The opinion of the court was delivered by: Judge Ronald A. Guzman
MEMORANDUM OPINION AND ORDER
Plaintiff Scion Dwight Managing Member LLC ("Scion Dwight") has sued defendant Dwight Lofts Holdings, LLC ("DLH") for breach of contract and fiduciary duty. DLH asks the Court to stay this case pursuant to the Colorado River doctrine. For the reasons set forth below, the Court denies the motion.
On January 22, 2008, Scion Dwight and DLH formed Dwight Lofts LLC ("the Company") to purchase and manage certain rental property in Chicago. (First Am. Compl. ¶¶ 8-11.) Among other things, the Company's Amended LLC Agreement ("Agreement"): (1) makes Scion Dwight the Company's managing member and gives it the absolute right, starting twenty-four months after the rental property is acquired, to sell its interest in the Company to DLH ("Put Right"); (2) gives DLH the absolute right to revoke Scion Dwight's management authority; and (3) sets forth the order in which the proceeds from selling the Company will be distributed to the parties ("Sale Proceeds Waterfall Provision"). (Id. ¶¶ 17-18, 21-29; id., Ex. 1, Agreement §§ 1.1, 4.2, 5.1.1, 5.1.4, 6.4.1, 6.4.2; id., Ex. 2, First Amendment §§ 6.4.1-.4.2.) On July 22, 2008, the Company purchased the property. (See First Am. Compl. ¶¶ 21-22.)
In early 2010, the Company began negotiating a long-term lease of the property with Columbia College. (Id. ¶ 36.) Before the lease was finalized, DLH terminated Scion Dwight's management rights and offered to let Scion Dwight exercise the Put Right early to liquidate its interest in the Company. (Id. ¶¶ 30-34, 41.) Scion Dwight said it would do interested in doing so, but not until the lease with Columbia was in place. (Id. ¶ 42.)
On April 7, 2010, Columbia College signed a lease for five academic years starting August 2010, but gave the Company the right to rent the property to others during the summer when school was not in session. (Id. ¶¶ 37-40.)
Thereafter, Scion Dwight prepared to exercise its Put Right by analyzing the property's fair market value. (Id. ¶ 43.) It concluded the property was worth about $96.5 million, a figure based in part on projected summer rental revenues of $958,000.000 each year. (Id. ¶¶ 44-48.) In May 2010, DLH rejected Scion Dwight's valuation and withdrew its offer to let Scion Dwight exercise the Put Right early. (Id. ¶ 54.)
Over the next few weeks, Scion Dwight urged DLH to make meaningful efforts to secure summer rentals because that revenue would greatly impact the value of Scion Dwight's interest in the Company. (Id. ¶¶ 55-58.) DLH ignored these requests. (Id. ¶¶ 59-71.)
On July 22, 2010, Scion Dwight exercised its Put Right and, in accordance with the Agreement, the parties mutually appointed an appraiser to determine the property's fair market value (Id. ¶¶ 72-73.) DLH falsely told the appraiser that the prospects for obtaining summer rentals were dim, and thus such rentals were not likely to generate much revenue in the future. (Id. ¶¶ 74-77.)
The appraiser accepted DLH's representations and projected summer occupancy rates of ten and twenty percent for 2011 and 2012, respectively, and fifty percent for each lease year thereafter. (Id. ¶ 79.) The appraiser set the property's fair market value at $97.5 million. (Id. ¶ 78.)
On September 20, 2010, DLH told Scion Dwight that there was a mistake in the Sale Proceeds Waterfall provision of the Agreement and two others like it that the parties had signed in connection with similar projects. (See First Am. Compl., Ex. 6, Letter from Bellinger to Bronstein of 9/20/10.) DLH said the parties had agreed that Scion Dwight would be paid a "promote percentage," or additional return, when the Company was liquidated but only after DLH's capital investment had been repaid. (Id.) The Agreement, however, states that the promote percentage will be paid first. (Id.; see First Am Compl., Ex. A, Agreement § 4.2.) DLH asked Scion Dwight to amend the agreements to reflect the parties' true intent. (Id., Ex. 6, Letter from Bellinger to Bronstein of 9/20/10.)
In response, Scion Dwight filed this suit, alleging that DLH had anticipatorily breached the Agreement. Subsequently, Scion Dwight added a claim for breach of fiduciary duty, alleging that DLH deliberately failed to obtain summer rentals to decrease the property's value, and thus Scion Dwight's payout.
Immediately after Scion Dwight filed this suit, DLH filed suit in Delaware state court asking for reformation of the Sale Proceeds Waterfall provision in the three agreements executed by ht parties or their affiliates. (See Barnett Aff. Supp. Mot. Stay, Ex. 1, ASB Allegiance Real Estate Fund ...