SAN FRANCISCO (CelebrityAccess) — Nederlander San Francisco (NSF) announced the company has won a victory in court after Delaware Supreme Court overturned a lower court’s ruling and blocked Curran Theatre owners Carole Shorenstein Hays and her business partners from staging several Broadway shows at Curran Theatre.
Shorenstein Hays-Nederlander Theatres LLC owns and operates the Golden Gate and Orpheum theaters in San Francisco, and claimed that Curran Theater’s Broadway performances harmed SHN’s business.
While business competition itself is not illegal, the legal dispute arose from Mrs. Hays’ acquisition and operation of the Curran Theater in direct competition with SHN, while she still retained her 50% ownership stake in Nederlander joint venture.
The Delaware Supreme Court ruled that Mrs. Hays, her husband Dr. Jeffrey Hays, and their affiliates are prohibited from staging “competitive productions at the Curran that violate [their] contractual duty to maximize SHN’s economic success.”
In a July 2018 decision, the Delaware Chancery Court ruled that Mrs. and Dr. Hays had both breached their fiduciary duties to the joint venture and that Mrs. Hays had engaged in bad faith litigation tactics warranting sanctions, a ruling Hays chose not to appeal..
The Court also declared that the Hayses are bound by provisions of SHN’s operating agreement, which prohibits SHN from showing certain competing productions in San Francisco. Despite the provisions, the Hayses moved forward with plans to stage Dear Evan Hansen and Harry Potter and the Cursed Child at the Curran Theater. SHN filed a second lawsuit in September 2018 seeking to block the Shorenstein’s presentation of these two shows at the Curran.
“We are pleased that the Delaware Supreme Court has confirmed that NSF and SHN can continue to serve the community as the leading theater operators in San Francisco, and that Mrs. Hayes should abide by her longstanding commitment to support this effort,” said Matthew Larrabee, Litigation Partner, Dechert LLP. “The court’s decision should finally put an end to the efforts of Mrs. Hayes and her affiliates to undermine SHN’s longstanding commitment to bringing the best of Broadway to Bay Area residents. The prior claims of victory in this litigation by Mrs. Hays’ representatives were obviously premature and have now been proven wrong.”
The court also ruled that Shorenstein Hays and her co-defendants were on the hook for legal expenses in the case, and singled out Mrs. Shorenstein Hays for criticism for her behavior in what the court called a “fiasco” of a deposition.
The court’s decision contains lengthy sections of the transcript from the deposition in which the court found that Hays provided “flagrantly evasive, nonresponsive, and flippant” testimony, as well as “ridiculous and problematic responses” while under oath. The court took Mrs Hays to task for her testimony, as well as her counsel, who the court said failed in their duty to ensure the integrity of the proceeding.
A rep from Curran theater did not respond to a request for comment.
