Reference no: EM131650514

In 1986, Shirley Lach and her then husband, Lynwood Wiseman, formed Man O'War Limited Partnership for the purpose of leasing real property and developing and operating shopping centers. Robert Miller became a general partner along with Wiseman. Lach was one of eight limited partners. The partners' ownership percentages were Miller, 1 percent, Wiseman, 32 percent, Lach, 27 percent, Jonathan Miller, 9 percent, Harry B. Miller, 12 percent, Harvey Morgan, 1 percent, Penny Miller, 3 percent, Jeffery Mullens, 1 percent, Jennifer Miller, 9 percent, and Sophie Wiseman, 5 percent. Wiseman, Lach, and Robert Miller also formed M.O.W. Place, Ltd., to lease a shopping center from the joint venture. In 1988, Wiseman and Lach were divorced, but continued in business together.

In the spring of 2002, Robert Miller became ill with cancer. With his approaching death, he met with Lach concerning the shopping center. Miller asked Lach to agree to naming Wiseman, Jeffery Mullens (brother-in-law of Robert Miller), and Jonathan Miller (son of Robert Miller), as the new general partners of the Partnership. Under the original Partnership agreement, new general partners could not be added without the consent of all the partners. Robert Miller also asked Lach to agree that when Wiseman died, the two remaining general partners will select a new general partner. Lach objected because it would allow the Miller family, which owned less than Lach's individual interest, to manage and control the shopping center. The Millers' would have two of the three general partners while Wiseman, who was then of advancing age, was alive. Upon his death, Jonathan Miller and Jeffery Mullens would then select the third general partner. Lach proposed substituting her daughter, Sherri McVay, an attorney, as a general partner in place of Jeffery Mullens. Her proposal was rejected.

Miller and Wiseman then sought to restructure the business form of the partnership to eliminate the need for Lach's consent to the proposed management change. They formed a new business entity, Man O'War Limited Liability Company. When operational, the LLC would be manager-managed and controlled only by a majority vote of the owners. The initial managers were to be Wiseman, Jonathan Miller, and Jeffery Mullens.