Old Trace Partners v. Sorensen CA6

I. FACTUAL AND PROCEDURAL BACKGROUND1

Respondents Old Trace Partners, L.P. (Old Trace), Daniel and Kimberly Nero (the Neros), Paul and Mary Ellen Klein (the Kleins), Alan Truscott (Truscott), and Fick Investment Group (Fick) (collectively referred to as Investors), filed a complaint against Developers related to the purchase and development of real property located at 40 Main

1 We carefully considered the record in this case and include only those facts that are relevant to the issues addressed in this appeal. Street in Los Altos, California. Investors alleged that Theodore and Gerald Sorenson (the Sorensons) prepared an investment prospectus/ project plan for the purpose of procuring investors, and in doing so, committed fraud by intentionally or negligently misrepresenting, concealing, and failing to disclose material facts. Investors further claimed that Gunn Management Group, Inc. (Gunn), the entity created by the Sorensons to manage the development project, breached its fiduciary duties by mismanaging the property and violating the operating agreement entered into by Developers and Investors to create 40 Main Street LLC (Main Street), a limited liability company designed to…