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to retain its interest in the company. Shannon did in fact
exercise its option to purchase the Shorecliffs stock owned by
Mr. Fitzsimon. Sea-Aire, on the other hand, retained its
interest in Shorecliffs.
On June 28, 1989, Mr. Spence and Mr. Johnston met with
attorney Thomas J. O’Keefe to discuss matters relating to the
pending sale of the Shorecliffs golf course. After certain
extensions and modifications of the terms contemplated by the
December 23, 1988, option agreement, a sale of the golf course
ultimately closed on June 30, 1989. The buyers were L.H.C.
Investments, Fon N. Leong, and Ruth Li Shu Leong. The total
purchase price of between $5 and $6 million was paid in part by a
$3 million promissory note secured by deed of trust.
State Court Litigation
The foregoing transactions eventually resulted in two suits
filed by Mr. Fitzsimon in the Superior Court of the State of
California, County of Orange. The first, Fitzsimon v. S.C.
Equestrian Lots, Ltd., No. 704870 (Cal. Super. Ct. June 9, 1995),
was brought in February of 1993 against, among others, SCE, Mr.
Johnston, Sea-Aire, Uppaway, Eric Johnston, Mr. Spence, Shannon,
and Shorecliffs. The complaint set forth 15 causes of action
based on grounds such as fraud, intentional misrepresentation,
breach of contract, breach of fiduciary duty, negligence, and
conversion. As most relevant for purposes of the motions now at
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