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Capgain Properties Inc. v. Landmaster Partners, LLC

United States District Court, N.D. Illinois, Eastern Division

June 7, 2017

CAPGAIN PROPERTIES INC. and BRIAN KNIGHT, Plaintiffs,
v.
LANDMASTER PARTNERS, LLC, Defendant.

          MEMORANDUM OPINION AND ORDER

          MATTHEW F. KENNELLY United States District Judge

         CapGain Properties Inc. and its president and CEO, Brian Knight, filed suit against Landmaster Partners, LLC, accusing Landmaster of breach of contract. Landmaster has moved for summary judgment on the ground that plaintiffs cannot meet all the elements for a breach of contract claim under Illinois law. Plaintiffs have also asked the Court to re-open discovery. For the reasons stated below, the Court denies plaintiffs' request and grants Landmaster's motion for summary judgment.

         Background

         CapGain is a Canadian corporation with its principal place of business in McHenry County, Illinois. Landmaster is a Florida corporation. According to the complaint, CapGain and Landmaster began negotiations in November 2014 for a contract under which CapGain would acquire oil and gas leases owned by Landmaster. In February 2015, the two companies entered into a term sheet "to establish definitive terms for a reverse merger takeover of [CapGain] by Landmaster." Def.'s Mot. for Summ. J. on Pls.' Compl., Ex. A (Term Sheet) at 1. The term sheet required CapGain to complete the following tasks by March 31, 2015: (a) the completion of CapGain's pending audit; (b) the removal of the current trading halt on CapGain stock; (c) the completion of a 10 to 1 rollback of CapGain stock; and (d) the closing of CapGain's current office located in Lake in the Hills, Illinois. Id. In exchange, Landmaster was to assign certain interests in its oil and gas leases to CapGain five days after these tasks were completed. Id. Landmaster was also to purchase Knight's shares in CapGain at a price of $380, 000. Id.

         According to Landmaster, CapGain had difficulty performing its obligations by March 31. For this reason, the parties executed a term sheet extension agreement in April 2015. See Def.'s Mot. for Summ. J. on Pls.' Compl., Ex. B (Term Sheet Extension). The agreement provides in part:

         Capgain [sic] understands this is not a perpetual agreement as does Landmaster Partners, Inc. and both parties will move to complete the transaction as quickly as possible.

         Accordingly CapGain will be held to the following dates:

A. Completion of the CapGain Audit prior to June 15, 2015.
B. On or before June 15, 2015 reinstatement of trading.
C. Closing of the office in Lake in the Hills (already done).
D. Completion of 10:1 rollback. (Note: that CapGain will complete all forms to do this but not actually do it until Landmaster has its N51-101 finished. CapGain only wishes to take this step in conjunction with the merger, and without stock support worries as to the price of the shares, so needs to be assured of its ability to complete the merger before completing said item).

         Accordingly Landmaster will also be held to the following dates:

A. Accomplish the N51-101 report by June 15, 2015.
B. Provide nominated list of officers and directors. Including filling out the appropriate PIF forms within fourteen days ...

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