1 Thomas B. Mayhew (State Bar No. 183539) Carly O. Alameda (State Bar No. 244424) 2 Alex Reese (State Bar No. 280530) Farella Braun + Martel LLP 3 235 Montgomery Street, 17th Floor San Francisco, California 94104 4 Telephone: (415) 954-4400 Facsimile: (415) 954-4480 5 Attorneys for Plaintiff/Petitioner 6 BENJAMIN NAGEL 7 8 9 SUPERIOR COURT OF THE STATE OF CALIFORNIA 10 COUNTY OF ALAMEDA 11 12 BENJAMIN “BENNO” NAGEL, Case No. ____________ 13 Plaintiff and Petitioner VERIFIED COMPLAINT FOR 14 DETERMINATION OF BOARD vs. MEMBERS, AND RELATED 15 DECLARATORY RELIEF; PETITION STEVEN ALDRICH, BARNEY FOR WRIT OF MANDATE 16 SCHAUBLE, EDREECE ARGHANDIWAL, AND DOES 1-10, 17 TRIAL PREFERENCE REQUESTED CORPORATIONS CODE § 709 18 Defendants and Respondents, CODE CIVIL PROCEDURE § 1062.3 and 19 OAKLAND PRO SOCCER LLC, dba THE 20 OAKLAND ROOTS, and MICHAEL 21 GEDDES, 22 Nominal Defendants and Respondents. 23 24 25 26 27 28 Farella Braun + Martel LLP 235 Montgomery Street, 17th Floor San Francisco, California 94104 39520\13857975.4 (415) 954-4400 VERIFIED COMPLAINT AND PETITION 1 Plaintiff Benjamin “Benno” Nagel (“Plaintiff” or “Nagel”) for his complaint and petition 2 for writ of mandate against Defendants/Respondents Steven Aldrich, Barney Schauble, and 3 Edreece Arghandiwal (collectively, with DOES 1-10, “Defendants”) and Oakland Pro Soccer 4 LLC, dba the Oakland Roots (“Oakland Roots”) and Michael Geddes as Nominal 5 Defendants/Respondents, alleges as follows. 6 NATURE OF THE ACTION 7 1. Nagel, with his friend Arghandiwal, co-founded a new professional soccer team in 8 Oakland: Oakland Pro Soccer LLC, dba the Oakland Roots (“Oakland Roots”). Nagel was the 9 primary founder and president, working full-time on the vision for the last four years; 10 Arghandiwal helped when he could, and eventually quit his day job in 2019 to become full-time 11 Chief Marketing Officer. 12 2. The Oakland Roots was founded to be more than just a professional soccer club. 13 Nagel sought to create an organization that was authentically Oakland, community-based, and 14 harnesses the power of sport as a force for social good. 15 3. Launching a professional soccer team takes money, and Nagel and Arghandiwal 16 eventually connected with two early major investors: Steven Aldrich and Barney Schauble. With 17 Aldrich and Schauble’s money, and Nagel and Arghandiwal’s heart and hustle, the team has 18 moved up in the world. After starting in the National Independent Soccer Association (“NISA”), 19 it played to sell-out crowds and, based on its success and recognition both on the field and with the 20 fans, was admitted in mid-2020 to the United Soccer League Championship, the second division 21 of U.S. Soccer (comparable to AAA in Major League Baseball). 22 4. The current, operative Second Amended and Restated Operating Agreement 23 (“Operating Agreement”) of the LLC provides for a specified division of control: Nagel as the 24 majority owner within the “Class F” Founders Class would control two board seats, with Nagel 25 and Arghandiwal as the initial appointees, and Aldrich and Schauble as the initial major funders 26 would control two board seats, with themselves as the initial appointees. Funders and founders 27 would share control equally, and agree on a common vision for the organization. 28 5. On October 23, 2020, Aldrich and Schauble violated the non-waivable covenant of Farella Braun + Martel LLP 235 Montgomery Street, 17th Floor 39520\13857975.4 San Francisco, California 94104 1 (415) 954-4400 VERIFIED COMPLAINT AND PETITION 1 good faith and fair dealing and fiduciary duties required of all board members in an LLC. They 2 came to the board with a secret plan, pre-coordinated with Arghandiwal, to remove Nagel from the 3 board and from his position as president. Specifically, they had a secret agenda to grant 4 Arghandiwal additional equity interests, effective immediately, so that Arghandiwal could become 5 the majority interest holder among the Class F founders; Arghandiwal would then use his newly 6 granted interests to remove Nagel from the board. 7 6. Under the Operating Agreement as drafted, this was impossible without Nagel’s 8 agreement: Nagel had the ability to appoint whoever he wanted to the two board seats he 9 controlled, and so had he known about Aldrich, Schauble, and Arghandiwal’s plan beforehand, he 10 could have effectively blocked it by removing Arghandiwal and replacing him with a different 11 Manager. By hiding their plan and ambushing him at the meeting – by violating their duty to deal 12 with him in an honest and straightforward manner, as required by the covenant of good faith and 13 fair dealing and their non-waivable fiduciary duties – the three denied Nagel of the protection that 14 the Operating Agreement gave him as the company’s principal founder. Defendants’ actions also 15 violated a number of other provisions of the Oakland Roots operating agreement. 16 7. This lawsuit is for a declaration that Nagel retains the right to appoint two members 17 of the board, and to reverse the actions taken in violation of law and contract on October 23, 2020. 18 8. Section 709 of the California Corporations Code (“Section 709”) provides as 19 follows: 20 (a) Upon the filing of an action therefor by any shareholder or by any person who claims to have been denied the right to vote, the superior court of the proper county shall try 21 and determine the validity of any election or appointment of any director of any domestic corporation, or of any foreign corporation if the election was held or the 22 appointment was made in this state. In the case of a foreign corporation the action 23 may be brought at the option of the plaintiff in the county in which the corporation has its principal office in this state or in the county in which the election was held or the 24 appointment was made. 25 (b) Upon the filing of the complaint, and before any further proceedings are had, the court 26 shall enter an order fixing a date for the hearing, which shall be within five days unless for good cause shown a later date is fixed, and requiring notice of the date for the 27 hearing and a copy of the complaint to be served upon the corporation and upon the person whose purported election or appointment is questioned and upon any person 28 (other than the plaintiff) whom the plaintiff alleges to have been elected or appointed, Farella Braun + Martel LLP 235 Montgomery Street, 17th Floor 39520\13857975.4 San Francisco, California 94104 2 (415) 954-4400 VERIFIED COMPLAINT AND PETITION 1 in the manner in which a summons is required to be served, or, if the court so directs, by registered mail; and the court may make such further requirements as to notice as 2 appear to be proper under the circumstances. 3 (c) The court may determine the person entitled to the office of director or may order a 4 new election to be held or appointment to be made, may determine the validity, effectiveness and construction of voting agreements and voting trusts, the validity of 5 the issuance of shares and the right of persons to vote and may direct such other relief as may be just and proper. 6 7 9. Pursuant to Section 709, Code of Civil Procedure section 1060 and 1062.3, and 8 1085-1094, and this Court’s declaratory relief and equitable power over companies doing business 9 in and formed under the laws of this State, Nagel seeks that this Court set this case for hearing on 10 the earliest possible date and order the following: 11 (1) Declare that Benjamin Nagel and John Nagel are the only validly appointed “Class F 12 Managers” of Oakland Roots; 13 (2) Declare that putative manager Edreece Arghandiwal and his putative appointee 14 Michael Geddes, who defendants claim are managers as a result of defendants’ actions on October 15 23, 2020, are not validly appointed as managers; and 16 (3) Declare the actions of the board of managers on October 23, 2020 invalid, as well as 17 any subsequent actions of the board during the period where Benjamin Nagel has been wrongfully 18 excluded from the decision-making process as a manager. 19 THE PARTIES 20 10. Plaintiff Benjamin Nagel is an individual residing in Oakland, California. He is the 21 primary co-founder of Oakland Pro Soccer LLC, dba the Oakland Roots. He is a member and 22 Class F Manager. He served as President of the organization until October 23, 2020, when 23 defendants Aldrich and Schauble voted to remove him as President and then purported to 24 terminate his employment a little over a week later. 25 11. Defendant Oakland Pro Soccer LLC, dba The Oakland Roots is a professional 26 soccer club based in Oakland, California. Its principal place of business is in Oakland, California. 27 It is a limited liability company formed and operating under California law. 28 12. Defendant Steven Aldrich is an individual residing in Los Altos, in Santa Clara Farella Braun + Martel LLP 235 Montgomery Street, 17th Floor 39520\13857975.4 San Francisco, California 94104 3 (415) 954-4400 VERIFIED COMPLAINT AND PETITION 1 County, California. He is the Chair of the Oakland Roots, an investor in the club, and a member- 2 manager holding Class A interests. 3 13. Defendant Barney Schauble is an individual residing in Larkspur, in Marin County, 4 California. He is an investor in the Oakland Roots and a member-manager holding Class A 5 interests.