FCRC attorney Harold Weinberger noted that Skanska Modular had argued in court that FCRC Modular could reopen the factory immediately by presenting an opportunity to FCS Modular board--three directors from each partner--and if the board said no, the presenting member could go alone, licensing and using the company’s intellectual property and resources, including the factory.
Scarpulla last month did order a board meeting, which would trigger a “Buy-Sell” procedure so that one member could buy out the other. As expected the board deadlocked.
New opportunity must be equivalent?
FCRC Modular, according to Weinberger's letter, then informed the board of the new opportunity. Skanska Modular refused to consider it, according to FCRC Modular, "unjustifiably" claiming the financial aspects of the proposal had to be identical to the previous one. Skanska also said the parties had to agree with a license agreement regarding intellectual property and the factory.
After a phone conference, Skanska Modular’s counsel said the proposal only needed to be “functionally equivalent.”
But B2 Owner would have the right to claim cost overruns against Skanska USA "as damages arising from the termination of their prior contract"--surely a major sticking point.
Mediation not enough
Skanska Modular, which FCRC Modular said "failed to respond to FCRC Modular’s letter for a week" (six days, to be precise), said it disagreed, because the proposal was "materially different," and said the issue should be addressed at the first scheduled mediation session between Skanska and Forest City, which also concerns the dueling lawsuits filed over cost overruns and breach of contract.