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Class Action Complaint

 

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Title:

Class Action Complaint

Entities:

Hallwood Group Inc.; Hallwood Realty Partners LP

Date:

2003

Size:

Preview shows 4KB of 16KB total

Price:

$34

ID:

#319610

 

 

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                IN THE COURT OF CHANCERY IN THE STATE OF DELAWARE


IN AND FOR NEW CASTLE COUNTY

I.G. HOLDINGS, INC., CHARLES )
MILLER and RUTH GRENING )
) Civil Action No.
Plaintiffs, )
)
-against- )
)
HALLWOOD REALTY LLC, ANTHONY J. )
GUMBINER, WILLIAM L. GUZZETTI, )
ALAN G. CRISP, WILLIAM F. FORSYTH, )
EDWARD T. STORY, )
)
Defendants, )
)
HALLWOOD REALTY PARTNERS, L.P., )
)
Nominal Defendant. )

--------------------------------------------------------------------------------


CLASS ACTION COMPLAINT

Plaintiffs, for their complaint, allege as follows:

1. This is an action on behalf of the public holders of units ("Units")
of interests of limited partnership in Nominal Defendant Hallwood Realty
Partners L.P. ("Realty" or "Partnership") against Realty's general partner,
Hallwood Realty LLC ("GP"), and GP's directors for breaches of fiduciary duties
and breaches of the Partnership Agreement.

PARTIES

2. Plaintiffs I.G. Holdings, Inc., Charles Miller and Ruth Grening own
Units.

3. Nominal Defendant Hallwood Realty Partners, L.P. is a
publicly-traded Delaware limited partnership which operates in commercial real
estate industry. The executive offices of Realty are located at 3710 Rawlins,
Suite 1500, Dallas, Texas. As of March 14, 2003, there were

{PAGE}


approximately 24,000 unitholders owning 1,593,948 Units. Units trade on the
American Stock Exchange. As of December 31, 2002, Realty owned 14 real estate
properties in six states.

4. Defendant Hallwood Realty, LLC is a Delaware limited liability
company and an indirectly wholly-owned subsidiary of The Hallwood Group
Incorporated ("THG"). GP is Realty's general partner and is responsible for
asset management of Realty and its properties, including decision-making
responsibility for financial, refinancing, acquiring and disposing of
properties. In addition, GP provides general operating and administrative
services to Realty. GP receives substantial fees for itself and its affiliates
from Realty. Hallwood Commercial Real Estate LLC is another indirect
wholly-owned subsidiary of THG, and provides property management, leasing and
construction supervision services to the properties of Realty. HWG, LLC, an
affiliate of GP, owns or controls 330,432 Units, or 20.7% of the total
outstanding Units, and GP and its affiliates own approximately 23% of the Units
on a fully-diluted basis.

5. Defendant Anthony J. Gumbiner is a director and chairman of GP.

6. Defendant William L. Guzzetti is president, chief operating officer
and a director of GP.

7. Defendant Alan G. Crisp is a director of GP.

8. Defendant William F. Forsyth is a director of GP.

9. Defendant Edward T. Story is a director of GP.

10. The Board of Directors of GP has an inherent conflict and is not
independent in conflicts arising between GP and its affiliates and members on
one hand and the Partnership and the public holders of Units on the other, as
the directors have divided loyalties by their dual duties. Decisions that
implicate possible removal of the general partner or reduction of fees paid


2
{PAGE}


by Realty to GP's affiliates thus are tainted by conflict and there is not an
independent decision-maker.

CLASS ACTION ALLEGATIONS

 

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