APPEAL from the Circuit Court of Cook County; the Hon. JOHN F.
HECHINGER, Judge, presiding.
MR. JUSTICE MCGLOON DELIVERED THE OPINION OF THE COURT:
Lake Shore Club of Chicago filed suit seeking to enjoin Lakefront Realty Corporation's sale of property to Northwestern University. Lake Shore Club of Chicago also sought specific performance of its right of first refusal granted in the lease between the Club and Lakefront Realty. After an evidentiary hearing the court denied the relief sought. Plaintiff Club appealed.
On appeal, plaintiff argues that (1) the Club's offer to Lakefront was bona fide in that the Club did not assign its right of first refusal in violation of a lease provision; and (2) the trial court erred in dissolving the temporary restraining order and denying the plaintiff's motion for a preliminary or permanent injunction on the basis that the Club would suffer no irreparable harm and that the Club had an adequate remedy at law.
Lakefront Realty Corporation (Lakefront) was created as a result of the 1947 reorganization of the bankrupt Lake Shore Athletic Club. A second product of this reorganization was the Lake Shore Club of Chicago (the Club), a not-for-profit social and athletic club. Ownership of Lakefront stock is restricted to dues-paying members of the Club.
Lakefront owned the land and buildings at 850 North Lake Shore Drive, Chicago, Illinois (the 850 property). It also owned the personal property therein. All of this property had been leased to the Club since 1947 per various leases.
On October 28, 1971, Lakefront and the Club entered into a new lease and option to purchase agreement for a term beginning June 30, 1973, up to and including June 30, 1977. Under the terms of this agreement, the Club was given the right and option to purchase the 850 property during the term of the lease for consideration specified in the agreement.
The Club's right of first refusal, which formed the basis for count I of the complaint, arose from article 6 of the lease. The pertinent parts of article 6 are as follows:
"ARTICLE 6. (1) The Lessor may, without the consent of the Lessee, sell the PROPERTIES at any time subsequent hereto to a purchaser other than the Lessee subject to the following conditions:
(a) That the Lessor shall send a notice in writing to the Lessee that it has received a written offer to purchase the PROPERTIES, which offer has been approved for acceptance, subject to the rights of the Lessee hereunder, by the Board of Directors of the Lessor and its Stockholders, to which notice a copy of such offer made to the Lessor shall be attached.
(b) If within one hundred and twenty (120) days following the mailing of such notices and a copy of the offer to the Lessee, the Lessee shall not have made a bona fide offer to purchase the PROPERTIES on the same terms and conditions as those embodied in the offer, a copy of which has been attached to the notice to the Lessee, or, if the option provisions contained in Article 5 hereof are then in full force and effect, the Lessee shall not within one hundred and twenty (120) days following the mailing of such notice have given its notice to the Lessor of its intention to exercise said option and within sixty (60) days after the expiration of said one hundred and twenty (120) days shall not have tendered to the Lessor the purchase price for the PROPERTIES."
Another pertinent provision of the lease, namely, article 23 formed the basis for one of Lakefront's defenses. Article 23 is as follows:
"ARTICLE 23. Lessee and Lessor agree that they will not make any assignment of this lease, or any part thereof, without in any case first securing the written consent of the other party."
In 1975, Lakefront and Northwestern University (Northwestern) began negotiating for the sale of the 850 property. On March 31, 1977, the parties executed a contract by which Lakefront agreed to sell the property to Northwestern. This sale was approved on May 10, 1977, by more than two-thirds of Lakefront's shareholders, all of whom were also members of the Club. The closing was to take place on or before July 1, 1977.
On June 30, 1977, the Club filed suit against Lakefront. In count I of its complaint, the Club sought specific performance of its right of first refusal and temporary, preliminary, and permanent injunctive relief preventing the sale of the 850 property to Northwestern until the Club had an opportunity to exercise its right of first refusal.
In count II, the Club sought to enjoin the sale to Northwestern on the ground of breach of the partnership formed ...