Appeal from the Circuit Court of Cook County. Honorable John K. Madden, Judge Presiding.
Presiding Justice McNULTY delivered the opinion of the court. Tully and Cousins, JJ., concur.
The opinion of the court was delivered by: Mcnulty
PRESIDING JUSTICE McNULTY delivered the opinion of the court:
Plaintiffs Miles E. Baldwin and Irene Baldwin brought this action to obtain injunctive relief requiring defendant Ronald Wolff to produce the books and records of the Michigan-Chestnut Limited Partnership (Operating Partnership) and Michigan-Chestnut Investment Properties Ltd. (Investment Partnership) for inspection and copying by plaintiffs. The trial court entered judgment in favor of defendant. Plaintiffs appeal and we affirm.
On June 30, 1971, the Operating Partnership, a limited partnership, was formed among the 111 East Chestnut Corporation, as general partner, and certain limited partners. The Operating Partnership assumed a ground lease for property located at 111 East Chestnut Street and 830 N. Michigan Avenue, in Chicago, which became the Operating Partnership's only significant asset.
The Investment Partnership was a limited partnership that owned a limited partnership interest in the Operating Partnership. One of the limited partners in the Investment Partnership was the Irving L. Melroe Family Trust (Melroe). Melroe owned a 17.85% interest in the Investment Partnership. Defendant Ronald Wolff was a general partner of the Operating Partnership and the Investment Partnership.
In 1984, the Operating Partnership assigned its interest in the ground lease to a land trust in exchange for a wrap-around note. This note, secured by a mortgage interest in the leasehold of the property, became the Operating Partnership's only significant asset.
On January 2, 1985, the Operating Partnership was dissolved and Ronald Wolff and Stanley Fimberg were given the responsibility of collecting money due under the wrap-around note. At approximately the same time, the Investment Partnership was also dissolved and Ronald Wolff was assigned the responsibility of collecting money due from the Operating Partnership and distributing money to the Investment partnership's former partners.
In 1985, Irving Melroe filed for bankruptcy. On April 30, 1990, the trustee for Melroe's bankruptcy estate sold and assigned Irving Melroe's "right, title and interest to notes, interests in notes, and interests in partnerships known, or formerly known, as Michigan-Chestnut Partnership, Michigan-Chestnut Limited Partnership, or similar names, to Miles Edward Baldwin and Irene Baldwin as joint tenants with rights of survivorship."
The Baldwins gave Wolff written notification of the assignment. In July 1990, Wolff sent a distribution of the Investment Partnership to the Baldwins made payable to the "Irving L. Melroe Family Trust." On August 24, 1990, the trustee of the Melroe bankruptcy advised Wolff he had "sold all of the Bankruptcy Estate interest in the Michigan-Chestnut Partnership" to the Baldwins.
In 1993, the Michigan and Chestnut properties were sold and the ground lease was assigned to a developer who planned to convert the property to condominiums. As part of the transaction, Wolff agreed to subordinate the Operating Partnership's former partners' mortgage interest in the leasehold, and the wrap-around note became a second mortgage on the leasehold. In May 1994, the developer borrowed additional money to convert the property to condominiums and the wrap-around note became a third mortgage on the leasehold.
Around October 1994, the developer began to sell condominium units. With each unit sold, the value of the collateral securing the wrap-around note decreased, since each condominium unit was being sold free and clear. As of July 1996, the developer was several months in arrears in interest payments due and owing to the Operating Partnership.
Due to these facts, the Baldwins became concerned about the adequacy of security for the wrap-around note and about Wolff's conduct in negotiating the former partners' debt position and release of collateral. The Baldwins also were concerned with the expenditures for attorney fees made by the Operating Partnership. In addition, the Baldwins became concerned about the state of disrepair of the parking garage in the building.
On January 16, 1995, the Baldwins began requesting that Wolff provide certain information and documents regarding the Operating Partnership and the Investment ...