letter-bos-standstill-renewal-3-proposal.docx

1035-00005 · Marguerite Delp · Correspondence/External

letter-bos-standstill-renewal-3-proposal.docx DOCUMENT M&A / Corporate

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CALDERWOOD & HARKNESS LLP Attorneys at Law 350 South Grand Avenue, Suite 4800 Los Angeles, California 90071 Telephone: (213) 555-7200 Facsimile: (213) 555-7201

Email: hquinn@calderwoodharkness.com

October 10, 2024

Via Email and First Class Mail

Damian R. Ortega, Esq. Brennan, Ortega & Saldívar LLP 1900 Avenue of the Stars, Suite 2100 Los Angeles, California 90067

Re: In re Estate of Teodoro R. Fonseca, Deceased — Los Angeles County Superior Court, Case No. 22STPB09714; Proposed Third Amendment to Settlement Standstill Agreement Our Matter No.: 1035-00005

Dear Mr. Ortega:

We write on behalf of our client, Marguerite D. Fonseca, the surviving spouse of Teodoro R. Fonseca and petitioner in the above-referenced probate proceeding pending before the Los Angeles County Superior Court. The purpose of this letter is to propose a third renewal — which we refer to herein as the "Third Amendment" — of the Settlement Standstill Agreement originally executed on April 28, 2023 (the "Standstill Agreement"), by and between Ms. Fonseca, on the one hand, and the contestants — Rafael T. Fonseca, Isabela C. Fonseca-Greer, and Nicolás R. Fonseca (collectively, the "Contestants") — on the other. As you are aware, the current standstill period, as extended by the Second Amendment to the Settlement Standstill Agreement executed on April 28, 2024 (the "Second Amendment"), is set to expire on October 28, 2024. This letter proposes extending the standstill prior to that expiration date so that the parties may continue to pursue the possibility of a consensual resolution of this matter without the expense and burden of active litigation.

I. Background and History of the Standstill

By way of background, and for the sake of a complete record, we briefly recite the procedural history relevant to the Standstill Agreement and its prior renewals.

The Standstill Agreement was executed on April 28, 2023, following the parties' first mediation session, which took place on April 12, 2023, before the Honorable Constance Adler (Ret.) of the Westside Dispute Resolution Center. That mediation session, while productive in establishing a framework for further dialogue between the parties, did not result in a full resolution of the disputed issues in the probate proceeding. In light of the progress made during that session, however, the parties agreed to enter into the Standstill Agreement to facilitate continued informal settlement discussions outside the adversarial litigation process.

The Standstill Agreement, as you know, provides for the following material terms, among others:

(a) The tolling of all litigation deadlines in the probate proceeding, Case No. 22STPB09714, for the duration of the standstill period;

(b) A prohibition on the filing of any new motions, petitions, or discovery requests by either party during the standstill period, thereby preserving the status quo while allowing the parties to engage in informal settlement discussions;

(c) The continued neutral administration of the Estate of Teodoro R. Fonseca by Ashford Fiduciary Services Inc., with Gerald Whitmore serving as principal officer and designated neutral administrator, at a monthly administration fee of Eight Thousand Five Hundred Dollars ($8,500.00) per month, plus fifteen basis points (0.15%) of assets under administration per annum, such fees to be shared equally between the parties — Four Thousand Two Hundred Fifty Dollars ($4,250.00) per month borne by Ms. Fonseca and Four Thousand Two Hundred Fifty Dollars ($4,250.00) per month borne collectively by the Contestants;

(d) The right of either party to terminate the standstill upon thirty (30) days' prior written notice to the other party; and

(e) A requirement that any renewal of the standstill be accomplished by mutual written consent, with extensions to be agreed upon in six-month increments unless otherwise mutually agreed.

Since the execution of the original Standstill Agreement, the parties have entered into two prior amendments extending the standstill period:

First Amendment (Renewal #1): Executed on October 28, 2023, the First Amendment to the Settlement Standstill Agreement extended the standstill period from its original expiration date of October 28, 2023, through April 28, 2024, consistent with the standard six-month increment contemplated by the original Standstill Agreement.

Second Amendment (Renewal #2): Executed on April 28, 2024, the Second Amendment to the Settlement Standstill Agreement extended the standstill period from April 28, 2024, through October 28, 2024, again consistent with the six-month renewal cycle.

All substantive terms of the original Standstill Agreement have remained unchanged through both prior renewals. The equal cost-sharing arrangement, the neutral administration by Ashford Fiduciary Services Inc., the tolling provisions, the prohibition on litigation activity, and the confidentiality provisions governing settlement discussions have each continued in full force and effect without modification. The parties have honored these commitments throughout the standstill period, and the estate has been responsibly maintained and administered during this time.

II. Proposal for Third Amendment — Key Terms

We propose the following terms for the Third Amendment to the Settlement Standstill Agreement:

(a) Extension of the Standstill Period. The standstill period would be extended from its current expiration date of October 28, 2024, through and including February 28, 2025. This represents a period of approximately four months, which is shorter than the six-month increments utilized in the First Amendment and the Second Amendment. The rationale for proposing a shorter renewal period is discussed in Section III below.

(b) Continuation of Existing Terms. All other terms and conditions of the original Settlement Standstill Agreement, as previously amended by the First Amendment and the Second Amendment, would remain in full force and effect during the extended standstill period. Without limitation, this includes:

(i) the tolling of all litigation deadlines in the probate proceeding, Case No. 22STPB09714;

(ii) the prohibition on the filing of any new motions, petitions, or discovery requests by either party;

(iii) the continued neutral administration of the estate by Ashford Fiduciary Services Inc., under the direction of Gerald Whitmore as principal officer, under the existing fee arrangements described above;

(iv) the equal cost-sharing arrangement, with Ms. Fonseca bearing Four Thousand Two Hundred Fifty Dollars ($4,250.00) per month and the Contestants collectively bearing Four Thousand Two Hundred Fifty Dollars ($4,250.00) per month toward the neutral administrator's fees;

(v) all confidentiality provisions governing settlement discussions between and among the parties, their counsel, and any mediator or neutral to whom the matter may be referred;

(vi) the right of either party to terminate the standstill upon thirty (30) days' prior written notice to the other party; and

(vii) all other provisions of the original Standstill Agreement not inconsistent with the Third Amendment.

(c) No Modification to Confidentiality or Reactivation Rights. The Third Amendment would not modify the confidentiality provisions of the original Standstill Agreement or the parties' respective rights to reactivate the probate litigation upon the expiration or termination of the standstill period. Each party would retain the full right, upon expiration of the standstill or upon the effective date of any termination notice, to resume active prosecution or defense of all claims and issues in Case No. 22STPB09714 without prejudice.

III. Rationale for Continued Extension

Ms. Fonseca believes that a further extension of the standstill period is in the mutual interest of all parties, and she has instructed us to convey the following considerations in support of the proposed Third Amendment.

First, the parties have continued to engage in productive, if incremental, informal settlement discussions since the inception of the standstill period. While these discussions have not yet yielded a comprehensive resolution of all disputed issues, they have enabled the parties to develop a deeper understanding of each other's positions on key questions — including the characterization of certain estate assets, the scope and enforceability of the alleged premarital agreement, and the appropriate distribution of assets among the surviving spouse and the Contestants. Ms. Fonseca remains willing and committed to exploring a consensual resolution that accounts for the legitimate interests of all parties, and she believes that the groundwork laid during the past eighteen months of informal dialogue positions the parties well for continued progress.

Second, a continued standstill serves the mutual interest of all parties by avoiding the substantial costs associated with contested probate litigation over an estate of significant value. As you are aware, Ms. Fonseca values the estate at approximately Seventy-One Million One Hundred Twelve Thousand Dollars ($71,112,000.00), while the Contestants' alternative valuations place the estate at approximately Sixty-Eight Million Seven Hundred Fifty Thousand Dollars ($68,750,000.00). Regardless of which valuation is ultimately adopted, the estate is of a magnitude that contested litigation — with its attendant discovery costs, expert fees, deposition expenses, motion practice, and trial preparation — would impose a very substantial financial burden on all parties and would inevitably deplete estate assets to the detriment of each family member's ultimate recovery. The avoidance of those costs, even for an additional four months, represents a meaningful savings to both sides.

Third, the estate continues to be responsibly administered by Ashford Fiduciary Services Inc. under the direction of Gerald Whitmore. The neutral administration arrangement has served the interests of all parties well, preserving estate assets, maintaining the status quo, and ensuring that no party obtains an undue advantage during the standstill period. The continued engagement of Ashford Fiduciary Services Inc. provides assurance to Ms. Fonseca and, we trust, to the Contestants that the estate's assets will be competently managed and safeguarded while the parties pursue settlement.

Fourth, the reactivation of contested litigation at this juncture would require substantial expenditure on both sides. The discovery record, while partially developed, would need to be supplemented. Expert depositions on valuation, forensic accounting, and the enforceability of the alleged premarital agreement would need to be scheduled and completed. Trial preparation would need to commence in earnest. Ms. Fonseca estimates that the cost to her side alone of proceeding through a contested trial would be in excess of Two Million Dollars ($2,000,000.00), and we expect that the Contestants' costs would be comparable. These expenditures may be avoided — or at least deferred — if the parties can reach a negotiated resolution during the proposed extension period.

Fifth, and importantly, the shorter four-month extension period proposed in this letter — through February 28, 2025, rather than the customary six-month period through April 28, 2025 — is a deliberate and considered departure from the prior renewal cycle. Ms. Fonseca is mindful that this matter has been in a dormant posture for approximately eighteen months since the execution of the original Standstill Agreement. While she continues to believe that a negotiated resolution is attainable and preferable, she also recognizes that an indefinite continuation of the standstill without meaningful progress toward resolution may not serve the interests of either side. The proposed four-month extension is intended to provide a near-term checkpoint — a defined point at which both sides can candidly evaluate whether continued dormancy or the resumption of active litigation is the more appropriate course of action going forward. Ms. Fonseca proposes this shorter period in a spirit of good faith and with the expectation that both sides will use the intervening months to engage in focused and substantive settlement discussions.

IV. Logistics and Execution

In order to facilitate your review and the timely execution of the proposed Third Amendment, we have enclosed with this letter a draft of the Third Amendment to the Settlement Standstill Agreement. The enclosed draft tracks the format and structure of the First Amendment and the Second Amendment, with appropriate modifications to reflect the proposed February 28, 2025 expiration date and the other terms described above.

We respectfully request that you circulate the enclosed draft to your clients — Rafael T. Fonseca, Isabela C. Fonseca-Greer, and Nicolás R. Fonseca — and revert to us with any comments, questions, or proposed revisions by no later than October 18, 2024. This timeline is intended to allow sufficient time for the exchange of any comments, negotiation of any revisions, and execution of the Third Amendment by all parties in advance of the current expiration date of October 28, 2024. We believe that an eight-day review period is reasonable and should provide adequate time for your clients to consider the proposal, but we are of course willing to discuss a brief extension of this deadline if circumstances warrant, provided that execution can still be accomplished before October 28, 2024.

Additionally, I would like to offer to arrange a call between myself and you at a mutually convenient time to discuss any concerns you or your clients may have regarding the proposed terms of the Third Amendment, or the broader trajectory of this matter as it relates to the potential for a negotiated resolution. We believe that an open dialogue between counsel will be useful in assessing the viability of continued settlement efforts and in identifying any specific issues or proposals that either side may wish to place on the table during the proposed extension period. Please feel free to suggest dates and times that work for your schedule, and we will do our best to accommodate.

Finally, we wish to note that in the event the parties are unable to agree on the terms of a renewal, the current standstill will expire by its terms on October 28, 2024. In that event, Ms. Fonseca reserves all of her rights to proceed with the probate litigation in Case No. 22STPB09714, including but not limited to: seeking appointment as administrator of the estate; pressing her community property claims with respect to the assets of the estate; challenging the validity and enforceability of the alleged premarital agreement dated May 30, 2008; and pursuing any and all other claims, petitions, or relief to which she may be entitled under applicable law. We raise this point not to inject an adversarial tone into what has been, to date, a collegial and constructive dialogue, but rather to ensure that the record is clear as to Ms. Fonseca's rights in the event that a renewal cannot be agreed upon.

V. Reservation of Rights

Ms. Fonseca expressly reserves all of her rights, claims, remedies, and defenses in the probate proceeding, In re Estate of Teodoro R. Fonseca, Deceased, Los Angeles County Superior Court, Case No. 22STPB09714. Nothing in this letter, the enclosed draft Third Amendment to the Settlement Standstill Agreement, or any prior or future communications between the parties or their counsel in connection with the standstill or settlement discussions shall constitute, or be deemed to constitute, a waiver, admission, or concession by Ms. Fonseca on any issue in the probate proceeding, including but not limited to: the characterization of estate assets as community property or separate property; the invalidity, unenforceability, or unconscionability of the alleged premarital agreement dated May 30, 2008, between Teodoro R. Fonseca and Marguerite D. Fonseca; Ms. Fonseca's entitlement to appointment as administrator of the estate; Ms. Fonseca's rights as surviving spouse under the California Probate Code; the appropriate valuation of any estate asset; or any other matter in dispute in the probate proceeding. All such rights are fully preserved and may be asserted at any time upon the expiration or termination of the standstill period, without prejudice and without limitation.

We appreciate the continued collegial dialogue between our respective firms and between the parties, and we remain hopeful that this matter can be resolved through negotiation rather than contested litigation. The Fonseca family has endured a difficult period following the loss of Teodoro, and Ms. Fonseca believes that a negotiated resolution — one that treats all family members with dignity and fairness — is greatly preferable to the adversarial process. We look forward to receiving your response at your earliest convenience, and we remain available to discuss any aspect of this proposal at a time that is convenient for you.

Sincerely,

CALDERWOOD & HARKNESS LLP

By: ________

Howard Quinn Partner

350 South Grand Avenue, Suite 4800 Los Angeles, California 90071 Telephone: (213) 555-7200

Email: hquinn@calderwoodharkness.com

Enclosure: Draft Third Amendment to Settlement Standstill Agreement

cc: Marguerite D. Fonseca (via email)

Patricia Dunmore, Calderwood & Harkness LLP (via email) Elliot Nguyen, Calderwood & Harkness LLP (via email) Lydia Kwan, Brennan, Ortega & Saldívar LLP (via email)

CALDERWOOD & HARKNESS LLP Attorneys at Law 350 South Grand Avenue, Suite 4800 Los Angeles, California 90071 Telephone: (213) 555-7200 Facsimile: (213) 555-7201
Email: hquinn@calderwoodharkness.com
October 10, 2024
Via Email and First Class Mail
Damian R. Ortega, Esq. Brennan, Ortega & Saldívar LLP 1900 Avenue of the Stars, Suite 2100 Los Angeles, California 90067
Re: In re Estate of Teodoro R. Fonseca, Deceased — Los Angeles County Superior Court, Case No. 22STPB09714; Proposed Third Amendment to Settlement Standstill Agreement Our Matter No.: 1035-00005
Dear Mr. Ortega:
We write on behalf of our client, Marguerite D. Fonseca, the surviving spouse of Teodoro R. Fonseca and petitioner in the above-referenced probate proceeding pending before the Los Angeles County Superior Court. The purpose of this letter is to propose a third renewal — which we refer to herein as the "Third Amendment" — of the Settlement Standstill Agreement originally executed on April 28, 2023 (the "Standstill Agreement"), by and between Ms. Fonseca, on the one hand, and the contestants — Rafael T. Fonseca, Isabela C. Fonseca-Greer, and Nicolás R. Fonseca (collectively, the "Contestants") — on the other. As you are aware, the current standstill period, as extended by the Second Amendment to the Settlement Standstill Agreement executed on April 28, 2024 (the "Second Amendment"), is set to expire on October 28, 2024. This letter proposes extending the standstill prior to that expiration date so that the parties may continue to pursue the possibility of a consensual resolution of this matter without the expense and burden of active litigation.
I. Background and History of the Standstill
By way of background, and for the sake of a complete record, we briefly recite the procedural history relevant to the Standstill Agreement and its prior renewals.
The Standstill Agreement was executed on April 28, 2023, following the parties' first mediation session, which took place on April 12, 2023, before the Honorable Constance Adler (Ret.) of the Westside Dispute Resolution Center. That mediation session, while productive in establishing a framework for further dialogue between the parties, did not result in a full resolution of the disputed issues in the probate proceeding. In light of the progress made during that session, however, the parties agreed to enter into the Standstill Agreement to facilitate continued informal settlement discussions outside the adversarial litigation process.
The Standstill Agreement, as you know, provides for the following material terms, among others:
(a) The tolling of all litigation deadlines in the probate proceeding, Case No. 22STPB09714, for the duration of the standstill period;
(b) A prohibition on the filing of any new motions, petitions, or discovery requests by either party during the standstill period, thereby preserving the status quo while allowing the parties to engage in informal settlement discussions;
(c) The continued neutral administration of the Estate of Teodoro R. Fonseca by Ashford Fiduciary Services Inc., with Gerald Whitmore serving as principal officer and designated neutral administrator, at a monthly administration fee of Eight Thousand Five Hundred Dollars ($8,500.00) per month, plus fifteen basis points (0.15%) of assets under administration per annum, such fees to be shared equally between the parties — Four Thousand Two Hundred Fifty Dollars ($4,250.00) per month borne by Ms. Fonseca and Four Thousand Two Hundred Fifty Dollars ($4,250.00) per month borne collectively by the Contestants;
(d) The right of either party to terminate the standstill upon thirty (30) days' prior written notice to the other party; and
(e) A requirement that any renewal of the standstill be accomplished by mutual written consent, with extensions to be agreed upon in six-month increments unless otherwise mutually agreed.
Since the execution of the original Standstill Agreement, the parties have entered into two prior amendments extending the standstill period:
First Amendment (Renewal #1): Executed on October 28, 2023, the First Amendment to the Settlement Standstill Agreement extended the standstill period from its original expiration date of October 28, 2023, through April 28, 2024, consistent with the standard six-month increment contemplated by the original Standstill Agreement.
Second Amendment (Renewal #2): Executed on April 28, 2024, the Second Amendment to the Settlement Standstill Agreement extended the standstill period from April 28, 2024, through October 28, 2024, again consistent with the six-month renewal cycle.
All substantive terms of the original Standstill Agreement have remained unchanged through both prior renewals. The equal cost-sharing arrangement, the neutral administration by Ashford Fiduciary Services Inc., the tolling provisions, the prohibition on litigation activity, and the confidentiality provisions governing settlement discussions have each continued in full force and effect without modification. The parties have honored these commitments throughout the standstill period, and the estate has been responsibly maintained and administered during this time.
II. Proposal for Third Amendment — Key Terms
We propose the following terms for the Third Amendment to the Settlement Standstill Agreement:
(a) Extension of the Standstill Period. The standstill period would be extended from its current expiration date of October 28, 2024, through and including February 28, 2025. This represents a period of approximately four months, which is shorter than the six-month increments utilized in the First Amendment and the Second Amendment. The rationale for proposing a shorter renewal period is discussed in Section III below.
(b) Continuation of Existing Terms. All other terms and conditions of the original Settlement Standstill Agreement, as previously amended by the First Amendment and the Second Amendment, would remain in full force and effect during the extended standstill period. Without limitation, this includes:
(i) the tolling of all litigation deadlines in the probate proceeding, Case No. 22STPB09714;
(ii) the prohibition on the filing of any new motions, petitions, or discovery requests by either party;
(iii) the continued neutral administration of the estate by Ashford Fiduciary Services Inc., under the direction of Gerald Whitmore as principal officer, under the existing fee arrangements described above;
(iv) the equal cost-sharing arrangement, with Ms. Fonseca bearing Four Thousand Two Hundred Fifty Dollars ($4,250.00) per month and the Contestants collectively bearing Four Thousand Two Hundred Fifty Dollars ($4,250.00) per month toward the neutral administrator's fees;
(v) all confidentiality provisions governing settlement discussions between and among the parties, their counsel, and any mediator or neutral to whom the matter may be referred;
(vi) the right of either party to terminate the standstill upon thirty (30) days' prior written notice to the other party; and
(vii) all other provisions of the original Standstill Agreement not inconsistent with the Third Amendment.
(c) No Modification to Confidentiality or Reactivation Rights. The Third Amendment would not modify the confidentiality provisions of the original Standstill Agreement or the parties' respective rights to reactivate the probate litigation upon the expiration or termination of the standstill period. Each party would retain the full right, upon expiration of the standstill or upon the effective date of any termination notice, to resume active prosecution or defense of all claims and issues in Case No. 22STPB09714 without prejudice.
III. Rationale for Continued Extension
Ms. Fonseca believes that a further extension of the standstill period is in the mutual interest of all parties, and she has instructed us to convey the following considerations in support of the proposed Third Amendment.
First, the parties have continued to engage in productive, if incremental, informal settlement discussions since the inception of the standstill period. While these discussions have not yet yielded a comprehensive resolution of all disputed issues, they have enabled the parties to develop a deeper understanding of each other's positions on key questions — including the characterization of certain estate assets, the scope and enforceability of the alleged premarital agreement, and the appropriate distribution of assets among the surviving spouse and the Contestants. Ms. Fonseca remains willing and committed to exploring a consensual resolution that accounts for the legitimate interests of all parties, and she believes that the groundwork laid during the past eighteen months of informal dialogue positions the parties well for continued progress.
Second, a continued standstill serves the mutual interest of all parties by avoiding the substantial costs associated with contested probate litigation over an estate of significant value. As you are aware, Ms. Fonseca values the estate at approximately Seventy-One Million One Hundred Twelve Thousand Dollars ($71,112,000.00), while the Contestants' alternative valuations place the estate at approximately Sixty-Eight Million Seven Hundred Fifty Thousand Dollars ($68,750,000.00). Regardless of which valuation is ultimately adopted, the estate is of a magnitude that contested litigation — with its attendant discovery costs, expert fees, deposition expenses, motion practice, and trial preparation — would impose a very substantial financial burden on all parties and would inevitably deplete estate assets to the detriment of each family member's ultimate recovery. The avoidance of those costs, even for an additional four months, represents a meaningful savings to both sides.
Third, the estate continues to be responsibly administered by Ashford Fiduciary Services Inc. under the direction of Gerald Whitmore. The neutral administration arrangement has served the interests of all parties well, preserving estate assets, maintaining the status quo, and ensuring that no party obtains an undue advantage during the standstill period. The continued engagement of Ashford Fiduciary Services Inc. provides assurance to Ms. Fonseca and, we trust, to the Contestants that the estate's assets will be competently managed and safeguarded while the parties pursue settlement.
Fourth, the reactivation of contested litigation at this juncture would require substantial expenditure on both sides. The discovery record, while partially developed, would need to be supplemented. Expert depositions on valuation, forensic accounting, and the enforceability of the alleged premarital agreement would need to be scheduled and completed. Trial preparation would need to commence in earnest. Ms. Fonseca estimates that the cost to her side alone of proceeding through a contested trial would be in excess of Two Million Dollars ($2,000,000.00), and we expect that the Contestants' costs would be comparable. These expenditures may be avoided — or at least deferred — if the parties can reach a negotiated resolution during the proposed extension period.
Fifth, and importantly, the shorter four-month extension period proposed in this letter — through February 28, 2025, rather than the customary six-month period through April 28, 2025 — is a deliberate and considered departure from the prior renewal cycle. Ms. Fonseca is mindful that this matter has been in a dormant posture for approximately eighteen months since the execution of the original Standstill Agreement. While she continues to believe that a negotiated resolution is attainable and preferable, she also recognizes that an indefinite continuation of the standstill without meaningful progress toward resolution may not serve the interests of either side. The proposed four-month extension is intended to provide a near-term checkpoint — a defined point at which both sides can candidly evaluate whether continued dormancy or the resumption of active litigation is the more appropriate course of action going forward. Ms. Fonseca proposes this shorter period in a spirit of good faith and with the expectation that both sides will use the intervening months to engage in focused and substantive settlement discussions.
IV. Logistics and Execution
In order to facilitate your review and the timely execution of the proposed Third Amendment, we have enclosed with this letter a draft of the Third Amendment to the Settlement Standstill Agreement. The enclosed draft tracks the format and structure of the First Amendment and the Second Amendment, with appropriate modifications to reflect the proposed February 28, 2025 expiration date and the other terms described above.
We respectfully request that you circulate the enclosed draft to your clients — Rafael T. Fonseca, Isabela C. Fonseca-Greer, and Nicolás R. Fonseca — and revert to us with any comments, questions, or proposed revisions by no later than October 18, 2024. This timeline is intended to allow sufficient time for the exchange of any comments, negotiation of any revisions, and execution of the Third Amendment by all parties in advance of the current expiration date of October 28, 2024. We believe that an eight-day review period is reasonable and should provide adequate time for your clients to consider the proposal, but we are of course willing to discuss a brief extension of this deadline if circumstances warrant, provided that execution can still be accomplished before October 28, 2024.
Additionally, I would like to offer to arrange a call between myself and you at a mutually convenient time to discuss any concerns you or your clients may have regarding the proposed terms of the Third Amendment, or the broader trajectory of this matter as it relates to the potential for a negotiated resolution. We believe that an open dialogue between counsel will be useful in assessing the viability of continued settlement efforts and in identifying any specific issues or proposals that either side may wish to place on the table during the proposed extension period. Please feel free to suggest dates and times that work for your schedule, and we will do our best to accommodate.
Finally, we wish to note that in the event the parties are unable to agree on the terms of a renewal, the current standstill will expire by its terms on October 28, 2024. In that event, Ms. Fonseca reserves all of her rights to proceed with the probate litigation in Case No. 22STPB09714, including but not limited to: seeking appointment as administrator of the estate; pressing her community property claims with respect to the assets of the estate; challenging the validity and enforceability of the alleged premarital agreement dated May 30, 2008; and pursuing any and all other claims, petitions, or relief to which she may be entitled under applicable law. We raise this point not to inject an adversarial tone into what has been, to date, a collegial and constructive dialogue, but rather to ensure that the record is clear as to Ms. Fonseca's rights in the event that a renewal cannot be agreed upon.
V. Reservation of Rights
Ms. Fonseca expressly reserves all of her rights, claims, remedies, and defenses in the probate proceeding, In re Estate of Teodoro R. Fonseca, Deceased, Los Angeles County Superior Court, Case No. 22STPB09714. Nothing in this letter, the enclosed draft Third Amendment to the Settlement Standstill Agreement, or any prior or future communications between the parties or their counsel in connection with the standstill or settlement discussions shall constitute, or be deemed to constitute, a waiver, admission, or concession by Ms. Fonseca on any issue in the probate proceeding, including but not limited to: the characterization of estate assets as community property or separate property; the invalidity, unenforceability, or unconscionability of the alleged premarital agreement dated May 30, 2008, between Teodoro R. Fonseca and Marguerite D. Fonseca; Ms. Fonseca's entitlement to appointment as administrator of the estate; Ms. Fonseca's rights as surviving spouse under the California Probate Code; the appropriate valuation of any estate asset; or any other matter in dispute in the probate proceeding. All such rights are fully preserved and may be asserted at any time upon the expiration or termination of the standstill period, without prejudice and without limitation.
We appreciate the continued collegial dialogue between our respective firms and between the parties, and we remain hopeful that this matter can be resolved through negotiation rather than contested litigation. The Fonseca family has endured a difficult period following the loss of Teodoro, and Ms. Fonseca believes that a negotiated resolution — one that treats all family members with dignity and fairness — is greatly preferable to the adversarial process. We look forward to receiving your response at your earliest convenience, and we remain available to discuss any aspect of this proposal at a time that is convenient for you.
Sincerely,
CALDERWOOD & HARKNESS LLP
By: ________
Howard Quinn Partner
350 South Grand Avenue, Suite 4800 Los Angeles, California 90071 Telephone: (213) 555-7200
Email: hquinn@calderwoodharkness.com
Enclosure: Draft Third Amendment to Settlement Standstill Agreement
cc: Marguerite D. Fonseca (via email)
Patricia Dunmore, Calderwood & Harkness LLP (via email) Elliot Nguyen, Calderwood & Harkness LLP (via email) Lydia Kwan, Brennan, Ortega & Saldívar LLP (via email)

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