OMAR ROMAY, ET AL., APPELLANTS/CROSS-APPELLEES
v.
CARIBEVISION HOLDINGS, INC., ET AL., APPELLEES/CROSS-APPELLANTS

Fla. 3d DCA | 2014-08-27
No. 3D14-292
Before WELLS, SALTER and FERNANDEZ, JJ.
147 So. 3d 125 Florida District Court of Appeal, Third District (2014) Positive Treatment
Cited by 2 cases

AI-generated. These summaries, headnotes, and key points are machine-generated and may contain errors or omissions. Always verify against the full opinion text below. Not legal advice.

Synopsis

Twelve parties appealed and cross-appealed a non-final order appointing a referee to facilitate board meetings of two Delaware-based entities operating in Florida. The Third District Court of Appeal affirmed the trial court's appointment of a referee, holding that Florida courts have jurisdiction to appoint such relief for foreign corporations with operations in Florida, even before any primary receivership is established in the state of incorporation.


Holding

The Florida trial court had jurisdiction and equitable authority to appoint a referee for the Delaware entities based on Florida's statutory authorization for ancillary receivers for foreign entities with operations in Florida, and such appointment did not impermissibly regulate the entities' internal affairs. The court's appointment of a referee—rather than a receiver—was a proper exercise of equitable discretion that reflected concern about the scope of authority a receiver might exercise over a Delaware corporation.


Headnotes

[1] A Florida court has jurisdiction to appoint an ancillary receiver for a foreign corporation or limited liability company with assets and business operations in Florida, e…

[2] A trial court may appoint a referee to facilitate corporate board meetings and ensure compliance with governing agreements when corporate entities are deadlocked and thre…

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Key Quotes

“[QUOTE REDACTED — failed verbatim audit (paraphrase, not verbatim). See original_text for the text as originally displayed.]”

Establishes that Florida law expressly authorizes appointment of ancillary receivers for foreign corporations with Florida operations, supporting the trial court's jurisdiction.

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Facts & Procedural History

The Caribevision Interests and Romay Interests formed a 50%-50% joint venture in 2009-2010, creating two Delaware entities (America-CV Station Group, …

The full statement of facts, procedural history, and disposition for this case are member content.

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Opinion of the Court
SALTER, J.

SALTER, J.

Twelve parties to a circuit court lawsuit appeal or cross-appeal a non-final order appointing a “referee” for the primary purpose of “facilitating the corporate board meetings” of a Delaware corporation (America-CV Station Group, Inc.), and a Delaware limited liability company (America-CV Network, LLC), each based in Hi-, aleah Gardens, Florida. The plaintiffs in the case, appellees here, moved for the dissolution of the America-CV entities and for the appointment of a receiver or custodian pendente lite. We affirm the trial court’s order on appeal and cross-appeal, writing only to address one aspect of the court’s order.

The Romay Parties and the Caribevision Parties

The circuit court lawsuit is essentially a corporate divorce. The six plaintiffs below, appellees and cross-appellants here, are referred to as the “Caribevision Inter*126ests.” These parties included a corporation and two limited liability companies organized in Delaware, two Mexican corporations, and a Spanish corporation, all having direct or indirect interests in producing and broadcasting television programs in the Caribbean.

The defendants below that have appealed the non-final order are Florida residents and corporations led by Omar Ro-may, referred to as the “Romay Interests.” In 2009 and 2010, the Caribevision Interests and Romay Interests entered into what was ostensibly a.50%-50% joint venture to produce and broadcast television programs in Spanish to viewers in Miami, New York, and Puerto Rico. The parties formed the America-CV entities in Delaware, but with corporate offices in Hialeah Gardens, as the entities to carry out the purposes of the joint venture.

Under the amended shareholders’ and operating agreements for the America-CV entities, the ownership interests were divided equally between the Caribevision Interests and Romay Interests, and board and management interests were allocated in a similar manner. As acting chief executive officer of the America-CV entities, however, Omar Romay was also granted a tie-breaking vote.

The Caribevision and Romay principals later disagreed regarding the operations and financial commitments of the America-CV entities. The ventures could not conduct board meetings because they could not muster the quorum required in their organizing documents. Claims of financial wrongdoing and conflicts of interest were asserted. In 2011, the Caribevision Interests filed a complaint seeking damages from Romay and others, and ultimately a third amended complaint alleged that the America-CV entities were hopelessly deadlocked. In mid-2018, the Cari-bevision Interests moved for dissolution of, and appointment of a receiver for, the America-CV entities pursuant to Delaware law and the entities’ organizing documents. The trial court granted the motion in part, and denied it in part, and this appeal and cross-appeal from that non-final order ensued.

Analysis

The trial court conducted a series of hearings on the receivership issue, ultimately concluding that the America-CV entities “are threatened with substantial irreparable harm as a result of the inability to hold board meetings.” We conclude that this determination was based on competent, substantial evidence and thus affirm on that issue. McCormick v. Cox, 118 So.3d 980 (Fla. 3d DCA 2013).

The hearing transcripts indicate that the trial court was reluctant to appoint a receiver for the entities in Florida, given the primacy of Delaware law. Instead, the court appointed a “referee” for the purposes of “facilitating the corporate board meetings,” assuring compliance with the governing agreements, and determining “whether a board member must be excluded from casting a vote on any matter wherein a conflict of interest is alleged, subject to review by this Court upon application of any party.” The referee was granted access to all corporate records “reasonably necessary to conduct an investigation of contested resolutions and corporate acts.” The referee was also given the power to act as an ongoing mediator and was to report to the Court on all of these tasks.

The Romay Interests argue here that the Florida trial court lacked jurisdiction to grant such relief with respect to the entities, organized as they were in Delaware, contending that the Florida court thereby impermissibly regulates “the organization or internal affairs of a foreign corporation.” § 607.1505(3), Fla. Stat. *127(2013). The trial court’s appointment of a “referee” instead of a receiver — in the exercise of the court’s inherent equitable powers — reflects concern over the degree of authority that might be exercised in Florida by a corporate receiver for an entity organized in Delaware.

In fact, however, Florida’s Business Corporations Act and Limited Liability Company Act expressly authorize a Florida court to appoint an ancillary receiver here for a foreign entity “even though no receiver has been appointed elsewhere.”

Section 607.1432(6), Florida Statutes (2013), states:

The court has jurisdiction to appoint an ancillary receiver for the assets and business of a corporation. The ancillary receiver shall serve ancillary to a receiver located in any other state, whenever the court deems that circumstances exist requiring the appointment of such a receiver. The court may appoint such an ancillary receiver for a foreign corporation even though no receiver has been appointed elsewhere. Such receivership shall be converted into an ancillary receivership when an order entered by a court of competent jurisdiction in the other state provides for a receivership of the corporation.

Similarly, section 608.4492(6), Florida Statutes (2013), states:

The court has jurisdiction to appoint an ancillary receiver for the assets and business of a limited liability company. The ancillary receiver shall serve ancillary to a receiver located in any other state, whenever the court deems that circumstances exist requiring the appointment of such a receiver. The court may appoint such an ancillary receiver for a foreign limited liability company even though no receiver has been appointed elsewhere. Such receivership shall be converted into an ancillary receivership when an order entered by a court of competent jurisdiction in the other state provides for a receivership of the limited liability company.

These provisions recognize that a foreign company with an office, property, and operations in Florida may require local supervision even before a “primary” receivership is commenced in the state of incorporation. If and when a receivership order is entered in Delaware, the Florida receivership in this case would become “ancillary.”

We reject the Romay Interests’ contention that the trial court exceeded its jurisdiction and equitable authority in appointing a referee, because the parties directly addressed those issues during the hearings. On the Caribevision Interests’ cross-appeal (claiming error in that portion of the order denying the appointment of a receiver or custodian pendente lite), we also conclude that the trial court did not err. The motion and pleadings sought relief under the law of Delaware, the organizing documents, and the trial court’s equitable authority, rather than the Florida statutes cited above. BAC Home Loans Servicing, Inc. v. Headley, 130 So.3d 703, 705 (Fla. 3d DCA 2013) (party entitled to notice and due process based on a proper pleading). On remand, the Caribevision Interests may file a renewed motion seeking such relief under Florida law or (if they have not already done so) seeking relief in the chancery court in Delaware. We express no opinion regarding the appropriateness or outcome of any such actions.

Affirmed as to both the appeal and the cross-appeal.


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Citator

Cited By

  • Romay v. Caribevision Holdings, Inc., 173 So. 3d 1055 (Fla. 3d DCA 2015)
    …ies’ respective ownership interest in the joint venture. Caribevision asserts that a receivership is necessary to prevent irreparable harm to the parties’ joint venture, and that, consistent with our holding in Romay v. Caribevision Holdings, Inc., 147 So. 3d 125 (Fla. 3d DCA 2014), sections 607.1432(6) and 608.4492(6)2 of the Florida Statutes authorize the trial court to appoint a receiver for the joint venture. After conducting an evidentiary hearing over the course of two days, the trial court entered a…

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