Sperling & Slater v. SilkRoad, Inc.
N21C-11-152 PRW CCLD
Del. Super. Ct.Apr 4, 2022Background
- Sperling & Slater (Chicago law firm) represented Andrew Filipowski and SRE in earlier matters; it obtained an Illinois statutory attorney’s lien for $729,914 on any proceeds from a Promissory Note issued by SilkRoad, Inc. (SRI).
- The Thomas A. DePasquale Management Trust (Trust) is a judgment creditor of Filipowski that purchased lien/charging orders against him and claimed competing rights to the same Note proceeds.
- In 2016 Sperling and the Trust executed a Distribution Agreement allocating BDO settlement funds and expressly preserving competing claims to any future SRI Note proceeds.
- A change of control in SRI in 2021 triggered payment on the Note; SRI sought interpleader and deposited $3,038,760.47 in escrow to avoid multiple liability among claimants (Sperling, the Trust, Filipowski, SRE).
- The Trust filed a competing action in Illinois, then moved in Delaware to intervene and to stay or rescind the interpleader order; Sperling opposed intervention and sought adjudication of its lien.
- The Delaware Superior Court granted SRI’s interpleader, allowed the Trust to intervene as of right, denied the Trust’s motion to stay or rescind the interpleader order, and declined to decide the lien merits at this stage.
Issues
| Issue | Plaintiff's Argument (Sperling) | Defendant's Argument (other movants) | Held |
|---|---|---|---|
| Whether interpleader by SRI is proper | Sperling did not oppose interpleader, but disputes that Trust or Filipowski have direct claims to the Note proceeds | SRI argued interpleader is needed to avoid multiple liability and inconsistent obligations | Interpleader is proper; February 16 order stands |
| Whether the Trust may intervene | Sperling argued intervention unnecessary; SRI already named Trust and Sperling said Trust lacks a direct interest | Trust argued it has a direct, protectable interest in the Note proceeds and timely moved after notice | Intervention granted as of right under Rule 24(a) because Trust has a protectable interest and is not adequately represented |
| Whether to stay or rescind the interpleader order or transfer venue | Sperling opposed stay, argued Trust cited no law and forum transfer unjustified | Trust sought a stay or rescission pending Illinois proceedings and asserted ongoing Illinois TRO/mediation | Motion to stay or rescind denied; no stay warranted and parties are now before Delaware court |
| Whether the court should adjudicate Sperling’s lien on the merits now | Sperling sought immediate judgment enforcing its Illinois attorney’s lien against the Note proceeds | Trust and others contested merits and urged resolution of competing priority claims before judgment | Court declined to decide merits now; Sperling’s request for judgment denied pending further proceedings |
Key Cases Cited
- Graham v. Nat’l Bank of Smyrna, 118 A. 325 (Del. Super. Ct. 1922) (describing interpleader’s purpose to protect against double liability and vexation)
- John v. Sotheby’s, Inc., 141 F.R.D. 29 (S.D.N.Y. 1992) (interpleader appropriate where stakeholder legitimately fears multiple liability)
- Cascade Nat. Gas Corp. v. El Paso Nat. Gas Co., 386 U.S. 129 (U.S. 1967) (interpleader practice permits intervention by claimants to funds when claims are mutually exclusive)