Scharf Investments v. Scharf CA6

I. BACKGROUND

A. The Arbitration Award

Krawez and the LLC sought arbitration of their claims against the Scharfs for breach of the LLC’s operating agreement and the Membership Interest Purchase Agreement (MIPA) by which Krawez acquired the Scharfs’ interest in the LLC. Krawez and the LLC also pursued related tort and unfair competition claims, and the Scharfs counterclaimed. On November 10, 2021, a three-arbitrator panel found in favor of Krawez and the LLC, issuing and serving a final award of $61,450,000 in compensatory damages and $5 million in punitive damages, as well as attorney fees and prejudgment interest. The panel also ordered injunctive relief, enjoining Scharf from “(1) misrepresenting his role at [the LLC], e.g., claiming credit for the successes during the same period he was absent from a meaningful role at [the LLC]; (2) further violating the terms of the 2016 MIPA; [and] (3) . . . making false disparaging statements regarding [the LLC].” B. The Petition to Correct and the Scharfs’ First Appeal

On February 17, 2022—one day before section 1288’s 100-day deadline to file and serve a petition to vacate or correct the award—the Scharfs filed a petition to…