P-5 GRA, LLC v. Steven Ivankovich
2023-1182-LWW
| Del. Ch. | May 23, 2025Background
- Plaintiff P-5 GRA, LLC owns a 7% minority interest in Overlook Managing Member LLC, with Defendant Ivankovich owning the remaining 93% and serving as Manager.
- Overlook LLC operates via a complex structure involving wholly-owned subsidiaries (the Pilgrim Entities) and downstream entities (Alliance GP and Alliance LP), which owned real estate in Florida.
- Alliance LP, the downstream entity, sold two Florida properties for $35 million in 2022; $30 million was then sent to an entity controlled by Ivankovich's family.
- No proceeds from the sale were distributed upstream to Overlook or P-5; P-5 argued it was entitled to a pro rata share under the LLC Agreement.
- P-5 previously filed and dismissed a books and records action with prejudice, then filed this suit seeking distributions, alleging breach of fiduciary duty, and reasserting information rights.
- The defendant moved to dismiss under Rule 12(b)(6); the court heard argument and entertained but ultimately denied plaintiff’s motions to supplement, amend, or stay.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Entitlement to distribution after asset sale | P-5 entitled to pro rata distribution from sale proceeds under LLC Agreement | LLC Agreement does not require such distribution; corporate separateness prohibits claim | No entitlement; LLC Agreement not triggered |
| Breach of fiduciary duty in handling distribution | Ivankovich breached duty by self-dealing and diverting asset sale proceeds | Any such claim is duplicative of contract claim or lacks duty owed to P-5 as secretary | Dismissed as duplicative/not independently viable |
| Failure to provide books and records | Breach of LLC Agreement by refusing financial info | Preclusive—identical claim dismissed with prejudice in prior action | Claim barred by collateral estoppel |
| Motion to supplement/amend or stay | Sought to supplement record/amend complaint/stay pending bankruptcy | No basis for supplement, amendment, or stay; untimely; not supported by overlaps | Motions denied; action dismissed in full |
Key Cases Cited
- Savor, Inc. v. FMR Corp., 812 A.2d 894 (Del. 2002) (Rule 12(b)(6) motion to dismiss standard)
- Nemec v. Shrader, 991 A.2d 1120 (Del. 2010) (breach of contract preempts fiduciary duty claims arising from same facts)
- Osborn ex rel. Osborn v. Kemp, 991 A.2d 1153 (Del. 2010) (Delaware contract interpretation principles)
- Wenske v. Blue Bell Creameries, Inc., 201 A.3d 490 (Del. 2019) (corporate separateness principle)