Surf’s Up Legacy Partners, LLC v. Virgin Fest LLC

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IN THE SUPERIOR COURT OF THE STATE OF DELAWARE SURF’S UP LEGACY PARTNERS, LLC ) (f/k/a KAABOO, LLC), EVENTPRO ) MANAGEMENT, LLC (f/k/a KAABOO ) MANAGEMENT, LLC), EVENTPRO ) PRODUCTION SERVICES, LLC (f/k/a ) KB EVENTPRO, LLC), EVENTPRO ) DEL MAR, LLC (f/k/a KAABOO – ) DEL MAR, LLC), EVENTPRO ) SERVICES, LLC (f/k/a KAABOOWORKS ) SERVICES, LLC), EVENTPRO ) CONTRACT SERVICES, LLC (f/k/a ) KAABOO CONTRACT SERVICES, LLC), ) and EVENTPROWORKS, LLC (f/k/a ) KAABOOWORKS, LCC), ) ) Plaintiffs-Counterclaim Defendants, ) C.A. No. N19C-11-092 ) PRW CCLD v. ) ) VIRGIN FEST, LLC, VFLA EVENTCO, ) LLC, and KSD OWNCO, LLC (f/k/a SAN ) DIEGO FEST OWNCO, LLC), ) ) Defendants-Counterclaim Plaintiffs, ) ) VIRGIN FEST INVESTCO, LLC, ) ) Defendant-Counterclaim Plaintiff- ) Counterclaim Defendant. ) Submitted: December 9, 2020 Decided: January 13, 2021 Upon Defendant-Counterclaim Plaintiff-Counterclaim Defendant Virgin Fest Investco, LLC’s Motion to Dismiss GRANTED Upon Plaintiffs-Counterclaim Defendants Surf’s Up Legacy Partners, LLC, et al., Counterclaim Plaintiff-Counterclaim Defendant Bryan Gordon, and Counterclaim Defendants Robert Walker and Seth Wolkov’s Motion to Dismiss DENIED MEMORANDUM OPINION AND ORDER Theodore A. Kittila, Esquire, James G. MacMillan, III, Esquire, HALLORAN FARKAS + KITTILA LLP, Wilmington, Delaware, Attorneys for Plaintiffs- Counterclaim Defendants Surf’s Up Legacy Partners, LLC, et al., Counterclaim Plaintiff-Counterclaim Defendant Bryan Gordon, and Counterclaim Defendants Robert Walker and Seth Wolkov. Eric M. George, Esquire (pro hac vice), Kim S. Zeldin, Esquire (pro hac vice), BROWNE GEORGE ROSS LLP, Los Angeles, California, Attorneys for Plaintiffs- Counterclaim Defendants Surf’s Up Legacy Partners, LLC, et al. Robert K. Beste, Esquire, Jason Z. Miller, Esquire, SMITH, KATZENSTEIN & JENKINS LLP, Wilmington, Delaware, Attorneys for Defendants-Counterclaim Plaintiffs Virgin Fest, LLC, et al., and Defendant-Counterclaim Plaintiff- Counterclaim Defendant Virgin Fest Investco, LLC. Marvin S. Putnam, Esquire (pro hac vice), Jessica Stebbins Bina, Esquire (pro hac vice), R. Peter Durning, Jr., Esquire (pro hac vice), LATHAM & WATKINS LLP, Los Angeles, California, Attorneys for Defendant-Counterclaim Plaintiff- Counterclaim Defendant Virgin Fest Investco, LLC. WALLACE, J. This decision is a mash-up comprised of two tunes from a litigation soundtrack produced by the breakdown of a business relationship between the entities that orchestrated the KAABOO and Virgin Fest live music and outdoor entertainment festivals. Seven Delaware limited liability companies that planned and operated events under the KAABOO label (collectively, the “KAABOO Entities”) allege Virgin Fest Investco, LLC (“Investco”), a Delaware limited liability company, tortiously interfered with the contractual network they created with Investco’s affiliates until they were silenced into complete non-performance. In one of many responses, Investco, together with those affiliates (also Delaware limited liability companies—collectively, the “Virgin Fest Entities”), allege three of the KAABOO Entities’ managers, Bryan Gordon, Robert Walker, and Seth Wolkov (human beings—collectively, the “Managers”) engaged in various acts of fraud causing the Virgin Fest Entities to deal with the KAABOO Entities when they otherwise wouldn’t have. In the first motion (“Motion I”), Investco seeks dismissal of the tortious interference claim on affiliate privilege grounds. The affiliate privilege doctrine immunizes a controller from tort liability for its affiliates’ …

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