Partner Reinsurance Co. Ltd. v. RPM Mortgage Inc.

ADDITIONAL CASES Lendus, LLC, Counterclaim Plaintiff v. Partner Reinsurance Company Ltd., Counterclaim Defendant OPINION & ORDER This case arises from a failed merger agreement between defendant RPM Mortgage, Inc. (“RPM”) and non-party Entitle Direct Group, Inc. (“Entitle”), in connection with which plaintiff Partner Reinsurance Company Ltd. (“PartnerRe”) served as the “Stockholder Representative” for Entitle. PartnerRe has sued RPM, RPM’s successor in interest, LendUS, LLC (“LendUS”), and those companies’ owners (together with RPM and LendUS, “defendants”), alleging that RPM’s failure to consummate the merger breached the merger agreement. See Dkt. 121 (“Am. Compl.”). Defendants contend that Entitle, not they, breached the agreement, and have brought a counterclaim for breach of contract against PartnerRe. Before the Court is defendants’ motion for summary judgment, which argues that PartnerRe lacks contractual standing to pursue this action, either in its role as Stockholder Representative or under Entitle’s assignment to PartnerRe of its right to do so. Because the Court finds Entitle’s assignment to PartnerRe valid, it denies that motion. I. Background A. Factual Background¹ 1. Parties and Other Relevant Entities RPM was a California-based mortgage originator. Def. 56.1 1. LendUS, RPM’s successor in interest, is a Delaware limited liability company (“LLC”). Id. 2. Robert Hirt and Tracey Hirt are officers of LendUS, and indirectly own 96 percent of LendUS. Am. Compl. 86. PartnerRe is a Bermuda LLC. Def. 56.1 3. Entitle was a Delaware corporation with its principal place of business in Connecticut. Id.

4-5. During the period relevant here, PartnerRe held the majority of Entitle’s Series B preferred stock. Id. 6. 2. The Merger Agreement and Failure to Close Between 2016 and 2017, RPM and Entitle communicated and performed due diligence about RPM’s potential acquisition of Entitle. Id. 7. Those negotiations led to a February 2017 Agreement and Plan of Merger between RPM, Entitle, PartnerRe as Stockholder Representative, and two entities formed for purposes of the merger,. Id.