Press Release
Press Release
Press Contacts: Erik Cummins, Matt Hyams, Taina Rosa, Olivia Thomas
03.18.25
On March 10, California’s Second District Court of Appeal affirmed a state trial court judgment rejecting a $65 million claim against Pillsbury’s client Apro. The appellate result clears the way for recovery on $3.3 million in attorneys’ fees awarded by the trial court, plus additional fees and costs on appeal. Pillsbury’s LA-based litigation partner Robert Wallan led the trial effort and argued the appeal. The case was GSE Properties, LLC, et al. v. APRO, LLC. B338491
The underlying dispute arose from a nearly $1 billion M&A transaction involving the purchase of a 97-unit convenience store chain. As part of the transaction, the seller (GSE, owned by David Delrahim) leased each real estate parcel to the buyer (Apro) on a long-term “double-net” basis. The seller had asked for a double net lease form where it would pay real estate taxes and then be eligible to potentially take a deduction under IRC 199A.
After the transaction was signed, but before closing, Delrahim argued that there was a drafting error, such that the deal was only supposed to look like a double net lease so he could take a 199A tax deduction, but that he had intended for the buyer to reimburse or pay the roughly $65 million in real estate taxes that would be due over the lease terms.
By agreement, a retired judge served as referee in the dispute. Weeks before trial, the referee granted summary judgment to Apro and awarded legal fees. The seller appealed the judgment. In a lengthy decision, the Court of Appeal affirmed the judgment and rejected the opposing party’s theories. Appellate costs were awarded to Apro.
The Pillsbury trial and appellate team for Apro included Wallan, Mariah Brandt, Lisseth Ochoa-Chavarria, Pauleen Truong, and Pillsbury’s appellate specialists Anne Voigts and Kevin Fong.