ORDER Denying Def Mot to Arbitrate
Anyone remember the messy legal divorce of longtime partners John Elliott Leighton and Ira Leesfield?
Well Judge Gill Freeman just entered an order denying Ira's motion to have all matters sent to arbitration.
At issue in this case is both a 1994 Employment Agreement, which has an arbitration provision, and a 2005 Shareholder Agreement, which apparently does not.
For whatever reason both appear to govern the parties' business relationship, but they are separate and distinct and not "inextricably intertwined."
Makes perfect sense, right?
Thus, Ira can't withhold the $250k apparently due to John under the Shareholder Agreement as a "set off" against what he claims are "challenged amounts" under the Employment Agreement.
Also, while the Employment Agreement is subject to mandatory and binding arbitration (which appears to be ongoing), but the Shareholder Agreement is not, Judge Freeman decided to order concurrent non-binding arbitration of the Shareholder Agreement before the same arbitrators who are considering the Employment Agreement.
(Folks, there's a reason why we litigators refer out our transactional work.)