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IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE T. CHRISTOPHER BURCH, JCB INVESTMENTS : LLC, and C. WONDER LLC, :
: Plaintiffs, :
: v : Civil Act ion : No. 7921- CS TORY BURCH, EDUARDO HOLSCHNEIDER, : JOHN S. HAMLIN, GLEN SENK, ERNESTO : ZEPEDA, MARIA ASUNCION ARAMBURUZABALA : LARREGUI, ISLA CORAL, S.A. DE C.V., : and TORY BURCH LLC, :
: Defendants. :
: - - -
Chancery Courtroom No. 12A
New Castle County Courthous e 500 North King Street Wilmington, Delaware Thursday, November 1, 2012 2:06 p.m.
- - - BEFORE: HON. LEO E. STRINE, JR., Chancellor. - - -
IN-COURTROOM SCHEDULING CONFERENCE
- - -
--------------------------------------------------- --- CHANCERY COURT REPORTERS
New Castle County Courthouse 500 North King Street - Suite 11400
Wilmington, Delaware 19801 (302) 255-0524
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CHANCERY COURT REPORTERS
APPEARANCES:
KEVIN G. ABRAMS, ESQ.Abrams & Bayliss LLP -and-ANDREW J. ROSSMAN, ESQ.
of the New York Bar Quinn, Emanuel, Urquhart & Sull ivan, LLP for Plaintiffs
WILLIAM M. LAFFERTY, ESQ.Morris, Nichols, Arsht & Tunnell LLP -and-MARC WOLINSKY, ESQ.STEPHEN R. DiPRIMA, ESQ.S. CHRISTOPHER SZCZERBAN, ESQ.
of the New York Bar Wachtell, Lipton, Rosen & Katz LLP
-and- ROBERT ISEN, ESQ.Chief Legal Officer
Tory Burch for Defendants Tory Burch and Tory Burch LLC
WILLIAM B. CHANDLER III, ESQ.Wilson, Sonsini, Goodrich & Rosati, P.C. -and-MICHAEL S. SOMMER, ESQ.
of the New York Bar Wilson, Sonsini, Goodrich & Rosati, P.C. for Defendants John S. Hamlin and Glen Senk
GREGORY P. WILLIAMS, ESQ.Richards, Layton & Finger, P.A. -and-ROBERT H. BARON, ESQ.
of the New York Bar Cravath, Swaine & Moore LLP for Defendants Eduardo Holschneider and Maria
Asuncion Aramburuzabala Larregui
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MR. ABRAMS: Your Honor, I appreciate
the time taken by the Court to address the plaintif fs'
motion to expedite. Andrew Rossman from Quinn Eman uel
has joined us from New York and, with Your Honor's
permission, he'l l speak on behalf of the plaintiffs .
He has been admitted pro hac vice.
THE COURT: You know, why don't we
just talk about whether we have much of a disagreem ent
left.
MR. LAFFERTY: Mr. Wolinsky is going
to speak on behalf of --
THE COURT: Yeah. I mean, what's -- I
don't want -- I don't want to spoil the drama of th e
trial.
Sit down.
MR. LAFFERTY: Sure.
THE COURT: This is l ike a scheduling
conference. That's all it is. It 's just in a -- y ou
know, it 's a grander room because of the things tha t
hang on the wall. Otherwise it 's like a Hechinger
test kitchen, the different colors that -- none tha t I
would ever select but were selected for us.
I don't -- I didn't see any reason to
burden anyone's Hanukkah, New Year's, Christmas,
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Kwanzaa, Festivus with this preppy clothing dispute .
I don't know why -- I guess I did this to myself, b ut
somebody in the room started the other tradition of
giving -- where, for some reason, I get all the pre ppy
clothier cases, because I've had J. Crew. I 've had --
I think because I 'm culturally steeped in it since I
was nine years old and learned what was hard for a kid
from Baltimore, duck shoes? What's a duck shoe? Y ou
know, and then you see all these freaks wearing thi s
really ugly -- I like L. L. Bean, but those duck sh oes
are ugly. I mean, there's no way around it.
So I think for both sides, it might
come as news, you know, there's really nothing all
that new about bright clothing and all that kind of
stuff. So the novelty of any of this may be someth ing
that I have to discover for myself, although I do
think the juxtaposition of Two Fat Guys and Talbot' s
in Greenville is just a beautiful thing.
So I guess what I 'd l ike to understand
from the defendants is what's really wrong with the
revised proposal from the plaintiffs, if any, given
that -- and I think the papers have been a l itt le b it
vague because I 'm not sure anybody showed me exactl y
what the consent right is. But my understanding is
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that the consent right is a right belonging to Tory
Burch LLC?
MR. WOLINSKY: No, no. The -- I --
Your Honor, the -- the dispute right now is about 1 0
weeks, mid-March versus -- excuse me; end of March
versus the beginning -- the middle of June. That's
the bid-and-ask spread.
THE COURT: But -- but what I 'm trying
to get at is --
MR. WOLINSKY: Yeah.
THE COURT: -- there's some --
MR. WOLINSKY: No.
THE COURT: There's a reason why
Mr. Burch --
MR. WOLINSKY: Right.
THE COURT: -- can't sell.
MR. WOLINSKY: There are two reasons,
in essence. The bidders all came in -- and this is
the -- the reason that counts is this one: There w ere
three bidders at the end of the process that had
submitted term sheets. They all required amendment s
to the LLC agreement. Amendments to the LLC agreem ent
require the consent of Tory Burch, as the person, a nd
Isla Coral, the member. Those -- those are their
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equity interests. They also require board approval .
So assuming, which obviously we
completely dispute, that the board was just on a
personal vendetta, had no justification whatsoever,
Isla Coral and Ms. Burch, in their individual
capacities, have the right to say "Look, we just" - -
"there's not going to be a deal here." In fact, th ey
have the right to say "If you want" -- "If you want to
exit, you have to shut down C. Wonder."
THE COURT: Right. To the extent --
what I 'm getting at now is if Mr. Burch just went o ut
and found somebody --
MR. WOLINSKY: Right.
THE COURT: -- who did not demand any
change to the LLC agreement --
MR. WOLINSKY: Then they sti l l need
board approval.
THE COURT: Okay.
MR. WOLINSKY: There's a board consent
right that expires in July -- I think July 2014.
July 2014, then the board can't unreasonably withho ld
consent. Prior to July 2014 the board has -- the
directors, in their sole and absolute discretion, h ave
the right to agree -- to approve or disapprove a sa le.
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So there's board-level approval --
MR. LAFFERTY: And member level.
MR. WOLINSKY: -- and member-level
approval. Member-level approval at this point is a
block, given the way that the bidders have structur ed
the --
THE COURT: Right. What I'm saying --
I 'm not trying to get into the -- look, I believe i t 's
hotly contested between the parties about why some of
these demands are being made. So today is not the day
to resolve the why. It 's just to observe that, you
know, there's a dispute about that.
We're now at what I guess -- what I 'm
saying is ... I don't really understand, given --
what -- why can't we go to trial in the first week in
April, last week in March?
MR. WOLINSKY: We don't -- we just
don't think there's enough time to get done what we
have to do and --
THE COURT: Why? Because that really
makes no sense to me. I mean, I'm sorry, but --
MR. WOLINSKY: Here's the why. I
mean, I' l l give you the why. The why is this is no t
just a case about what f ive directors did and why t hey
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voted the way they did and why three -- three bidde rs
structured their bids the way they did. It 's also --
we're going to be asserting counterclaims. And
everyone agrees the counterclaims should be tried w ith
the -- with the affirmative claims. And they're
essentially mirror images of each other. And we wa nt
to prove -- and we expect to prove -- that Mr. Burc h
intentionally copied the company's intellectual
property. And that proof is not going to be
developed -- we can put a shoe next to -- their sho e
next to our shoe. We can put a picture of our stor e
next to our store, but the ult imate proof under -- one
of the ult imate elements of proof in an unfair
competit ion claim is intent. And we want to prove
that he intentionally copied our styles and store
design. And that --
THE COURT: And, again --
MR. WOLINSKY: And that --
THE COURT: -- I'm sorry, but this
is -- this is not a case about intercontinental
ball istic missiles.
MR. WOLINSKY: The copying --
THE COURT: And ...
MR. WOLINSKY: Yeah.
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THE COURT: What you also have to
explain is how you get to hold him hostage with a
self-imposed setoff and then dictate a schedule. N ow,
you're looking quizzically at me, Mr. Wolinsky, but
you're too bright to look at me quizzically. You k now
exactly what I mean --
MR. WOLINSKY: Yeah.
THE COURT: -- by "self-imposed
setoff," which is you have all the time in your wor ld
to go hammer and tong after Mr. Burch at your leisu re.
But you bound up claims you have not proven in a
consent right in a situation where the LLC agreemen t
allows competit ion.
So the mere fact they're competing and
the mere fact -- again, honestly, there are hundred s
of people in New Castle County who could make a bun ch
of clothes if you gave them the catalogs. I 'm not
saying Mr. Burch -- it 's going to be interesting,
because there's what Tory Burch was before she met
Christopher Burch, and there's what Christopher Bur ch
was after Tory Burch became the Tory Burch in The N ew
York Times, and there's maybe influences that go in a
lot of directions here. There probably are lots of
catalogs people could see. There are all kinds of
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dream images of the world. The WASPs; right? The
Lifschitz world, do we know that one?
MR. WOLINSKY: I don't know that one.
MR. CHANDLER: Ralph Lauren.
THE COURT: Ralph Lauren's original
name.
MR. WOLINSKY: Oh, okay. Somebody
whispered it to me.
THE COURT: Yeah. That's, you know --
I mean, again somebody in the room knows that there
was -- in Sussex County, Delaware, for years you co uld
go on the Boardwalk and go to Gershman's. And you
know what Gershman's had on the Boardwalk? Anybody
remember that, Mr. Will iams?
MR. WILLIAMS: I think they had, l ike,
slightly irregular all igator shirts.
THE COURT: Exactly, Izods and Polos.
They were right from the factory. Frankly, anybody
who was a real WASP would shop at Gershman's becaus e
real WASPs actually don't go and pay full Polo pric e;
right, Mr. Abrams? They don't pay full Polo price at
Macy's. No way. They actually will f ind a bargain .
That's how they got to be, you know, WASPs. But yo u
went to Gershman's. And there were l itt le -- there
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was Lilly Pulitzer, there was Talbot's.
I'm just saying I don't really get
that. And I know that you want -- you've been prov ing
up this case against Mr. Burch for awhile now. How do
I know that? Just so -- no, I 'm not going to recus e,
but I 'm actually -- you know, I subscribe to The
Atlantic, The New Yorker, The New Republic, The Sun day
Times, other things. I 'm not unaware of the world.
So, you know, no one -- when Tory
Burch became popular, no one said "Oh, my gosh, thi s
is the newest thing that ever happened." There's t hat
LP person; right? Do we know that one?
MR. WOLINSKY: You've got to help me.
THE COURT: Lil ly --
MR. WOLINSKY: Lil ly Pulitzer, yeah.
THE COURT: Right. I mean, some of
these things go around that the people who were
wearing the originals, you know, I mean, with all t he
drugs and all; but they're, l ike -- they're going t o
be on Willard Scott, but they're -- they're tied
around the halls finding each other but very -- it ' s
easier with the bright -- you know, you need the
brightly colored clothes the older you get because you
can't -- you need to see your target, maybe. It ca n
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be just a smear, like Easter egg colors, and you ju st
know I'm in the right genre.
But my point is if that's all you've
got, then we're going to go on their schedule
because -- no. You're going to. So it's not -- I ' ve
listened to your arguments. You're going to.
MR. WOLINSKY: I wasn't going to argue
on that one.
THE COURT: What I 'm saying is you can
figure it out. You can get going.
MR. WOLINSKY: Right.
THE COURT: There's obvious choice for
the plaintiffs here. I mean, the counterclaimants
here.
MR. WOLINSKY: Right.
THE COURT: Which is it's -- it 's not
exactly clear why one would want a competitor ownin g a
substantial equity stake in perpetuity. It may be
nice to have leverage, but -- and you get to exert it.
But what I mean about in terms of
setting a schedule, you don't get to exert it and t hen
have your own schedule based on your setoff, when
you've taken your setoff -- you've taken it. And s o
you already have obviously a head start on it becau se
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you've concluded that someone else's legal rights
should be influenced by your determination. And we
say this a lot of t imes in takeover cases, right,
which I've done on each side with everybody in the
room, right. Like, if you want to get out of a mer ger
agreement, you're kind of supposed to know the reas ons
why you're getting out of the merger agreement --
MR. WOLINSKY: Right.
THE COURT: -- and the discovery
process is not allowed -- is not a chance for you t o
search for your material adverse effect or your bre ach
of rep and warranty. You're supposed to know it.
No one knows more in the world about
who knew what -- Ms. Burch knows just as much as
Mr. Burch and vice versa. If she believes it 's an
infringement --
MR. WOLINSKY: Right.
THE COURT: -- she's the best person
in the world to explain the uniqueness of her desig n,
why -- again, I think, on both sides, all these
things, right, there's a level of no one who's in a ny
form of art, including if you call this art, can cl aim
entire originality to anything. You're always
inspired. And the least original people are the
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people who will, you know, claim, you know -- I don 't
think there's any way that you would hear Bob Dillo n
or Paul McCartney or someone like that say "Well, I
had no influences."
So -- especially in this area. Again,
we can just have a fashion show from our own
community. I can send Mr. Abrams, Mr. Will iams out in
the -- in the time of the trial and have -- and jus t,
kind of, bring people in. I can watch the pull-up at
my kids' school which is just -- I got a kid who
bought topsiders. I 'm like, what is this? I mean,
you know, how do you actually want to wear these
things?
So I'm sorry if you don't think you
can prove up that world. You can allocate time. I
think there's another solution, you know; but I thi nk
that the proposal on the defense side is a reasonab le
compromise. I think the three-day proposal, that
probably seems a little lean. Just looking at the
lawyers in the room, there's no way that's going to
happen. But -- and, again, I 'm not wed to the firs t
week of April versus the second week of April versu s
the third week of April versus the fourth week of
March. But that time frame.
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MR. WOLINSKY: Okay.
THE COURT: What else do we need to
decide today?
MR. WOLINSKY: One other thing. We've
been asking the other side to commit to make their
China-based witnesses available for deposition in H ong
Kong or in a jurisdiction where we can take those
depositions, and we haven't gotten that commitment
yet.
MR. ROSSMAN: I can address that, Your
Honor. And thank you for taking the time --
THE COURT: Could you identify
yourself just in case --
MR. ABRAMS: Yes. It 's Andrew Rossman
with Quinn Emanuel for the plaintiffs.
What I told Mr. Wolinsky and I' l l tell
the Court is we're happy to discuss that issue. An d
we're open to doing everything that we can do to tr y
to make discovery go as quickly as we can. Our -- my
very considerable concern there is expense and time .
I'm informed that you can't take depositions in Chi na
-- it 's actually il legal -- even if the parties agr ee
to take depositions in China. So it wil l necessita te
getting parties to leave the country and go to Hong
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Kong, Macao, or come to the United States for the
deposition.
THE COURT: I think Mr. Wolinsky said
he could go to Hong Kong.
MR. ROSSMAN: Right. I understand
that. What I don't know is, if we're talking about
three witnesses, two witnesses, I don't see us havi ng
any issue at all. If we're talking about 20
witnesses, then I think we're talking about a very
considerable expense.
And, you know, one thing that I asked
Mr. Wolinsky, which he has consistently refused to
tell me, is what exactly are his counterclaims so I
can get a sense of what they're trying to understan d
in China so I can participate in a constructive way in
that conversation and tell him, you know, who I thi nk
is knowledgeable and --
THE COURT: Well, what's the bid
and -- what's the bid and -- excuse me. Sorry for
talking over you. What's the bid-and-ask on an
answer?
MR. WOLINSKY: I'm sorry. On?
THE COURT: When are you proposing to
fi le your answer?
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MR. WOLINSKY: I'm going to file it
Friday or Monday.
THE COURT: And how many depositions
are you seeking?
MR. WOLINSKY: I can -- there are two
names I know today. Nick Matfus and Gao Jing, but
there may be others. And I can't really tell that
there aren't others unti l either they answer the
interrogatories or produce some documents.
MR. ROSSMAN: Mr. Matfus I've spoken
to. I can tell you, the Court now that I 'm sure th at
we'l l make him available for deposition. I have no t
spoken with Mr. Jing. I don't know what subjects t hey
want to explore, but I 'm happy to take that up and
give him an answer next week after seeing their
counterclaim.
MR. WOLINSKY: Your Honor, there's a
substantive issue here on the foreign witnesses. A nd
it shouldn't be -- I 'm sure it 's not lost on you.
What happens in the world is that
Chinese manufacturers knock off American
manufacturers, and you can't get them because of th e
lack of process in China.
THE COURT: Oh, no, no. I get it.
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MR. WOLINSKY: And, you know, a litt le
bit of what we've -- what I think is going on here is
that. And the essence of the counterclaim here is not
lost on Mr. -- Mr. Burch. He knows it. The claim is
that he took --
THE COURT: Again --
MR. WOLINSKY: Okay.
THE COURT: You-all wish to have more
time to -- as I recall i t, they wanted your answer by
now, or they were hoping.
MR. WOLINSKY: So were we.
THE COURT: You were hoping to have
your answer by now?
MR. WOLINSKY: Yeah.
THE COURT: Okay. I got to -- I got
some proposal to extend time.
MR. WOLINSKY: Yeah. The hurricane
got in the way.
THE COURT: I think they get that.
There's a difference between -- I didn't hear --
that's what I said. I know you guys get all feisty
for a living --
MR. WOLINSKY: Yeah.
THE COURT: -- and ... is I didn't
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hear -- what I heard from Mr. Rossman was no
resistance to some reasonable production of witness es
but a concern about overkil l and wanting to underst and
what you're looking at; that the name -- the one
person that they've already talked to. I am sensit ive
to costs. We're not going to take -- and, you know ,
this -- we're going to size what is at stake. You
know, I don't know. How many stores are there for --
what is this? --Wonder Bread, C. Wonder?
MR. ROSSMAN: C. Wonder, Your Honor.
THE COURT: C. Wonder.
MR. ROSSMAN: I believe there are
about 12 stores in existence right now.
THE COURT: Okay. And how many Tory
Burch establishments are there?
MR. WOLINSKY: 85 stores, a thousand
department store outlets.
THE COURT: So, you know, nice-growing
enterprises, not yet Amazon, not Wal-Mart.
So I think the parties need to discuss
things. That's all I heard. I don't have a disput e.
I mean, I -- what I 'm saying is I -- I think the fa ct
that somebody's manufacturing in China does not exe mpt
them from anything, and I -- you know, this Court i s
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pretty good at asking, l ike -- remember, there used to
be a time period where people's investment banks wo uld
refuse to testify, the sell-side advisor around the --
"Well, I won't testify without a commission," you
know. Fine. Then you just say to defendants, "Oka y.
So you have no reliance on a banker defense or
anything l ike that. We just take it out of the
process."
I'm assuming Mr. Burch, who controls
this enterprise, if he's got people working in Chin a,
is going to make a reasonable number of them availa ble
if their testimony is relevant.
MR. WOLINSKY: That's all we need.
THE COURT: What you need to do is
proceed incrementally, you know. And be sensitive to
the goose-and-gander rule. But I think now you hav e a
schedule. You can talk about that.
And, you know, in terms of people in
China never leaving China, they do leave China.
That's how they get these deals. They also leave t o
gamble. They leave to have fun. And so, you know,
you might even be able to do some of these in New
York. And they could have personal shoppers at
Bergdorf Goodman who are specially trained to speak
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their dialect. Which dialect does Mr. Matfus speak ?
MR. ROSSMAN: English.
THE COURT: He doesn't -- he's not --
I only know restaurant Chinese like Szechwan,
Cantonese, Mandarin. But talk to each other about
that.
Is there anything else we really need
to do today if we've got that established?
MR. LAFFERTY: Your Honor, should we
just coordinate with Your Honor's assistant about a n
exact week for the trial?
THE COURT: Yeah. But what I want
before you -- you know, one is I'm assuming we're
going to trial.
MR. WOLINSKY: Right.
THE COURT: We're not doing
dispositive motions; right, both people?
MR. WOLINSKY: Yes, correct.
THE COURT: (Continuing) -- is f lesh
out your briefing schedule and then contact
Ms. Boulden. Everybody's been telling us, l ike, wh en
do we want things. Never. I mean, the reality is you
get to a point in l i fe -- and it's been at least a
decade or more now when do you want something? I
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really don't need any of it. I mean, probably l ike
you guys in the room, I mean, once your bil lables f or
the year fil l up a certain amount and you're past t hat
anxiety stage, it 's pretty cool if i t just goes awa y.
So the question for me is not when do
we want it. The question is when are you ready for it
to happen so that we can, you know -- I think we ca n
try to do is aim for being ready by that -- you kno w,
the, sort of, middle of the third week of March. I
think for some of you in the room and some of your
team, the last two weeks of March are not a very sm art
time to do a trial unless you want to have your
domestic relations situation altered, so that it mi ght
be better to go into April. I 'm thinking -- I'm
looking at Mr. Lafferty, but he's probably not the
only one in that situation.
So why don't you think about --
MR. WOLINSKY: Yeah.
THE COURT: -- that, if that makes
sense.
MR. LAFFERTY: And, Your Honor, is it
your preference to have two pretrial briefs from ea ch
side or is one acceptable?
THE COURT: Again, I don't really
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care. My sense is I don't want any more than four
briefs. It's been my experience that, especially i n a
case like this, where everybody is playing offense and
defense, that it 's a lot easier to put together the
schedule in a compact way if everybody -- if there' s a
two-brief sequence rather than a three-brief sequen ce.
If we -- I really give -- and, you know -- so my --
typically that works for me, if i t works for everyb ody
else. I have plaintiffs say "No. I want the three
brief." Then it 's their obligation, if they want
that, to go a lot earlier than everybody else
because -- but I think when you both have claims
against each other, a two-brief sequence wil l allow
you to do what you need to do with a l itt le more
breathing room. But if that works for Mr. Abrams a nd
Mr. Rossman.
MR. ABRAMS: Your Honor, do you happen
to know the Court's availabil i ty in the third week of
March or fourth week of March?
THE COURT: What I would say is I
would tend to stay away from those two weeks.
MR. ABRAMS: Well, any two weeks. I
was using that by way --
THE COURT: What I 'm saying is I wil l
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figure out a way to make you -- to get you a trial in
April, l ike beginning -- and as early in April as I
can.
MR. WOLINSKY: Okay.
THE COURT: Until you-all do all the
building blocks, though -- and they have to work --
and I think they wil l work -- then I can talk to
Ms. Boulden. I also wil l tell you I reserve the ri ght
to double-book you, which is to give you two start
dates or three start dates in that month, realizing
that, you know -- I mean, we once had one thing las t
year where we had eight preliminary injunction
hearings scheduled in six days. And I think it was
something like that. Elane said to me, you know,
"You're going to die if it happens." And I said, " I
don't think it's going to happen. I think what the
world is going to get is just more high-quality
disclosure." And darn, if it didn't just go down l ike
bowling pins have never gone down for me in a bowli ng
ally. It just all went away, and people learned mu ch
more about the comparable companies in small cap
deals.
So what I'm saying is you might get a
couple dates that you'l l have to hold, but we'l l ge t
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you in in April.
MR. CHANDLER: Your Honor, can I
interrupt and ask for a clarif ication on one point of
your schedule?
THE COURT: Sure.
MR. CHANDLER: And I apologize. I
have to introduce my partner from the New York offi ce,
Michael Sommer, who has the question.
MR. SOMMER: Yes, Your Honor. The
scheduling order proposed by plaintiffs -- we
represent two of the directors, Mr. Hamlin and
Mr. Senk.
THE COURT: Uh-huh.
MR. SOMMER: The proposed scheduling
order has Mr. Hamlin's answer due today. Mr. Senk' s
is due November 15th. We're not f il ing any
counterclaim. So my request is that the Hamlin dat e
be made the same as the Senk date, or if that's
objectionable -- if there's no objection, then I 'l l
sit down.
MR. ABRAMS: I advised Mr. Sommer's
partner earlier this week that we would discuss the
appropriate date for their answer at the conclusion of
this conference.
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MR. SOMMER: Oh. I'm uninformed.
That's f ine. I ' l l sit down.
THE COURT: Okay. But you're not
going to file counterclaims. That may simplify the
discussion.
MR. SOMMER: Right.
THE COURT: Okay. You guys can use
the room. If you want to have a mock trial, have M r.
Szczerban show his stuff, see whether Sallie's boys --
you know, what he's learned at Wachtell. He's grow n
up so much. Is it -- how many bearded partners do you
have, Mr. Wolinsky?
MR. WOLINSKY: Wow. Well, our
managing partner is bearded.
THE COURT: Who's that?
MR. WOLINSKY: Meyer Koplow. And
Mirvis, of course, has the Samson, you know, look b ut
...
THE COURT: Yeah. You call that a
beard? Like, you're just trying to figure out how
that is. It 's a Hasidic rattail, I mean, or someth ing
like that.
MR. WOLINSKY: If it 's dreadlocks,
we'l l all be in trouble.
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THE COURT: Well, you know, I mean,
who knows what he does really in the Hamptons. He
hasn't ever shared it fully. We should have a
video -- a Ted cam, and then we can tell whether he
does some sort of combination Maimonides/Marley Fes t
together and ...
So we got -- is there anything else
that you -- but, again, you can all talk to each
other.
Any other questions about the
schedule?
(No response)
THE COURT: So, again, I wasn't
really -- to be honest and just so -- not that
Mr. Abrams or Mr. Rossman would. When I was saying
looking at the schedule, when I leave the room and
you-all talk about this, I wasn't talking about any
particulars. I was talking my sense of what was at
stake -- and I was fully aware of the coming
infringement claim -- is the general t ime frame of the
trial. I wasn't wed to any of these particular dat es.
I figured that's something you-all could work out.
MR. WOLINSKY: Just to throw out the
things on the table, they proposed a hundred-hour
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limitation of depositions on each side. Is that
something -- we would object to that.
THE COURT: A hundred hours for -- for
the entirety of depositions?
MR. WOLINSKY: Yeah, for each side.
THE COURT: You know, again, I don't
have -- I think that's where you-all have to be
sensible. I mean ... you know, I don't see -- that
doesn't logically -- I mean, I could see how each s ide
could get done with fewer than a hundred hours; but I
could also see, you know -- if everybody needed 15 --
if you had 15 deponents on a side, that could be
tight, depending on who the witness is. I wouldn't be
encouraging much more than that. I mean, there oug ht
to be a blend. And there ought to be things like, you
know, if China -- I take it you can't even video a
deposition because that would be i llegal? Is that
right? Someone would be killed; right? One of our
Internet providers would report the name, and someo ne
would be executed? All in the name of commerce.
But there are ways to do things
efficiently. I mean, it 's a shame that that's --
l ike, for example, the ideal thing to do with some of
the Chinese witnesses would have been if you had a
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couple you need to do in Hong Kong, but there might be
a couple you do telephonically.
So I 'm not hep to a hundred hours.
What I am here to do, though, is if, frankly, someb ody
on either side proposes 19 deponents where it seems
clear that it 's more of an economic leverage strate gy
than a discovery strategic, I ' l l shut that down.
MR. WOLINSKY: I hope you don't have
the impression that that's -- that we're trying to use
litigation -- the costs of li t igation as a weapon.
THE COURT: I 'm not asking -- I 'm not
asking anybody to reveal any guilt or anything --
betray any sense of guilt.
MR. WOLINSKY: I have none on that
point.
THE COURT: Okay. Then don't -- then
don't worry. What I 'm saying is it could be -- if you
can all get the depositions done in 62.3 hours on e ach
side, you should. But a hundred hours is just an
artif icial thing.
I also don't know -- for example,
depositions are often longer than they should be, n ot
because the person is taking a long time asking
questions, because somebody says "Objection."
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Mr. Abrams knows that the real reasons why the boar d
did this were blank and blank and blank. And it 's
distracting the witness from the fact that they're
blank and blank and blank, and the witness' inabil i ty
to answer for himself blank and blank and blank and
blank has now been corrected by me, indicating that
the real reasons he did what he did is blank and
blank. I mean, I 've seen plenty -- everybody in
Chancery has seen plenty of transcripts -- and you' ve
been at those depositions -- where, frankly, it 's m uch
more from the obstreperous defense side than there is
from the asking side.
So I don't really know enough about
the case. I wil l say this -- and part of my instin ct
about it is I really don't think you're going to ha ve
a ginormous number of key witnesses. I think you k now
who a lot of the key witnesses are. There's going to
be a group of people who Ms. Burch knows Mr. Burch
started this business with, and you're going to wan t
to focus on them and how they created the stores in
the way they did and the products they did. Mr. Bu rch
certainly knows who he's suing. And so if you
actually focus in a real way on what your core thin gs
are, you'll probably get there.
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And I'm always going to be available
to talk about it. As I said, if you want to have a
extended conference -- if you want to have a
conference that's more focused after you-all talk
about it. But I think you should exchange lists an d
those -- and those sorts of things. And -- and the n
just let me know. But otherwise, we'l l talk about
April. It 's actually a very good time of year for
this kind of clothing. I mean, it 's not a real
January-February line in either store, is it?
MR. WOLINSKY: I'm looking to my
client.
MR. ISEN: We do have a good holiday
line as well.
THE COURT: You have a good holiday
line? I was talking about January-February. I 'm n ot
sure that's holiday.
MR. ISEN: Resort.
THE COURT: Resort. Ah. Never heard.
Lilly Pulitzer never did that, though. It is all
unprecedented.
You know, I 've actually -- totally
unrelated to this case, I've been deep in it, in an
autumnal Cheever phase. And so I 've been reading a ll
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kinds of Cheever. So I ' l l have to just keep that u p
through the -- through the case. Have you read you r
Cheever lately? You know who he is? I mean, it 's --
you know, and Mad Men will be coming back at some
point in t ime. So I think if you read Cheever, go see
the new Virginia Woolf revival and watch Mad Men.
We'll be all geared up and in the mood for this sor t
of drunken WASP fest. Are they WASPs? Are the
Burches WASPs? Do we know?
MR. ISEN: I don't know how to answer
that question.
THE COURT: Well, it 's some sort of --
it 's not -- I mean, it 's nothing wrong -- it 's call ed
White Anglo-Saxon Protestant. So you don't know.
MR. ISEN: No --
THE COURT: So, I mean --
MR. ISEN: -- I mean, Tory Burch is
Jewish and Chris is not Jewish.
THE COURT: Okay. But not Jewish
doesn't make you a WASP, because it could make you an
equally excluded faith l ike Catholic; right? I mea n,
that's not a WASP. You know, a WASP is a WASP. So ,
you know -- I think you're going to have to have
interrogatories about who's a WASP. And I' l l
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certainly be attacked as anti-WASP, probably, and t hen
I love all WASPs. I 'm bringing actually Rodman War d,
Jr. in as my expert because I always used to tell R od
that he actually had a l ineage chart in his basemen t
which had all of the DuPont family trees on it. It
was l ike some people have war rooms. He had that t o
determine how they were actually related to the DuP ont
family. So I think we might be able to have some
unique experts in Delaware. And I think Mr. Willia ms
is bringing some of his former partners back.
MR. WILLIAMS: (Inaudible)
THE COURT: Morris Nichols was more of
an upstart f irm, but I think they had -- they did h ave
some -- some people who would claim that; right?
So I won't say anything more on the --
on the transcript. I'm going to go off the transcr ipt
and then talk about which former partners we actual ly
want to have come back. Thank you.
ALL COUNSEL: Thank you, Your Honor.
(Discussion off the stenographic
record from 2:47 p.m. unti l 2:49 p.m.)
THE COURT: Have a good day.
(The proceedings concluded at 2:49 p.m.)
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CERTIFICATE
I, NEITH D. ECKER, Official Court
Reporter for the Court of Chancery of the State of
Delaware, do hereby certify that the foregoing page s
numbered 3 through 33 contain a true and correct
transcription of the proceedings as stenographicall y
reported by me at the hearing in the above cause
before the Chancellor of the State of Delaware, on the
date therein indicated.
IN WITNESS WHEREOF I have hereunto set
my hand at Wilmington, this 2nd day of November 201 2.
/s/ Neith D. Ecker
---------------------------- Official Court Reporte r of the Chancery Court State of Delaware Certif icate Number: 113-PS Expiration: Permanent
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