BUSINESS ENTITIES: CORPORATIONS: LIMITED LIABILITY COMPANIES: FLORIDA COURT MAY APPOINT ANCILLARY RECEIVER FOR A FOREIGN ENTITY EVEN THOUGH NO RECEIVER HAS BEEN APPOINTED ELSEWHERE

Romay v. Caribevision Holdings, Inc., ___ So. 3d ___, 39 Fla. L. Weekly D1821 (Fla. 3d DCA August 27, 2014)

Two business groups formed a corporation and a limited liability company in Delaware with corporate offices in Miami-Dade County.  When the companies became deadlocked and were unable to hold board meetings, one group sought dissolution of the business entities and the appointment of a receiver based upon Delaware law and the entities’ organizing documents.  The trial court was reluctant to appoint a receiver because of “the primacy of Delaware law,” but “appointed a ‘referee’ for the purposes of ‘facilitating the corporate board meetings,’ assuring compliance with the governing agreements, and determining ‘whether a board member must be excluded from casting a vote on any matter wherein a conflict of interest [was] alleged, subject to review by [the trial court] upon application of any party.’”  The appellate court affirmed.  “Florida’s Business Corporations Act and Limited Liability Company Act expressly authorize a Florida court to appoint an ancillary receiver here for a foreign entity ‘even though no receiver has been appointed elsewhere.’”  “These [Acts] recognize that a foreign company with operations in Florida may require local supervision even before a ‘primary’ receivership is commenced in the state of incorporation.  If and when a receivership order is entered in Delaware, the Florida receivership in this case would become ‘ancillary.’” Although relief in this case was sought based upon “the law of Delaware, the organizing documents, and the trial court’s equitable authority, rather than the [Florida Business Corporations Act or the Florida Limited Liability Company Act],” the court held that the parties were free on remand to seek relief under Florida law or in the chancery court in Delaware.