ÿWPC| š‹G·SÚã)ŸÎJŠH§õD…qNµÓtЍx¨#ø‚ΛÖaâ+:Ö¡êëë݈NB_³+œ×r^âu=N R×áIo…Шð>nûüOø£{ÆÔç /nd¯/ƒ¯qÀ©ê<‹P&ÖÁ‰T!jCŠ}–}jâ±×„M0fTÔí³óJ›¬þ÷=³çëlmt²}fæ•Ë ŽŽ_ !ñü×°Ð:’‹ehÜ$ëﮇ»øÑ|y3‚µžQMè¾j:‰T½—‰·_Œ¢ PLh¿VÙ*[¬Êˆ3´Ä#|;Ž_ oÊÑóbHÝL¢ÀŒn  ÐZ#ÁìUN­ %û 0( ^ ) w5 49 M \ m^ Nu 1‡w 72þ 1u0 72¥ 0c× 0w: 1± 72> 1‡p 72÷ ) 1‡1 72¸ 1‡ê 72q,£ 0lÏ 0D;à B_˜Adobe PDFÈÈÈÈÈÈÈÈ0(ÈhH  Z‹6Times New Roman RegularX($¡¡qqÃ8â {bH8ê:i¢Ø+003|x ÿU‹ÿÀÀÀ0Ž\CEKSY_ekqAutoList11.(a)1.1.1.1.1.1. 1.3#37=CIQYag­­1.a.i.(1)(a)(i)1)a)i)(;3£$´´Ô2#ÔÚ  Ú0Ú  Ú.Ô3  Ôà0  à(Oé;$µµà0  àÔ2#ÔÚ  ÚaÚ  Ú.Ô3  Ôà0` (#(#à(ç CEMU]emu}AutoList2(a)(a)(a)(a)(a)(a)(a)(a)(a)(UhCEKQW]cioAutoList31.1.1.1.1.1.1.1.1. (ehCEKQW]cioAutoList41.1.1.1.1.1.1.1.1.(uhCEKQW]cioAutoList5I.I.I.I.I.I.I.I.I. "Ý ƒüÝ$Ýà  àòòÚ  Ú2Ú  ÚóóÝ  ÝÔ_Ô€€Again,€plaintiffs€have€supplemented€their€factual€allegations€in€the€TAC.€€The€Court,Ð ° Ðhowever,€finds€them€insufficient,€as€a€matter€of€law,€to€support€a€claim€for€corporate€dissolution.((3üÝ$¤¤Ý ƒ!ÝÝ  Ýà  àòòÚ  Ú0Ú  Úóó(#Ã$òòÚ  Ú0Ú  Úóó ÖÝ ƒüÝ$Ýà  àòòÚ  Ú1Ú  ÚóóÝ  ÝÔ_Ô€€òòSee€alsoóó€Paul€V.€Ô_ÔNiemeyerÔ_Ô,€òòet€al.óó,€òòMaryland€Rules€Commentaryóó€180€(3d€ed.€2003). dÝ ƒ!ÝÝ  ÝÔ_ÔÑ8€½bXXdédÈ8ÑCOSTA€BRAVA€PARTNERSHIP€III,à À à*à0  àIN€THEа(#(# ÐL.P.,€òòet€al.óóÐ ™é Ѐ€€€à  àà ` àà ¸ àà  àà h àà À à*à0  àCIRCUIT€COURTЂÒ(#(# Ðà  àPlaintiffs,Ð k» Ѐ€€€€€€€€€€€€€€€à0 ` àà0¸ ` (#` (#àà  àà h àà À à*à0¸ (#¸ (#àFORÐT¤(#(# Ðv.Ð =  Ðà  à€€€€€€€€€€à0 ` àà ¸ àà  àà h àà À à*à0` (#` (#àBALTIMORE€CITYÐ& v(#(# ÐTELOS€CORPORATION,€òòet€al.óóÐ  _ Ðà  àà ` àà ¸ àà  àà h àà À à*à0  àPart€20Ðø H(#(# Ðà  àDefendants.Ð á 1  Ðà  àà ` àà ¸ àà  àà h àà À à*à0  àCase€No.:€24„C„05„009296€€€€€€€€€€€€€€€€€€€€€€€€€€ÐÊ  (#(# Ðà  àà ` àà ¸ àà  àÌ******************************************************************************Ð œì  Ѐ€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€ò òòòMEMORANDUM€AND€OPINIONó óóóÐ …Õ  ÐÌÌÓ€ (uh83ÓÝ"‚3£"ÝÝ  ÝÝ‚3£ÃÝÔ2uhÔÚ  ÚIÚ  Ú.Ô3  Ôà0  àÝ  ÝòòProcedural€Backgroundóó݃3£ÃðÝŒÐC“(#(# ÐŒÝ  ÝÌÓÓà  àà ` àFollowing€the€Courtððs€Order€of€January€7,€2008,€dismissing€with€prejudice€CountsÐ e ÐVI€and€VII€(the€derivative€claims)€of€the€plaintiffsðð€Second€Amended€Complaint,€plaintiffsÐ ç7 Ðaltered€the€legal€theories€supporting€their€remaining€counts€and€filed€on€February€13,€2008,€aÐ ¹  ÐThird€Amended€Complaint€(ð ðTACðð).€€In€addition€to€the€claims€contained€in€the€SecondÐ ‹Û ÐAmended€Complaint€for€the€appointment€of€a€receiver€and€dissolution€of€a€corporation€(CountsÐ ]­ ÐIII€and€IV),€the€TAC€included€new€counts€for€breach€of€contract€against€Telos€(Count€VIII),€forÐ / Ðpreliminary€and€permanent€injunction€against€Telos€(Count€IX),€and€for€an€accounting€(CountÐ  Q ÐX).€€In€an€effort€to€preserve€their€arguments€for€appeal€the€claims€asserted€in€Counts€I,€II,€V,€VIÐ Ó!#  Ðand€VII,€all€of€which€had€been€dismissed€by€the€Court€in€previous€rulings,€were€pled€again€in€theÐ ¥#õ" ÐTAC.€€The€parties,€however,€by€stipulation€approved€by€Order€of€the€Court€on€March€7,€2008,Ð w%Ç $ Ðagain€dismissed€these€counts€with€prejudice,€leaving€before€the€Court€in€the€TAC€only€CountsÐ I'™"& ÐIII,€IV,€VIII,€IX€and€X.€€As€to€those€counts,€defendant€Telos€Corporation€filed€a€motion€toÐ )k$( Ðdismiss€or€strike€the€TAC€or€for€summary€judgment€on€February€20,€2008.€€The€motion€was€fullyÐ í*=&* Ðbriefed€by€both€sides€and€argued€before€the€Court€on€March€11,€2008.€€The€Court€will€nowÐ ° Ðaddress€the€merits€of€the€defendantððs€motion.Ð ‚Ò ÐÝ"‚3£"ÝÝ  ÝÝ‚3£E ÝÔ2uhÔÚ  ÚIIÚ  Ú.Ô3  Ôà0  àÝ  ÝòòTelosðð€Motion€to€Strike€Portions€of€the€TACóó݃3£E r ÝŒÐT¤(#(# ÐŒÝ  Ýà  àà ` àThe€parties€having€stipulated€to€the€dismissal€of€Counts€I,€II,€V,€VI€and€VII€of€theÐ & v ÐTAC,€Telos€now€asks€the€Court€to€strike€all€the€allegations€contained€in€the€TAC€in€support€ofÐ ø H Ðthose€claims,€as€well€as€ðð€392,€alleging€a€Securities€and€Exchange€Commission€(ð ðSECðð)Ð Ê   Ðinvestigation€into€Telosðð€accounting€practices.Ð œì  Ðà  àà ` àWhile€the€Court€clearly€has€discretion€to€strike€causes€of€action€in€the€TAC€onÐ n¾  Ðwhich€summary€judgment€has€been€granted€previously,€òòHudson€v.€Prime€Retail,€Incóó.,€No.€24„C„Ð @ Ð03„5806,€2004€WL€1982383,€at€*10€(Md.€Cir.€Ct.€Apr.€1,€2004),€our€procedural€rules€do€notÐ b Ðprovide€support€for€the€concept€of€striking€allegations€from€a€complaint€after€certain€counts€haveÐ ä4 Ðbeen€dismissed€with€prejudice€by€stipulation€of€the€parties,€as€here.€€Md.€Rule€2„322(e)€states:Ð ¶ Ðð ðOn€motion€made€by€a€party€.€.€.,€the€court€may€order€any€insufficient€defense€or€any€improper,Ð ˆØ Ðimmaterial,€impertinent,€or€scandalous€matter€stricken€from€any€pleading[.]ðð€As€the€RulesÐ Zª ÐCommentary€indicates,€when€a€motion€is€based€on€an€immaterial€or€impertinent€matter,€aÐ ,| Ðshowing€of€substantial€abuse€is€necessary€to€justify€striking.€€A€motion€to€strike€for€improper€orÐ þN Ðscandalous€matters,€as€here€alleged,€has€a€lower€threshold€showing.€€Paul€V.€Niemeyer,€òòet€al.óó,Ð Ð!   ÐòòMaryland€Rules€Commentaryóó€208€(3dòòóó€ed.€2003).€€In€this€Courtððs€judgment,€the€allegationsÐ ¢#ò" Ðcontained€in€the€TAC€which€support€the€stricken€counts€may€also€be€pertinent,€directly€orÐ t%Ä $ Ðindirectly,€to€the€remaining€counts€in€the€TAC€and€are,€therefore,€neither€improper€norÐ F'–"& Ðscandalous.€€As€to€ðð€392,€Telos€maintains€that€a€letter€from€the€SEC€dated€February€22,€2008,€putÐ )h$( Ðan€end€to€any€inferences€of€improper€accounting€that€an€SEC€investigation€may€have€caused.€Ð ê*:&* ÐThe€parties€are€in€continued€disagreement€about€the€scope€of€the€alleged€SEC€investigation,Ð ° ÐTelos€asserting€that€it€related€only€to€the€companyððs€10„K€filings€and€plaintiffs€asserting€that€theÐ ‚Ò ÐSEC€request€for€information€directed€to€them€was€for€information€relevant€to€the€currentÐ T¤ Ðlitigation€between€the€parties.€€Whether€this€paragraph€constitutes€an€allegation€supportive€of€anyÐ & v Ðof€the€remaining€counts€of€the€TAC€may€be€questionable,€but€the€Court€does€not€find€that€it€isÐ ø H Ðwithin€the€scope€of€materials€subject€to€striking€under€Md.€Rule€2„322.€€Accordingly,Ð Ê   Ðdefendantððs€motion€to€strike€materials€from€the€TAC€will€be€ò òDENIEDó ó.Ð œì  ÐÝ"‚3£"ÝÝ  ÝÝ‚3£ÍÝÔ2uhÔÚ  ÚIIIÚ  Ú.Ô3  Ôà0  àÝ  ÝòòTelosðð€Motion€to€Dismiss€Counts€III,€IV,€VIII,€IX€and€X€as€Derivative€Claimsóó݃3£ÍúÝŒÐtÄ (#(# ÐŒÝ  Ýà  àà ` àòòóóThe€ultimate€relief€sought€by€plaintiffs€in€this€litigation,€whether€through€theÐ F– Ðvehicle€of€receivership,€dissolution,€proof€of€breach€of€contract,€injunctive€relief€or€accounting,Ð h Ðis€the€recovery,€preservation€and€sale€of€defendantððs€assets€at€sufficient€value€to€redeemÐ ê: Ðplaintiffsðð€public€preferred€shares€(the€ð ðERPSðð)€and€to€pay€them€the€value€of€any€accrued€interestÐ ¼  Ðthereon.€€This€poses€a€serious€and,€presumably,€fatal€problem€for€plaintiffs€as€they€attempt€toÐ ŽÞ Ðcharacterize€their€remaining€claims€as€direct€rather€than€derivative.€€Telos€correctly€asserts€thatÐ `° Ðthe€ERPS€holders€are€not€ð ðuniqueðð€shareholders€because€they€are€in€some€ways€similarly€situatedÐ 2‚ Ðto€other€Telos€shareholders€and€because€the€ERPS€rank€in€priority€junior€to€Telosðð€seniorÐ  T Ðpreferred€stock,€senior€subordinated€debt,€trade€creditors€and€vendors,€and€the€Wells€Fargo€creditÐ Ö!&  Ðfacility,€all€of€which€must€be€satisfied€before€payment€of€the€ERPS.€€Plaintiffs€must€allege€anÐ ¨#ø" Ðinjury€ð ðthat€is€separate€and€distinct€from€any€injury€suffered€either€directly€by€the€corporation€orÐ z%Ê $ Ðderivativelyðð€by€other€shareholders.€€òòMona€v.€Mona€Elec.€Group,€Inc.óó,€176€Md.App.€672,€697Ð L'œ"& Ð(2005)€(citations€omitted).€€ð ðA€direct€suit€requires€specific€allegations€that€the€complainingÐ )n$( Ðshareholder€individually€suffered€damage,€unrelated€to€harm€to€the€corporation.ðð€€òòStrunk€v.Ð ð*@&* ÐAdvent€Intððl€Corpóó.,€No.€CV„05„457,€2006€WL€978983,€at€*4€n.3€(Me.€Super.€Ct.€Mar.€27,€2006)Ð ° Ð(citing€òòTooley€v.€Donaldson,€Lufkin€&€Jenrette,€Inc.óó,€845€A.2d€1031,€1033€(Del.€òòóó2004)).€Ð ‚Ò ÐBecause€the€injuries€alleged€and€the€relief€sought€here€are€not€unique€to€them,€plaintiffs€areÐ T¤ Ðunable€to€assert€direct€claims€against€Telos.Ð & v Ðà  àà ` àDefendant€also€contends€that€plaintiffs€are€judicially€estopped€from€bringing€theirÐ ø H Ðclaims€directly.€€This€contention€is€based€upon€the€statements€made€by€plaintiff€Costa€Brava€inÐ Ê   Ðthe€Virginia€litigation€against€the€corporationððs€former€outside€auditors.€€òòCosta€BravaÐ œì  ÐPartnership,€III,€L.P.€v.€Goodman€&€Company,€LLP,€óóCircuit€Court€of€the€County€of€Fairfax,Ð n¾  ÐVirginia,€At€Law€Case€No.:€CL€20057931.òòòòóóóó€€Telos€asserts€that€Costa€Brava€represented€to€theÐ @ ÐVirginia€court€that€all€the€claims€in€the€Maryland€action€were€derivative€and€that€the€court€reliedÐ b Ðon€that€assertion€in€denying€a€stay€to€permit€the€Maryland€litigation€to€proceed€with€priority.Ð ä4 Ðà  àà ` àJudicial€estoppel€ð ðprevents€ðða€party€who€successfully€pursued€a€position€in€a€priorÐ ¶ Ðlegal€proceeding€from€asserting€a€contrary€position€in€a€later€proceeding.ðððð€òò€Gordon€v.€Posneróó,Ð ˆØ Ð142€Md.App.€399,€424€(2002)€(quoting€òòRoane€v.€Washington€County€Hosp.óó,€137€Md.App.€582,Ð Zª Ð592€(2001),€òòcert.€deniedóó,€364€Md.€463€(2001),€òòcert.€deniedóó,€369€Md.€180€(2002).€€The€UnitedÐ ,| ÐStates€Supreme€Court€in€òòNew€Hampshire€v.€Maineóó,€532€U.S.€742,€743€(2001),€noted€that€theÐ þN Ðjudicial€estoppel€doctrine€has€long€been€recognized€in€American€courts€as€ð ðprohibiting€partiesÐ Ð!   Ðfrom€deliberately€changing€positions€according€to€the€exigencies€of€the€moment.ðð€€In€that€caseÐ ¢#ò" ÐJustice€Ginsburg€identified€several€factors€to€be€considered€when€a€court€addresses€the€doctrine.€Ð t%Ä $ ÐIn€the€Fourth€Circuit,€the€ð ðdeterminative€factorðð€appears€to€be€whether€the€party€who€is€allegedÐ F'–"& Ðto€be€estopped€ð ðððintentionally€misled€the€court€to€gain€unfair€advantage.ðððð€€òòLowery€v.€Stovallóó,òò€etÐ )h$( Ðal.óó,€92€F.3d€219,€225€(4thòòóó€Cir.€1996)òò€óó(quoting€òòTenneco€Chem.,€Inc.,€v.€William€T.€Burnette€&Ð ê*:&* ÐCo.,€Inc.óó,€691€F.2d€658,€665€(4thòòóó€Cir.€1982));€òòJohn€S.€Clark€Co.€v.€Faggert€&€Frieden,€P.C.óó,€65Ð ° ÐF.3d€26,€29€(4thòòóó€Cir.€1995)€(quoting€òòTenneco€Chem.,€Inc.óó,€691€F.2d€at€665).Ð ‚Ò Ðà  àà ` àWhile€there€are€glaring€inconsistencies€in€the€assertions€made€by€Costa€Brava€inÐ T¤ Ðthis€case€and€in€the€Virginia€litigation,€and€while€it€appears€to€the€Court€that€Costa€Brava€hasÐ & v Ðbeen€willing€to€make€self€serving€representations€in€disregard€of€the€duty€it€owes€the€Court€to€beÐ ø H Ðcandid,€the€Court€is€not€prepared€to€say€that€Costa€Brava€deliberately€attempted€to€mislead€theÐ Ê   ÐVirginia€court€or€that€Telos€was€directly€prejudiced,€given€the€fact€that€it€was€not€a€party€to€theÐ œì  ÐVirginia€litigation.€€Plaintiffs€may€not€be€judicially€estopped€from€relabeling€their€claims€asÐ n¾  Ðdirect,€but€it€does€appear€that,€prior€to€dismissal€of€the€derivative€claims,€they€considered€all€ofÐ @ Ðtheir€claims€in€the€present€action€to€be€in€the€nature€of€claims€for€the€benefit€of€the€corporation,Ð b Ðnot€themselves.€€Ð ä4 Ðà  àà ` àOn€the€basis€alone,€however,€of€the€Courtððs€determination€above€that€the€injuriesÐ ¶ Ðclaimed€and€relief€sought€are€not€unique€to€plaintiffs€here,€the€Court€must€find€that€their€claimsÐ ˆØ Ðare€derivative€and€not€direct.€€The€remaining€counts€in€the€TAC,€therefore,€will€be€ò òDISMISSEDó óÐ Zª Ðwith€prejudice€for€these€reasons€and€for€those€stated€below.Ð 2‚ ÐÝ"‚3£"ÝÝ  ÝÓÓÝ‚3£C2ÝÔ2uhÔÚ  ÚIVÚ  Ú.Ô3  Ôà0  àÝ  ÝòòCounts€III,€IV,€VIII,€IX€and€X€of€the€TAC€Fail€to€State€Claims€Upon€Which€Relief€Can݃3£C2‚2݌РT(#(# ÐŒÝ  ÝÓÓà  àBe€GrantedóóÐ í = Ðà  àà ` àCount€III€seeks€the€appointment€of€a€receiver€pursuant€to€the€Courtððs€generalÐ ¿"! Ðequitable€powers.€€This€claim€for€relief€is€not€new€to€the€TAC.€€The€allegations€contained€in€theÐ ‘$á# ÐTAC€are€essentially€the€same€as€those€contained€in€plaintiffsðð€Amended€Complaint€and€repeatedÐ c&³!% Ðin€plaintiffsðð€Second€Amended€Complaint.€€Although€the€receivership€count€in€both€of€the€earlierÐ 5(…#' Ðcomplaints€withstood€dismissal€in€the€Courtððs€rulings€of€March€30,€2006,€and€June€6,€2007,Ð *W%) Ðrespectively,€plaintiffsðð€reliance€on€those€rulings€is€misplaced.€€The€TAC€represents€plaintiffsððÐ Ù+)'+ Ðthird€bite€at€the€apple.€€The€Court€granted€plaintiffs€wide€latitude€in€its€earlier€rulings,€denyingÐ ° Ðdefendantsðð€motion€to€dismiss€on€March€30,€2006,€in€order€to€permit€Costa€Brava€to€engage€inÐ ‚Ò Ðdiscovery€and€to€develop€an€adequate€factual€basis€for€its€allegations.€€The€Court€then€conductedÐ T¤ Ða€hearing€on€these€claims€on€October€18,€2006,€and,€on€the€basis€of€evidence€presented€at€thatÐ & v Ðhearing,€denied€Costa€Bravaððs€request€for€the€appointment€of€a€receiver€in€an€Order€datedÐ ø H ÐNovember€29,€2006.€€This€same€claim€for€relief€survived€the€motion€to€dismiss€directed€at€theÐ Ê   ÐSecond€Amended€Complaint,€the€Court€again€citing€briefly€to€cases€which€recited€the€generalÐ œì  Ðstandard€for€review€of€motions€directed€at€the€pleadings.€€The€parties€are€now,€however,€wellÐ n¾  Ðinto€their€third€year€in€this€litigation.€€It€is€no€longer€appropriate€for€the€Court€to€impose€aÐ @ Ðsuperficial€analysis€of€the€pleadings,€given€that€the€record€is€so€well€developed€and€that€the€CourtÐ b Ðand€the€parties€are€all€aware€of€the€essential€facts€underlying€plaintiffsðð€claim.€€While€the€CourtððsÐ ä4 Ðfocus€at€this€point€must€still€remain€on€the€adequacy€of€the€pleadings€alone,€it€is€no€longerÐ ¶ Ðpermissible€to€allow€them€to€pass€muster€without€careful€consideration€of€the€factual€allegationsÐ ˆØ Ðand€whether€they€may,€in€fact,€provide€a€basis€for€the€requested€relief.Ð Zª Ðà  àà ` àPlaintiffs€have€the€burden€to€allege€facts€showing€fraud,€spoliation,€or€imminentÐ ,| Ðdanger€of€the€loss€of€property€unless€a€receivership€is€ordered.€€òòHamzavi€v.€Bowenóó,€126€Md.App.Ð þN Ð492,€497„98€(1999).€€In€November€of€2006,€plaintiffsðð€request€for€the€appointment€of€a€receiverÐ Ð!   Ðor€a€special€fiduciary€agent€was€denied€for€failure€to€prove€specific€facts€showing€illegality,Ð ¢#ò" Ðoppression€or€fraudulent€acts€that€would€empower€the€Court€to€grant€such€an€extraordinaryÐ t%Ä $ Ðremedy.€€òòCosta€Brava€Partnership€III,€L.P.,€et€al.€v.€Telos€Corp.,€et€al.,€óó24„C„05„009296,€2006Ð F'–"& ÐWL€4476413€(Md.€Cir.€Ct.€Nov.€29,€2006).€€Plaintiffs€have€supplemented€their€factualÐ )h$( Ðallegations€in€the€TAC,€and€the€Court€is€intimately€familiar€with€those€allegations€and€finds€themÐ ê*:&* Ðinadequate,€as€a€matter€of€law,€to€support€a€claim€for€receivership.€€Ð ° Ðà  àà ` àAt€this€point€in€the€litigation,€Telos,€too,€has€sharpened€its€focus€upon€plaintiffsððÐ ‚Ò Ðfactual€allegations.€€Armed€with€the€Courtððs€November€2006€ruling,€they€contend€that€plaintiffsÐ T¤ Ðlack€a€reasonable€expectation€that€the€ERPS€will€be€redeemed€under€the€present€circumstancesÐ & v Ðand€that€the€non„payment€of€dividends€on€the€ERPS€could€amount€to€fraudulent€or€oppressiveÐ ø H Ðconduct€justifying€the€appointment€of€a€receiver.€€Plaintiffsðð€new€theories€about€contractualÐ Ê   Ðbreach,€constructive€dividends€or€the€potential€transfer€of€corporate€assets€to€subsidiaries€areÐ œì  Ðinsufficient€to€bolster€plaintiffsðð€claim€for€the€appointment€of€a€receiver€because€the€essentialÐ n¾  Ðfacts€are€unchanged.€€As€the€Maryland€appellate€courts€have€repeatedly€stated:€ð ð[T]he€stricturesÐ @ Ðof€common€law€pleading,€whereby€the€causes€of€action€pled€define€the€action,€have€beenÐ b Ðreplaced€by€fact„based€pleading€so€that€remedies€sought€serve€to€delineate€the€type€of€action,Ð ä4 Ðwhether€it€be€in€law€or€equity.ðð€€òòVer€Brycke€v.€Ver€Bryckeóó,€379€Md.€669,€696„97€(2004)€(citingÐ ¶ ÐòòScott€v.€Jenkinsóó,€345€Md.€21,€27„28€(1997)).׃×Ý ƒ#ÃÝòòÚ  Ú1Ú  ÚóóÝ  Ý×  ×€€Despite€plaintiffsðð€best€efforts€to€re„characterizeÐ ˆØ Ðthe€factual€allegations€in€order€to€render€them€adequate€to€support€a€claim€for€the€appointment€ofÐ Zª Ða€receiver,€they€have€failed€to€do€so.€€Consequently,€it€is€wholly€proper€for€the€Court€to€grant€aÐ ,| Ðmotion€to€dismiss€if€the€TAC€does€not€disclose€on€its€face€a€legally€sufficient€cause€of€action.€Ð þN ÐòòHeritage€Harbor,€LLC€v.€John€J.€Reynolds,€Inc.óó,€143€Md.App.€698,€710€(2002)€(citing€òòRossaki€v.Ð Ð!   ÐNUS€Corp.óó,€116€Md.App.€11€(1997)).€€€In€the€absence€of€additional€significant€allegations€toÐ ¢#ò" Ðsupport€this€claim,€the€Court€must€grant€defendantððs€motion€to€ò òDISMISSó ó€with€prejudice.€€Ð t%Ä $ Ðà  àà ` àCount€IV€seeks€dissolution€of€the€corporation€pursuant€to€Md.€Code€Ann.,€Corps.Ð L'œ"& Ð&€Assððns€ðð€3„413(b)(2)€and€ðð€3„414.€€This€count€must€suffer€the€same€fate€as€that€of€Count€III.€Ð )n$( ÐWhile€it€survived€two€motions€to€dismiss€when€asserted€in€plaintiffsðð€Amended€Complaint€andÐ ° ÐSecond€Amended€Complaint,€it€too€must€be€judged€by€the€sufficiency€of€the€facts€pled.€€MoreÐ ‚Ò Ðthan€a€year€after€the€hearing€on€plaintiffsðð€request€for€appointment€of€a€receiver,€plaintiffs€areÐ T¤ Ðstill€unable€to€meet€their€burden€of€alleging€sufficient€facts€to€support€their€allegations€of€fraud,Ð & v Ðoppression€and€òòultra€viresóó€acts€which€might€give€rise€to€an€appropriate€claim€for€dissolution.€Ð ø H ÐGiven€that€these€allegations€are€being€repeated,€without€more,׃×Ý ƒ#ÃÝòòÚ  Ú2Ú  ÚóóÝ  Ý×  ×€at€the€eleventh€hour€in€the€TAC,Ð Ê   Ðthe€Court€is€compelled€to€ò òDISMISSó ó€plaintiffsðð€Count€IV€with€prejudice.€€òòSeeóó€òòCosta€BravaÐ œì  ÐPartnershipóó,€òòIII,€L.P.,€et€al.,€v.€Telos€Corp,€et€al.óó,€24„C„05„009296,€2006€WL€4476413€(Md.€Cir.Ð tÄ  ÐCt.€Nov.€29,€2006).Ð F– Ðà  àà ` àCount€VIII€attempts€to€set€forth€a€claim€for€breach€of€contract€against€Telos.€€TheÐ h Ðclaim€is€predicated€upon€the€registration€statement€for€the€ERPS,€Telosðð€charter€and€various€SECÐ ê: Ðfilings€made€by€the€corporation.€€The€claim€is€based€upon€Telosðð€failure€to€continue€to€payÐ ¼  Ðplaintiffs€PIK€dividends€after€1991,€its€failure€to€meet€its€redemption€schedule€for€the€ERPS€atÐ ŽÞ Ðthe€share€price€stated€in€the€charter€amendment,€plaintiffsðð€claim€that€Telos€has€made€variousÐ `° Ðconstructive€dividends€in€violation€of€the€redemption€and€liquidation€priority€owed€to€the€ERPSÐ 2‚ Ðholders€and,€finally,€a€claim€for€anticipatory€breach€of€contract€relating€to€Telosðð€issuance€ofÐ  T Ðstock€options€in€Xacta.Ð Ö!&  Ðà  àà ` àIn€summary,€plaintiffs€contend€that€the€ERPS€registration€statement€permits€TelosÐ ¨#ø" Ðto€pay€dividends€on€the€ERPS€in€cash€or€in€PIK€dividends,€as€long€as€the€option€is€exercisedÐ z%Ê $ Ðprior€to€1995.€€Telos€paid€PIK€dividends€in€1990€and€1991€but€not€thereafter.€€Plaintiffs€contendÐ L'œ"& Ðthat€it€is€a€breach€of€Telosðð€contractual€obligations€to€renege€on€its€intention€to€continue€to€payÐ ° ÐPIK€dividends€to€1995€because,€once€the€election€was€made€to€do€so,€Telos€is€without€authorityÐ ‚Ò Ðto€reverse€its€decision.€€But€in€the€judgment€of€the€Court€neither€the€ERPS€registration€statementÐ T¤ Ðnor€the€company€charter€and€Articles€of€Amendment€and€Restatement€can€be€read€to€give€rise€toÐ & v Ða€contractual€obligation€with€Telos€to€pay€plaintiffs€accrued€PIK€dividends€at€the€time€of€the€firstÐ ø H Ðscheduled€redemption€date€or€anytime€thereafter.€€The€law€is€clear€that€a€corporate€board€mayÐ Ê   Ðrevoke€stock€dividends,€even€if€they€have€already€been€declared,€up€until€the€time€they€areÐ œì  Ðissued.€€òòSeeóó€11€William€Meade€Fletcheròò,€et€al.óó,€Fletcher€Encyclopedia€of€the€Law€of€PrivateÐ n¾  ÐCorp.€ðð€5323.10€(perm.€ed.,€rev.€vol.€2007);€18B€Am.€Jur€2dòòóó€Corp.€ðð€1052;€òòsee€alsoóó€òòStaats€v.Ð @ ÐBiograph€Co.óó,òò€óó236€F.€454,€459€(2ndòòóó€Cir.€1916).Ð b Ðà  àà ` àPlaintiffs€also€claim€that€they€own€a€superior€dividend€and€liquidation€preferenceÐ ä4 Ðby€virtue€of€the€registration€statement€and€corporate€charter€which€has€matured€into€an€equitableÐ ¶ Ðlien€as€a€result€of€Telosðð€distribution€of€corporate€earnings€or€assets€to€security€holders€junior€toÐ ˆØ Ðthe€ERPS.€€This€Court,€having€already€determined€that€the€ERPS€are€not€debt€instruments,€isÐ Zª Ðunpersuaded€by€the€authorities€cited€by€plaintiffs€for€the€proposition€that€the€actions€alleged€inÐ ,| Ðthe€TAC€amount€to€a€violation€of€their€contractual€preference€and€impose€an€equitable€lien.€Ð þN ÐIndeed€the€case€relied€upon€by€plaintiffs,€òòMontgomery€County€v.€May€Dept.€Stores€Co.óó,€352€Md.Ð Ð!   Ð183€(1998),€states€that€an€equitable€lien€arises€from€the€ð ðððspecific€enforcement€of€a€contract€toÐ ¢#ò" Ðassign€property€as€securityðððð€for€a€debt€or€obligation,€and€the€intention€to€create€a€lien€must€beÐ t%Ä $ Ðð ðððapparent€from€the€instrument€and€circumstances€leading€to€it.ðððð€€òòId.óó€at€196€(quoting€òòKeyworthÐ F'–"& Ðv.€Israelsonóó,€240€Md.€289,€305€(1965)).€€The€ERPS€instrument€does€not,€as€a€matter€of€law,Ð )h$( Ðestablish€for€plaintiffs€an€interest€in€Telosðð€corporate€assets€or€earnings€as€security€for€a€debt.€Ð ê*:&* ÐThus,€plaintiffsðð€theory€that€their€contractual€rights€have€matured€into€an€equitable€lien€isÐ ° Ðunavailing.Ð ‚Ò Ðà  àà ` àPlaintiffsðð€third€attempt€to€support€its€contract€claim€represents€an€effort€toÐ T¤ Ðtransport€from€tax€law€the€concept€of€€ð ðconstructive€dividendsðð€and€to€so€characterize€a€series€ofÐ & v Ðallegations€in€the€TAC€as€such,€which€plaintiffs€contend€trigger€a€violation€of€its€contractualÐ ø H Ðredemption€and€liquidation€priority.€€The€problem€with€the€plaintiffsðð€argument€is€that€it€isÐ Ê   Ðunsupported€by€the€law.€€Other€courts€have€been€unwilling€to€transpose€the€tax€law€concept€ofÐ œì  Ðconstructive€dividends€to€the€corporate€setting€and€to€interfere€with€a€corporate€boardððsÐ n¾  Ðdiscretion€to€declare€appropriate€dividends.€€òòSeeóó€òòMann„Paller€Foundation,€Inc.,€v.€EconometricÐ @ ÐResearch,€Inc.óó,€644€F.Supp.€92,€96€(D.D.C.€1986).òòóó€€This€Court€agrees.€€The€present€action€is€notÐ b Ðone€to€compel€directors€to€declare€and€pay€a€dividend€in€which€each€shareholder€may€sueÐ ä4 Ðindividually€for€his€own€account.€€Rather,€it€is€an€effort€to€recapture€improper€or€excessiveÐ ¶ Ðcompensation€to€Telosðð€officers€and€primary€benefactor€or€assets€transferred€to€subsidiaries€andÐ ˆØ Ðsuch€a€cause€of€action€must€be€brought€derivatively,€rather€than€individually.€€òòId.óó€at€98.Ð Zª Ðà  àà ` àFinally,€plaintiffs€rest€their€breach€of€contract€claim€on€the€theory€of€anticipatoryÐ ,| Ðbreach€in€the€event€that€there€is€a€future€or€contemplated€sale€of€Telosðð€subsidiary,€Xacta.€Ð þN ÐBecause€such€a€transaction€may€trigger€Xactaððs€stock€options€for€the€benefit€of€Telosðð€officersÐ Ð!   Ðand€primary€beneficiary,€plaintiffs€contend€that€this€is€a€further€illustration€of€a€violation€of€theirÐ ¢#ò" Ðcontractual€priority€rights.€€This€novel€theory€is€also€unsupported€by€the€law.€€As€the€Court€hasÐ t%Ä $ Ðheld,€ERPS€holders€do€not€possess€an€unconditional€right€to€redemption€of€their€public€preferredÐ F'–"& Ðshares.€€Those€obligations€are€conditioned€upon€the€legal€availability€of€funds€and€otherÐ )h$( Ðobligations€which€have€been€detailed€repeatedly€in€these€proceedings.€€Without€a€clear€Ð ê*:&* Ðcontractual€right,€there€can€be€no€anticipatory€breach€and€plaintiffsðð€theory€must€fail.€Ð ° ÐAccordingly,€the€Court€will€ò òDISMISSó ó€the€breach€of€contract€count€(Count€VIII)€with€prejudice.Ð ‚Ò Ðà  àà ` àCount€IX€of€the€TAC€requests€a€preliminary€and€permanent€injunction€againstÐ Zª ÐTelos€to€prevent€it€from€engaging€in€any€of€the€activities€that€formed€the€basis€for€plaintiffsððÐ , | Ðclaims€for€breach€of€its€contractual€right€to€dividend€and€redemption€priority.€€€PlaintiffsððÐ þ N Ðentitlement€to€relief€under€this€count€must€necessarily€rise€or€fall€on€the€merits€of€its€claims€forÐ Ð  Ðbreach€of€contract€under€Count€VIII.€€Because€that€count€will€be€dismissed€with€prejudice€for€theÐ ¢ò  Ðreasons€stated€above,€Count€IX€must€be€ò òDISMISSEDó ó€with€prejudice€as€well.Ð tÄ  Ðà  àà ` àCount€X€of€the€TAC€seeks€an€accounting€of€the€stated€capital€attributable€to€theÐ Lœ ÐERPS€from€the€time€of€their€first€offering€in€1989€to€the€present.€€While€making€reference€toÐ n ÐMarylandððs€statutes€which€obligate€a€Maryland€corporation€to€make€annual€reports€and€to€keepÐ ð@ Ðbooks€and€records,€the€gist€of€plaintiffsðð€contention€is€that€Telos€has€not€properly€accounted€forÐ Â Ðits€assets€in€its€public€filings.€€This€is€not€a€basis€upon€which€to€predicate€a€cause€of€action€for€anÐ ”ä Ðequitable€accounting€under€Maryland€law.€€òòAlternatives€Unltd.,€Inc.,€v.€New€Balt.€City€Bd.€ofÐ f¶ ÐSchool€Commððr,€et€al.óó,€155€Md.App.€415,€507„511€(2004).€€The€Court€is€inclined€to€agree€withÐ 8ˆ ÐTelos€that€the€plaintiffs€are€attempting€to€use€the€vehicle€of€an€equitable€accounting€to€obtainÐ  Z Ðinformation€otherwise€unavailable€to€them,€either€as€a€result€of€protective€orders€entered€in€theÐ Ü!,  Ðpresent€litigation€or€in€the€Virginia€litigation.€€Given€the€extraordinary€circumstance€thatÐ ®#þ" Ðplaintiffs€have€placed€two€individuals€on€the€board€of€Telos€Corporation€and€that€they€haveÐ €%Ð $ Ðmaintained€their€own€lawsuit€to€obtain€any€information€to€which€they€are€entitled€in€theirÐ R'¢"& Ðcapacity€as€directors,€this€count€must€be€dismissed€because€the€discovery€plaintiffs€seek€here€isÐ $)t$( Ðotherwise€available€to€them.€€òòBecker€v.€Frederick€W.€Lipps€Co.óó,€131€Md.€301€(1917).€òòBut€seeÐ ö*F&* ÐSilver€Hill€Sand€and€Gravel€Co.€v.€Coroza€Corp.óó,€184€Md.€226,€228„30€(1944)€(plaintiffÐ ° Ðsufficiently€alleged€the€necessity€of€court€ordered€discovery€not€otherwise€available).€€Moreover,Ð ‚Ò Ðif€the€allegations€contained€in€Count€X€were€deemed€to€be€accurate,€there€is€no€adequateÐ T¤ Ðexplanation€as€to€why€the€relief€sought€would€not€benefit€all€classes€of€Telosðð€shareholders,Ð & v Ðrendering€this€claim€in€the€nature€of€a€derivative€one€that€cannot€be€brought€directly€at€this€pointÐ ø H Ðin€the€litigation.€€Accordingly,€Count€X€of€the€TAC€will€be€ò òDISMISSEDó ó€with€prejudice.Ð Ê   ÐÝ"‚3£"ÝÝ  ÝÝ‚3£YtÝÔ2uhÔÚ  ÚVÚ  Ú.Ô3  Ôà0  àÝ  Ýòò€óóòòConclusionóó݃3£Yt†t݌Тò (#(# ÐŒÝ  Ýà  àà ` àThe€present€litigation€has€been€lengthy€and€certainly€costly€to€the€parties.€€As€aÐ tÄ  Ðresult€of€the€Courtððs€ruling€on€the€present€motion,€it€will€come€to€an€end,€at€least€in€this€forum.€Ð F– ÐBecause€the€Court€has€found€that€the€plaintiffs€have€failed€to€state€causes€of€action€in€the€TACÐ h Ðfor€which€relief€can€be€granted,€there€is€no€need€for€the€Court€to€address€defendantððs€request€forÐ ê: Ðsummary€judgment.€€The€Court€will€this€date€enter€an€order€in€conformity€with€thisÐ ¼  ÐMemorandum€and€Opinion.Ð ŽÞ ÐÌÌÌÓÓà  àà ` àà ¸ àà  àà h àà À àà  àòò€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€óóÐ Ö!&  Ðà  àà ` àà ¸ àà  àà h àà À àà  àALBERT€J.€MATRICCIANI,€JR.Ð ¿"! Ðà  àà ` àà ¸ àà  àà h àà À àà  àJudgeÐ ¨#ø" Ðà  àà ` àà ¸ àà  àà h àà À àà  àApril€15,€2008Ð ‘$á# ÐÌcc:à0  àAll€Counsel€(via€LexisNexis€E„Serve)