                                                    EFiled: May 28 2015 03:25PM EDT
                                                    Transaction ID 57304769
                                                    Case No. 7204-VCN
                           COURT OF CHANCERY
                                 OF THE
                           STATE OF DELAWARE

 JOHN W. NOBLE                                           417 SOUTH STATE STREET
VICE CHANCELLOR                                          DOVER, DELAWARE 19901
                                                        TELEPHONE: (302) 739-4397
                                                        FACSIMILE: (302) 739-6179

                                   May 28, 2015



Bradley R. Aronstam, Esquire                      Andrew D. Cordo, Esquire
Ross Aronstam & Moritz LLP                        Ashby & Geddes
100 South West Street, Suite 400                  500 Delaware Avenue, 8th Fl.
Wilmington, DE 19801                              Wilmington, DE 19801

                        Henry E. Gallagher, Jr., Esquire
                        Connolly Gallagher LLP
                        1000 North West Street, Suite 1400
                        Wilmington, DE 19801

      Re:   Policemen’s Annuity and Benefit Fund of Chicago, Illinois
             v. DV Realty Advisors LLC; C.A. No. 7204-VCN
            Date Submitted: February 9, 2015

Dear Counsel:

      Defendant DV Realty Advisors LLC (“DVRA”) seeks entry of an order of

partial final judgment under Court of Chancery Rule 54(b) regarding the Court’s

Order of November 24, 2014.1




1
 See Policemen’s Annuity and Benefit Fund of Chi. v. DV Realty Advisors LLC,
2014 WL 6671118 (Del. Ch. Nov. 24, 2014) (the “Order”).
Policemen’s Annuity and Benefit Fund of Chicago, Illinois, et al.
 v. DV Realty Advisors LLC; C.A. No. 7204-VCN
May 28, 2015
Page 2


                                       ***

      In August 2012, the Court determined that the Plaintiff public employment

benefit funds had properly removed DVRA as the general partner of DV Urban

Realty Partners I L.P. (the “Partnership”).2 In November 2013, the Court resolved

two contentions generally referred to as the Partnership Status Issue and the

Capital Account Issue.3 As to the Partnership Status Issue, the Court concluded

that DVRA’s general partnership interest did not convert into a limited partnership

interest following its removal as general partner. As for the Capital Account Issue,

the Court resolved a number of issues including that DVRA’s capital account

would be valued based on the fair market value of the Partnership’s assets as of

December 31, 2012, and that sums co-borrowed by DVRA or guaranteed by

DVRA would not be part of the valuation process. Disputes about the form of

implementing order resulted, but the Order, in non-final form, was entered.



2
  Policemen’s Annuity and Benefit Fund of Chi. v. DV Realty Advisors LLC, 2012
WL 3548206 (Del. Ch. Aug. 16, 2012), aff’d, 75 A.3d 101 (Del. 2013). The
appeal was taken under Rule 54(b) because the Court had retained jurisdiction over
a few follow-on issues.
3
  Policemen’s Annuity and Benefit Fund of Chi. v. DV Realty Advisors LLC, 2013
WL 6234202 (Del. Ch. Nov. 27, 2013).
Policemen’s Annuity and Benefit Fund of Chicago, Illinois, et al.
 v. DV Realty Advisors LLC; C.A. No. 7204-VCN
May 28, 2015
Page 3


DVRA’s pending application that the Order be treated as final for purposes of an

appeal followed.

                                        ***

      Rule 54(b) provides:

      When more than 1 claim for relief is presented in an action, whether
      as a claim, counterclaim, cross-claim, or third-party claim, the Court
      may direct the entry of a final judgment upon 1 or more but fewer
      than all of the claims or parties only upon an express determination
      that there is not just reason for delay and upon an express direction for
      the entry of judgment.

The Court may enter a Rule 54(b) judgment when: “(1) the action involves

multiple claims or parties, (2) at least one claim or the rights and liabilities of at

least one party has been finally decided, and (3) [] there is no just reason for

delaying an appeal.”4

      The Partnership Status Issue has been finally resolved, and there is nothing

that is foreseeable in future proceedings before this Court that would moot an

appeal. On the other hand, although additional proceedings required with respect

4
  In re Panex Indus., Inc. S’holders’ Liquidating Trust, 1999 WL 669350, at *2
(Del. Ch. Aug. 11, 1999); see also Curtiss-Wright Corp. v. Gen. Elec. Co., 446
U.S. 1, 7-8 (1980). There are multiple claims. Whether one claim (or right of a
party) has been finally resolved and whether there is no just reason for delay of an
appeal are questions to be addressed.
Policemen’s Annuity and Benefit Fund of Chicago, Illinois, et al.
 v. DV Realty Advisors LLC; C.A. No. 7204-VCN
May 28, 2015
Page 4


to the Capital Account Issue are not likely to alter or moot the determinations the

Court has already made, the Capital Account Issue has not been finally resolved.

When DVRA framed this issue, it sought judgment against the Partnership for

$2,574,747.5 Whether there will be future disputes regarding that number, based

on, for example, various real estate appraisals, is uncertain, but DVRA defined its

claim as one for a specific sum and this proceeding has not yet advanced to the

point where any particular number can be confirmed.

      The Court turns to the question of whether there is “no just reason” for

delaying an appeal. This is a matter for the Court’s discretion. Judicial efficiency

and the equities involved guide the exercise of that discretion. 6 The status of

DVRA, as a limited partner or as a holder of some sort of equity interest in the

Partnership, deserves appellate assessment. In addition, an Illinois action, filed by

DVRA, is currently stayed pending resolution of DVRA’s claim to limited partner

status in this proceeding; DVRA’s status will presumably determine whether or not

it may pursue a derivative action.


5
  DVRA’s Combined Response Br. Regarding Its Status as a Limited P’r and
Opening Br. in Supp. of Mot. for Determination of Capital Account 22.
6
  Curtiss-Wright, 446 U.S. at 8.
Policemen’s Annuity and Benefit Fund of Chicago, Illinois, et al.
 v. DV Realty Advisors LLC; C.A. No. 7204-VCN
May 28, 2015
Page 5


      The follow-on issues, primarily related to valuation, are not especially well-

defined. Maybe very little remains or maybe some sort of appraisal process will be

required. A valuation effort might turn out to be costly and time-consuming. An

appeal of the Capital Account Issue would provide guidance for the parties as to

what topics are necessary for final determination of this issue (or if this issue even

needs to be resolved) and perhaps would avoid unnecessary time and expense.

That benefit, however, is almost always present after the Court has made one of

those “fork-in-the-road” decisions which will set the path for future proceedings.

Finally, behind almost every application under Rule 54(b) lies some concern about

piecemeal appeals. In short, the relevant factors do not tip strongly in either

direction.

                                        ***

      The Order addressed two issues: one, the Partnership Status Issue, arguably

would deserve Rule 54(b) treatment; the other, the Capital Account Issue, arguably

would not deserve such treatment because it is not yet final and there is no good

reason to break it up into separate sub-issues for repetitive appellate review. In a

sense, appellate-conferred certainty is routinely desirable, but there is no material
Policemen’s Annuity and Benefit Fund of Chicago, Illinois, et al.
 v. DV Realty Advisors LLC; C.A. No. 7204-VCN
May 28, 2015
Page 6


countervailing prejudice to DVRA if appellate review awaits conclusion of the

proceedings in this Court. Given the overall context of this litigation, dividing it

up would provide little immediate benefit that would distinguish it from other

proceedings with an intermediate decision that one side wants to contest on appeal.

The more efficient approach would be to present the dispute fully and completely

to the appellate court. The Delaware Supreme Court has already heard one appeal

of a Rule 54(b) judgment during the course of this litigation, and there is no

significant policy that would be served by burdening it yet again. In essence,

DVRA is at that point where it should decide whether it wants to challenge, in

general terms, the valuation, or whether it wants to bring the proceedings in this

Court to closure in order to allow for a full and complete final appeal of the

outcome.

                                       ***

      Accordingly, for the foregoing reasons, as a result of the exercise of the

Court’s discretion, DVRA’s Motion for Entry of Partial Final Judgment is denied.
Policemen’s Annuity and Benefit Fund of Chicago, Illinois, et al.
 v. DV Realty Advisors LLC; C.A. No. 7204-VCN
May 28, 2015
Page 7


      IT IS SO ORDERED.

                                             Very truly yours,

                                             /s/ John W. Noble

JWN/cap
cc: Register in Chancery-K
