporate defendants to identify the natural persons directing his actions, and to disclose the minutes of all meetings concurrent with Feit and Flechner's bankruptcy filings wherein any corporate defendant determined or elected a principal as a managing member or as a controlling interest. Defendants oppose the motion.
Plaintiff argues that pursuant to Fla. Stat. § 608.4237(1)(b), Feit and Flechner automatically lost their interest in their Florida limited liability companies. Section 608.4237(1)(b) states that a person ceases to be a member of a limited liability company upon the filing of a voluntary petition in bankruptcy, unless otherwise provided for in the articles of organization. There is no indication in the record that Cane Burgers, LLC had a provision in its articles of organization that governed bankruptcy situations.
Plaintiff relies upon
In opposition to the motion, Defendants impliedly answer the question that Plaintiff asks — counsel for the corporate Defendants "has taken direction in the handling of this lawsuit from Flechner and Feit, who are the duly authorized managers of Cane Burgers, L.L.C." Response, ¶ 3. Defendants contend that because Feit and Flechner's interest in Cane Burgers, LLC is owned in conjunction with their spouses as tenancies by the entireties, it is not subject to termination under § 608.4237(1)(b). In
Upon consideration of the parties' arguments, the Court notes that the narrow relief sought by Plaintiffs — the disclosure of who is directing counsel's actions — has already been provided in Defendant's response. This federal court, sitting in diversity, is reluctant to opine on an area of Florida limited liability company law in which neither party has cited to any Florida court decisions addressing the application of § 608.4237(1)(b) to an interest held by a tenancy by the entirety.
Accordingly, it is