Deliverance Poker, LLC v. Tiltware, LLC et al

Filing 78

NOTICE of Filing Plaintiff's Compliance with Court's Order to Provide Evidence as to Mizrachi's Membership Status by Deliverance Poker, LLC (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C, # 4 Exhibit D, # 5 Exhibit E, # 6 Exhibit F, # 7 Exhibit G)(Jacks, John)

Deliverance Poker, LLC v. Tiltware, LLC et al

Doc. 78

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS AUSTIN DIVISION DELIVERANCE POKER, LLC, Plaintiff , v. § § § § § § § § §

CIVIL ACTION NO. 1:10-CV-00664-JRN

MICHAEL MIZRACHI and TILTWARE, LLC, Defendant

PLAINTIFF'S COMPLIANCE WITH COURT'S ORDER TO PROVIDE EVIDENCE AS TO MIZRACHI'S MEMBERSHIP STATUS Plaintiff Deliverance Poker, LLC ("Deliverance Poker") submits the following in compliance with the Court's order to provide evidence indicating whether Michael Mizrachi ("Mizrachi") is or is not a member of Deliverance Poker. The evidence demonstrates that Mizrachi is not, and never has been, a member of Deliverance Poker, but instead holds only a membership interest pursuant to his contract with Deliverance Poker. A. Evidence of Mizrachi's Membership Status Deliverance Poker attaches the following documents that demonstrate Mizrachi holds only a membership interest: 1. Certificate of Formation of Deliverance Poker, LLC, attached as Exhibit A. Company Agreement of Deliverance Poker, LLC, attached as Exhibit B. Promotional Representation Agreement between Deliverance Poker and Mizrachi, attached as Exhibit C. Declaration Under Penalty of Perjury of Carlos Benavides, III, attached as Exhibit D.

2. 3.

4.

Dockets.Justia.com

Deliverance Poker attaches the following additional documents that are relevant to membership interests in it generally, but believes the foregoing documents are dispositive of the issue as to whether Mizrachi is a member. 5. Company Formation Questionnaire for MannBenham Fiduciaries Limited, dated September 10, 2009, attached as Exhibit E. Private Placement Memorandum for Deliverance Poker, dated July 1, 2009, attached as Exhibit F. Private Placement Memorandum Supplement for Deliverance Poker, dated August 20, 2009, attached as Exhibit G. B. Summary of Evidence and Authorities As set forth in the Court's order, under § 101.109(b) of the Texas Business Organizations Code ("TBOC"), an assignee of a membership interest is entitled to become a member of the limited liability company upon the approval of all members of the LLC. Section 101.052 of the TBOC provides that, with certain exceptions not applicable to becoming a member, a company agreement of an LLC governs over the provisions of the TBOC. Section 8.04(a) of the Company Agreement of Deliverance Poker addresses the manner in which an assignee of a membership interest may become a member. Except as set forth in Section 8.01[ 1], no Member shall have the right to substitute in such Member's place a purchaser, assignee, transferee, donee, heir, legatee, distribute, or other recipient of all or any portion of the Membership Interest of such Member. Any such purchaser, assignee, transferee, donee, legatee, or other recipient of any interest shall be admitted to the Company as a substituted Member only with the written consent of a Majority in Interest of all of the Members, which consent may be granted or withheld in the sole discretion of the Members . . .. Deliverance Poker, Company Agreement, Section 8.04 (italicized emphasis added). "Majority in Interest" is a term defined in Section 1.01 of the Company Agreement as "with respect to any
1

6.

7.

Section 8.01 does not appear to provide a manner in which a person may substitute in a Member's place.

2

referenced group of Members, a combination of any such Members who, in the aggregate, own more than the fifty percent (50%) of the Membership Interests owned by all of such referenced group of Members." Section 8.03(b) of the Company Agreement also addresses the effect of the assignment of Membership Interests: "Any Member who assigns all the Membership Interest of such Member in the Company shall cease to be a Member, except that, unless and until a substituted Member has been admitted to the Company, such assigning Member shall retain the statutory rights of the assignor of a Membership Interest under the TBOC." The TBOC recognizes that a person may be a member without holding any membership interests in the company. See Tex. Bus. Org. Code § 101.111(a) ("An assignor of a membership interest in a limited liability company continues to be a member of the company and is entitled to exercise any unassigned rights or powers of a member of the company until the assignee becomes a member."). See also Tex. Bus. Org. Code § 101.109 (Rights & Duties of Assignee of Membership Interest Before Membership). On July 12 and 13, 2009, Mizrachi and Carlos Benavides, III ("Benavides"), on behalf of Deliverance Poker, signed the Promotional Representation Agreement ("PRA") at issue in this case. In accordance with the terms of the PRA, Mizrachi was given "a membership interest in Deliverance equal to one and three-quarters percent (1.75%) as of the Effective Date." PRA, par. 7. Mizrachi, however, did not become a member of Deliverance Poker, nor has anyone else other than Benavides. See Declaration Under Penalty of Perjury of Carlos Benavides, III. Respectfully submitted, By: /s/ Douglas M. Becker Douglas M. Becker Texas State Bar No. 02012900

3

John D. Jacks Texas State Bar No. 00785986 GRAY & BECKER, P.C. 900 West Avenue Austin, Texas 78701 Telephone: [phone] Facsimile: [phone] COUNSEL FOR PLAINTIFF DELIVERANCE POKER, LLC

CERTIFICATE OF SERVICE I certify that on 3/11/2011, I caused Plaintiff's Compliance with Court's Order to Provide Evidence as to Mizrachi's Membership Status to be electronically filed with the Clerk of Court using the CM/ECF system, which will send notification of such filing to the following counsel for Defendants Michael Mizrachi and Tiltware, LLC: John P. Henry The Law Offices of John Henry, P.C. P.O. Box 1838 Round Rock, Texas 78680 Ian J. Imrich 10866 Wilshire Blvd., Suite 1240 Los Angeles, California 90024 Paul R. Bessette R. Adam Swick Greenberg Traurig, LLP 300 W. 6th St., Suite 2020 Austin, Texas 78701 George Belfield Greenberg Traurig, LLP 300 West Sixth Street, Suite 2020 Austin, Texas 78701 Jordan Grotzinger Greenberg Traurig, LLP 300 West Sixth Street, Suite 2020 Austin, Texas 78701

/s/ John D. Jacks

4