Pit,

Douglas M. Butz, Esq. (SBN 060722)

Bradley A. Lebow, Esq. (SBN 240608)
BUTZ DUNN & DESANTIS
A PROFESSIONAL CORPORATION
Attorneys At Law
101 West Broadway, Suite 1700
San Diego, California 92101-8289
(619) 233-4777 / Facsimile (619) 231-0341

Et
Wiikets Superior Court

APR 0 6 2015
I,Ls.pax 5cot'

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pa 6 2015

Attorneys for Petitioner Richard E. Sparber

SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF SAN DIEGO
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37-2015-00011623-CU-PT-CM

IN RE SPARBER ANNEN MORRIS &

) ' CASE NO.
GABRIEL, APLC, a California corporation in ) ,
) , PETITION FOR COURT SUPERVISION
process of winding up,
) OF VOLUNTARY WINDING UP [CAL.
) CORPS. CODE 1904]
)
) JUDGE:
) ACTION FILED:
) TRIAL DATE:
)

Petitioner Richard E. Sparber ("Petitioner") alleges:

1.

Sparber Armen Morris & Gabriel, a Professional Law Corporation (hereinafter "the

Corporation") is, and at all times herein mentioned was, a professional law corporation duly
organized and existing under and by virtue of the laws of the State of California, with its principal
office in San Diego, California.
2.

Petitioner is the holder of 100 common shares of the Corporation, which represents

fifty percent (50%) of the outstanding common shares of the Corporation.

3.

The Corporation is in the process of winding up by virtue of the election by

Petitioner as a fifty percent (50%) shareholder of the corporation to dissolve, undertaken on March
17, 2015, pursuant to Section 10 of the bylaws of the Corporation and various provisions of the
California Corporations Code, including California Corporations Code 1900(a), 1903(a). A true
and correct copy of that Written Consent of Shareholders to Voluntarily Wind Up and Dissolve is

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PETITION FOR COURT SUPERVISION OF VOLUNTARY WINDING UP

attached hereto as Exhibit A. A Certificate of Election to Wind Up and Dissolve was filed with the

California Secretary of State on March 30, 2015. A true and correct copy of that Certificate of

Election to Wind Up and Dissolve, as filed with the California Secretary of State, is attached hereto

as Exhibit B. Pursuant to California Corporations Code 1903(c), the Corporation is in the

process of giving written notice by mail of the commencement of the proceeding for voluntary

winding up to all shareholders and to all known creditors and claimants whose addresses appear on

the records of the Corporation.

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4.

Supervision by the Court over all matters concerning the voluntary winding up of

the affairs of the Corporation is necessary for the protection of Petitioner and all parties in interest,
for numerous reasons including, but not limited to, those hereafter identified.
5.

Petitioner and Richard Annen ("Armen") are the sole shareholders of the

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corporation, each owning fifty percent (50%) of the issued and outstanding common shares of the

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Corporation. Petitioner and Annen are deadlocked and in dissension with respect to numerous

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matters such that the Corporation's ability to conduct business with advantage to the shareholders

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has been adversely affected.

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6.

Disputes between Petitioner and Armen arose in December 2012, when Annen

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informed Petitioner that any year-end net profit of the Corporation would be distributed as Annen

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determined in his sole discretion. Historically the firm's bonus distributions were based on

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agreement between the shareholders after all relevant information was made available and

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reviewed. With the results in hand from the firm's outside accountant, Petitioner and Annen would

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meet, confer and agree on bonus distributions for all employees and for each of them. Annen's

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demand that he have sole discretion over distributions was in direct violation of this past precedent

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as well as an October 29, 2002 duly-adopted Corporate Resolution requiring a majority vote of

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shareholders regarding shareholder/employee compensation decisions.

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7.

Thereafter, Armen unilaterally and without Petitioner's knowledge and consent

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made bonus distributions to the Corporation's employees (excluding Petitioner), as well as

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unauthorized distributions to himself in substantial amounts. Petitioner first learned of these

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unauthorized distributions in or about March 2013,

2
PETITION FOR COURT SUPERVISION OF VOLUNTARY WINDING UP

8.

Moreover, Petitioner also learned at that time that Armen had funded a portion of

that bonus distribution to himself by making a draw in that amount on the Corporation's line of

credit, again without Petitioner's knowledge and consent.

9.

In light of the disputes existing between them, Petitioner and Armen initially

discussed a reconfiguration of the Corporation in lieu of dissolution. Petitioner indicated that if

they could not reach agreement on the reconfiguration, he would move to have the Corporation

dissolved.

10.

Their reconfiguration discussions proceeded for over a year into the Summer 2014

through multiple email exchanges, without success. Petitioner initially agreed to consider a new

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compensation approach based on each shareholder enjoying his respective collections, with the

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express condition that any such agreement would also need to resolve all other details involving

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allocation of expenses and overhead.

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11.

Under the proposed, new compensation approach, all cases would still belong to the

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Corporation and all revenue received therefrom would go through the Corporation's general

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account into the shareholders' sub-accounts. Moreover, all payments for expenses would be made

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from the Corporation's general account. At some point during 2014, however, Armen caused the

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accounting reporting system to be modified such that it prevented Petitioner from determining the

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amount of revenues received from Annen's cases.

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12.

Ultimately, communication between the two broke down and no final agreement to

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reconfigure the Corporation was reached. Throughout this time, however, Annen continued to

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unilaterally make decisions regarding the management of the Corporation without consulting with

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Petitioner.

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13.

Thereafter, Petitioner communicated to Armen that dissolution was the only viable

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option for the Corporation. However, after several more months of attempting to negotiate a

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dissolution plan, Petitioner and Annen remained deadlocked and in dissension on a number of

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issues. In addition to the foregoing issues, additional issues include, but are not limited to, the

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following:

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PETITION FOR COURT SUPERVISION OF VOLUNTARY WINDING UP

a.

Ownership of matters opened by each shareholder on and after January

b.

Ownership of and entitlement to the proceeds of receivables collected by

2013;

each shareholder on and after January 1, 2013;

c.

Credits to shareholders for payment of the Corporation's payables on and

after January 1,2013;

d.

Amounts paid to shareholders and others as and for compensation from

proceeds of matters owned by the Corporation;

e.

Resolution of a dispute with a subtenant of the Corporation over potential

rents owed, which arose from Annen's refusal to pay referral fees to that subtenant;
f.

Issues related to significant personnel and human resources decisions;

g.

Control of the books and records and financial affairs of the Corporation, so

as to allow the Corporation to function on a daily basis and to pay its vendors and creditors in the
normal course; and
h.

Refusal by Annen to engage a mutually agreeable accountant/bookkeeper to

review and reconcile the Corporation's books and accounts.

14.

The deadlock and dissension regarding these issues have prevented Petitioner and

Armen from agreeing on an orderly dissolution plan and otherwise delayed the dissolution and
winding up of the Corporation.
15.

Absent Court supervision Petitioner is informed and believes and thereon alleges

that the Corporation's assets and receivables will be wasted, unilateral decisions will continue to be
made, and the Corporation will be rendered wholly unable to wind up its affairs and pay its
creditors and shareholders in accordance with the governing corporate documents and law.
Petitioner has attempted to resolve all of the foregoing issues with Amen over the past two years
but has been unable to do so, thereby necessitating this Petition.
WHEREFORE, Petitioner prays as follows:
1.

That the Court decree a winding up and dissolution of the Corporation and make

any orders as to any and all matters concerning the winding up of the affairs of the Corporation and

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PETITION FOR COURT SUPERVISION OF VOLUNTARY WINDING UP

for the protection of its shareholders and creditors as justice and equity may require, including the

appointment of a commissioner under California Corporation's Code Section 1806(e) to hear and

determine any and all matters in dispute concerning the winding up;
2.

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That the Court give and make its order prescribing what notice shall be given to the

Corporation and other persons interested in the Corporation as shareholders or creditors;

3.

That on the hearing of an order to show cause this Court shall assume jurisdiction

over the winding up of the affairs of the corporation, including all matters contained in

Corporations Code Sections 1802-1808, inclusive;

4.

For an equitable accounting as between the shareholders in the process of winding

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5.

For reasonable costs and attorneys' fees incurred by Petitioner herein; and

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6.

For such other and further relief as the Court ma

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up:

m just and proper.

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.2015

Dated:

etitioner

rd E. Spar er

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Dated:

April 1, 2015

BUTZ DUNN & DESANT1S

A Professional Corporation

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By:
2

Douglas M. B
Attorneys for
Sparber

")

itioner Richard E.

"-)

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PETITION FOR COI RI SUPERVISION OF VOLUNTARY WINDING UP

VERIFICATION
[Code Civ. Proc. 44 446, 2015.51

I, Richard E. Sparber, am the Petitioner in this proceeding. I have read the foregoing
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Petition and know the contents thereof. The same is true to my own knowledge, except as to those

matters which are therein stated on information and belief, and as to those matters, I believe them

to be true.

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I declare under penalty of perjury under the laws of the State of California that the
foregoing is true and correct and that this Verification wa

ted on

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Richard E. Soarber
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PETITION FOR COURT SUPERVISION OF VOLUNTARY WINDING UP

, 2015.

EXHIBIT A

WRITTEN CONSENT OF SHAREHOLDERS

TO VOLUNTARILY WIND UP AND DISSOLVE
SPARBER ANNEN MORRIS & GABRIEL, A PROFESSIONAL LAW
CORPORATION
The undersigned shareholder of Sparber Armen Morris & Gabriel, A Professional Law
Corporation, a California corporation, holding of record the number of shares of capital
stock of the Corporation set forth below and representing at least 50% of the voting
power, hereby adopts and approves the following action:
WHEREAS, it is in the best interests of the corporation and its shareholders that
the corporation be dissolved and its affairs wound up.
RESOLVED, that this corporation hereby elects voluntarily to wind up and
dissolve by this action of shareholders.
RESOLVED FURTHER, that the officers of the corporation take such action as
may be necessary or proper to wind up the affairs of the corporation and to dissolve it.

Date

3 U7 15-

No. of Shares
100

Certificate No.

EXHIBIT B

I ELEC STK

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of California
.Secretary
., 443 . State
of State
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641;;6,14

Domestic Stook Corporation

Certificate of Election tr.:, Wind Up And Dissolve
NOTE: To complebX the dissolution process, the iorperatien Meet aliSp tile s Cettifidate of

Dissolution pursuantto CorporationsCodesection 1905.

Thera is no fee for filing a Certificate Of E tectIoh To Wind Up and Dissolve.

IMPORTANT Read instructions before comptoting this form.

Na Space For Filing Use Only

Corporate Name (Enter the mune of the &made ototheoniotadon &Italy es It tot retort, with the dallfrefila Secret*

iir State.)

1. Name of corporation
SPARSER ANNEN MORRIS & GABRIEL, A PROFESSIONAL LAW CORPORATION
Required Statement (The following etattarient it requited by stabile one tattle not be shred)
2. The corporation has elected to wind up and dissolve.
Erection (Chem the applicable statement. Note: Only one hot Maybe checked.)
3. n The election was made by the vote of
of the voting power.

. 101)

shares of the corporation, and representing at least 50 percent

((Welber or efiato0)

0 The corporation has not issued any share; the election was Made by the board of directors of the corporation.
Signatory Authority (Check the applicable EtOtenernt Mote: Only one box may be chatted)

4.0 The umiersIgned constitutes the sole director or a majority of the climatal* now in Office of the above-named corporation.
the chairman of the board, president gr vice president and the secretary, thief financial officer,
a The undersigned constitute
secretary or Assistant treasurer of the above-riamed corporation.
treasurer, assistant

undersigried cons-Mote(s) the shareholder(s) authorized to execute this certificate by shareholders holding shares representing
Ei Thepercent
or more of the voting power of the above-named corporation.
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Verification & Execution (If additional signature spate Is necessary, the dated signature(s) - with verification(s) may be made on an attachment to this
certificate. Any attachments to this certificate are tneMporated hereto by this inference.)

that the matters set forth in this certificate are true and correct
5. I declare under penalty of perjury under the laws of the State of California
of my own knowledge.
March it
Dale

if

RICHARD E. SPARSER

_.z.
Signet . e of i 'rector, Officer or Sharenol

Type Or Print Name of Director, Officer or Shareholder

Signature of Director, Officer or Shareholder

Type Of Print Name Of Director, Officer or Shareholder

Signature of Director or Shareholder

Type or Print Name

pi Pt, Alll MFV lit /20151

Director or Shareholder
APPROVED BY SECRETARY OF STATE!