On November 30, the Delaware Chancery Court ruled in favor of S&C clients Carole Shorenstein Hays and her husband, Dr. Jeffrey Hays, by rejecting a motion for a preliminary injunction filed by Robert Nederlander, of the Nederlander theater family, which sought to enjoin the presentation of two hit shows at the Curran Theatre in San Francisco. One of the two shows, Dear Evan Hansen, was scheduled to open at The Curran in early December 2018 for a limited run of about four weeks, and the other—Harry Potter and the Cursed Child—is scheduled to play at The Curran beginning in summer 2019, and potentially for at least a couple of years. This is the second action brought by the Nederlander family against the Hays family, both of which stem from the fact that the two families are 50/50 owners of a company called SHN that owns two of the three theaters in San Francisco that are suitable for the presentation of Broadway-style shows in that city. The third, The Curran, is owned 100 percent by Mrs. Hays. The first case went to trial in 2017, and the Chancery Court ruled in our clients’ favor in July 2018, soundly rejecting the Nederlander claims, including an assertion that Mrs. Hays had entered into a binding oral promise to lease The Curran to the 50/50 owned company in perpetuity. The decision in the first case is now on appeal to the Supreme Court of Delaware.
In its most recent decision, the Delaware Chancery Court (Hon. Tamika Montgomery-Reeves, Vice Chancellor) rejected the Nederlander argument that a provision in the LLC Agreement of the jointly-owned company prohibited Mrs. Hays from competing for Broadway-style shows at The Curran Theatre. The Court adopted in its entirety S&C’s argument that the provision was meant to restrict such competition only when Mrs. Hays had “control over the production,” meaning control over when and where the production would play.
The S&C team that represents Mrs. and Dr. Hays was led by David Tulchin, Brian Frawley, Tracy Richelle High, Andrew Finn and Adam Brebner. The team also received invaluable advice from Charles Dowling and Benjamin Weber.