Appeal from the Circuit Court of Cook County. The Honorable Benjamin E. Novoselsky, Judge Presiding.
Presiding Justice Egan delivered the opinion of the court: McNAMARA, J., and Rakowski, J., concur.
The opinion of the court was delivered by: Egan
PRESIDING JUSTICE EGAN delivered the opinion of the court:
This case involves the estate of the prominent real estate developer, Arthur Rubloff, who died on May 24, 1986. Harry W. Reed, Edward A. Newmann, Vince Gavin and Alan W. Proudfoot are the executors of the estate and the trustees of the Arthur Rubloff Charitable Residuary Trust. (They will be identified collectively as "the Executors.") At the time of his death, Rubloff was the managing general partner of Evergreen Plaza Associates, Limited Partnership ("the Partnership"), in which he owned a 45% interest. The principal assets of the Partnership were a shopping center called Evergreen Plaza, located at 95th Street and Western Avenue in Evergreen Park, Illinois, and certain adjacent properties in Chicago and Evergreen Park. In his will, Rubloff bequeathed the residue of his estate to a charitable residuary trust; in accordance with the terms of the trust, the assets are to be distributed to 23 charitable beneficiaries ("the Beneficiaries").
In 1988, the Executors transferred the estate's entire interest in the Partnership to the Rubloff Evergreen Limited Partnership (RELP), a newly created limited partnership. The estate owns a 100% interest in RELP, and RELP owns the estate's 45% interest in Evergreen Plaza. RELP and TPG Financial, Inc., (TPG), a Missouri corporation, are the two general partners of the Partnership. TPG's interest in the Partnership is less than 1%. There were 13 other limited partners each of whom owns interests which are less than 10%. (TPG and the 13 limited partners will be identified collectively as "the Partners.")
Under Rubloff's will, the assets and earnings of the trust were to be distributed to the Beneficiaries ten years after Rubloff's death, which will be May 24, 1996. The terms of the trust granted the trustees broad authority to manage, invest, retain and/or liquidate the assets of the estate and of the trust. In the trust Rubloff expressed the opinion that the Residuary Trust "provides the most secure and flexible means of insuring that such various investment interests are not fractionalized or prematurely liquidated to the detriment of the beneficiaries of the Residuary Trust."
Shortly after Rubloff's death, Sidney Golding, Rubloff's successor as general partner, advised the Executors that they should consider selling the estate's interest in the Partnership. Golding died in July 1987. His death constituted a dissolving event under the original partnership agreement. The Executors did not accept two offers to purchase or to negotiate a purchase of the estate's interest in the Partnership. One was made in November 1986, and the other in October 1988.
In early 1992 all the partners in the Partnership negotiated and executed an amendment to the Partnership agreement. The amendment which was to be effective February 15, 1992, designated RELP and TPG to be the general partners of the Partnership. Neither RELP nor TPG was to act as a managing partner. Day-to-day management was to be handled by an independent professional management company under the guidance of both TPG and RELP; but TPG directly supervised the management company.
The amendment expressly gives RELP the exclusive right and power to dissolve the Partnership after August 15, 1992:
"Section 6 of the Partnership Agreement is hereby amended to provide that if, on or before August 15, 1992:
(a) the Partnership shall not have accepted, conditionally or unconditionally, an offer to purchase all or substantially all of the assets of the Partnership;
(b) Rubloff Evergreen Limited Partnership ("RELP") shall not have accepted, conditionally or unconditionally, an offer to purchase all of its partnership interests in the Partnership; or
(c) RELP shall not have otherwise agreed, then, at any time after August 15, 1992, the Partnership may be dissolved by RELP by giving written notice of such dissolution to each other partner. In the event that the Partnership is dissolved pursuant to this Section 6, then the General Partners shall be responsible for winding up the affairs of and terminating the Partnership; and the General Partners do hereby undertake to cooperate in promptly doing so."
The amendment provides that it would not become operative until RELP received authorization to execute the amendment from the Probate Division of the circuit court. The Executors filed a petition in the circuit court for this authorization and informed the court that they believed that the amendment "would facilitate the Estate's sale or liquidation of its partnership interest." The circuit court authorized RELP's execution of the amendment on April 30, 1992.
In a September 11, 1992, letter, the Executors indicated that before October 31, 1992, they would entertain any bona fide offers by the Partners to purchase RELP's interest in the Partnership. In letters dated October 15 and October 22, 1992, the Partners responded that they did not wish to make an offer to purchase RELP's 45% ...