Seip v. Rogers Raw Materials Fund, L.P.
948 N.E.2d 628
Ill. App. Ct.2011Background
- Investors (Seips and Ridleys) sue Beeland Management, Rogers, and the Rogers Private Fund after asset diversions and Refco CM bankruptcy; claims include breach of contract, post-redemption interest, fees, tortious interference, unjust enrichment, declaratory judgments, and accounting.
- Parties: Beeland as general partner; Rogers (69% owner of Beeland); Price and Goodman as Beeland managers; funds track Rogers’ index and assets held in segregated accounts per private placement memorandum.
- Rogers arranged for Refco entities to serve as selling agent and to acquire Beeland interests; Refco CM received assets diverted from the funds amid Refco bankruptcy.
- Special redemption letter (Nov 15, 2005) offered limited partners a pro rata share of available cash as of Nov 30, 2005, with remaining assets to be paid as liquidity permitted; stated redemption requests would be treated as full redemptions.
- Initial December 2005 disbursements were made under the special redemption based on available cash; subsequent recoveries from Refco proceedings eventually brought distributions to 100% of interests.
- Circuit court dismissed the complaints in 2009 (and again on a 2010 denial of reconsideration); plaintiffs appeal asserting improper dismissal on multiple contract and tort theories.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Timeliness of redemption payments under contract | Beeland failed to redeem timely. | Redemption followed the special redemption terms and available cash. | No breach; proper redemption under letter |
| Post-redemption interest and fees/expenses | Interest and reimbursement of charges owed post-redemption. | No untimely payments; fees expenses permitted under partnership terms. | Dismissed; no breach or improper charges; duties not shown |
| Tortious interference with contract | Rogers induced breach by asset transfers to Refco CM. | Rogers not involved in asset diversion; insufficient evidence of inducement. | Dismissed; no substantial evidence of Rogers’ involvement or inducement |
| Declaratory judgment action viability | Requests declaration of breaches, interest, improper fees, and distribution of recovered assets. | Claims duplicative of contract and other claims; no concrete controversy on distribution since recovery exceeded 100%. | Dismissed; no concrete controversy; affirmed on alternative grounds |
Key Cases Cited
- La Salle National Bank v. City Suites, Inc., 325 Ill.App.3d 780 (2001) (standard for 2-615 motions requires favorable view of plaintiff's pleadings)
- Canel v. Topinka, 212 Ill.2d 311 (2004) (pleading and review standards for dismissals)
- Tedrick v. Community Resource Center, Inc., 235 Ill.2d 155 (2009) (de novo review of 2-615/2-619 dismissals)
- Krilich v. American National Bank & Trust Co. of Chicago, 334 Ill.App.3d 563 (2002) (2-619 analysis; genuine issues of material fact standard)
- Melena v. Anheuser-Busch, Inc., 219 Ill.2d 135 (2006) (pleading and dismissal standards; factual disputes on motions)
- Atkinson v. Affronti, 369 Ill.App.3d 828 (2006) (affidavits as evidence in motion to dismiss; unrebutted statements accepted)