Judge: Colin Leis, Case: 22AHCP00255, Date: 2022-08-11 Tentative Ruling

Case Number: 22AHCP00255    Hearing Date: August 11, 2022    Dept: 3

SUPERIOR COURT OF CALIFORNIA

COUNTY OF LOS ANGELES – NORTHEAST DISTRICT

DEPARTMENT 3

MOVING PARTY:                Petitioners Irene de Aquino Villar and Dynamic Therapies, Inc.

RESPONDING PARTY:       Respondent Charmayne Ross

Petition to Stay Dissolution Proceedings, Appoint Appraisers, and Fix Value of Shares Owned by Respondent

The court considered the moving papers, opposition, and reply filed in connection with this motion. On July 27, 2022, the court ordered the parties to submit supplemental declarations on a limited issue, and the court considered those declarations as well. 

BACKGROUND

On May 19, 2022, voluntary dissolution of Dynamic Therapies, Inc. (“DT”) under Corporations Code section 1900(a) was initiated by a vote of Charmayne Ross (“Ross”), representing 50% of DT’s shareholders. Irene de Aquino Villar (“De Aquino”), the holder of the other 50% of the shares, opposed.  

On May 26, 2022, De Aquino and DT elected to initiate the statutory process for purchasing Ross's shares of stock in DT and provided notice to Ross and the Board of Directors of the election. Ross has not accepted the offers to purchase her shares or set a price at which she will sell her shares.

            De Aquino and DT (“Petitioners”) now petition to stay the voluntary dissolution proceedings, appoint neutral appraisers and fix the value of the shares owned by Ross.

EVIDENTIARY OBJECTIONS

            The court overrules Petitioners’ objections 1-20 to the Declaration of Charmayne Ross.

DISCUSSION

Under Corporations Code section 2000, subdivision (a), a shareholder holding 50% or more of the voting power may “avoid the dissolution of the corporation and the appointment of any receiver by purchasing for cash the shares owned by … the shareholders [seeking dissolution] at their fair value.”

Corporations Code section 2000, subdivision (b) provides as follows: “If the purchasing parties (1) elect to purchase the shares owned by the moving parties, and (2) are unable to agree with the moving parties upon the fair value of those shares, and (3) give bond with sufficient security to pay the estimated reasonable expenses (including attorneys’ fees) of the moving parties if those expenses are recoverable under subdivision (c), the court upon application of the purchasing parties, either in the pending action or in a proceeding initiated in the superior court of the proper county by the purchasing parties in the case of a voluntary election to wind up and dissolve, shall stay the winding up and dissolution proceeding and shall proceed to ascertain and fix the fair value of the shares owned by the moving parties.”

In light of the supplemental declarations filed by counsel for the parties on August 5, 2022, the court finds that the parties are unable to agree on the fair value of Ross’s shares. The court also notes that Petitioners have agreed to deposit a bond in the amount of $50,000 based on the estimate provided by counsel for Ross. (Kersten Decl., ¶ 4.) Consequently, the court finds that the prerequisites of Corporations Code section 2000, subdivision (b) have been met.

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CONCLUSION

Based on the foregoing, the court grants the petition to stay the voluntary dissolution proceedings.

The court orders Petitioners to deposit a bond in the amount of $50,000 with the Clerk of the court within 3 days of the date of this order.

The court appoints the following appraisers: __________.

The court sets a hearing for __________, 2022, at 8:30 a.m., in Department 3 to determine the fair value of Ross’s shares. The court orders the appraisers to file a report determining the fair value of Ross’s shares no later than 9 court days before the date of the hearing.

Petitioners are ordered to give notice of this ruling.

IT IS SO ORDERED.

DATED:  August 11, 2022

_____________________________

Colin Leis

Judge of the Superior Court