American Roller Company, Llc, v. Foster-Adams Leasing, Llp

2006 WL 1371441 (N.D. Ill. May 16, 2006)

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Nature of the Case

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Facts

Pursuant to a Purchase Agreement and Amended Notes, P purchased Ds’ stock and assets of Champion Roller. P sued Ds alleging that Ds made certain misrepresentations and breached certain warranties in the Purchase Agreement. Ds have counterclaimed to recover payments due and owing under the Notes. D seek discovery regarding a transaction, dispute, and settlement between CM Acquisitions ('CM') and Pillar Industries, two non-parties to this case. CM is one of approximately 35 investors in a company that owns P. The Amended Notes were guaranteed by CM. CM participated in the negotiation of but was not a party to, a contract for the purchase of Pillar Industries by an entity called Pillar Induction Company, LLC. CM is one of many investors in Pillar Induction. Ds claim that the man behind the curtain at both CM Acquisitions and P was behind both the transaction at issue in this case and the transaction involving Pillar. Ds want to depose Mark Skiba, previously president of Pillar Industries, and also to seek documents related to Pillar Industries as part of the depositions of P's witnesses. Ds hope that Skiba's testimony will raise an inference that P planned all along to initiate litigation after the execution of the Purchase Agreement. P claims the Pillar transaction has no relevance to the present matter as neither Mr. Skiba nor Pillar Industries had any involvement in the negotiation and execution of the Purchase Agreement and Amended Notes. Ds claim that Skiba has information regarding relevant business practices of P and such evidence could lead to additional claims against P.