Motion to Expel Respondent
SUPERIOR COURT, STATE OF CALIFORNIA COUNTY OF SANTA CLARA Department 12 Honorable Nahal Iravani-Sani, Presiding Courtroom Clerk, Ryan Nguyen 191 North First Street, San Jose, CA 95113 Telephone: (408) 882-2230
DATE: 6/26/2026 TIME: 9:00 A.M. and 9:01 A.M.
LINE 8 26CV483689 Silicon Valley Demurrer Taxpayers Association, Inc. Et al vs County of Santa Clara Please Ctrl Click (or scroll down to) Line 8 LINE 9 26CV485647 Orchard Yield Funds, Motion to Expel Respondent LLC vs Park Capital Management, LLC Please Ctrl Click (or scroll down to) Line 9 -
Calendar line 9 Case Name: Orchard Yield Funds, LLC vs. Park Capital Management, LLC Case No.: 26CV485647
Applicant Orchard Yield Funds, LLC's Application to Expel Respondent Park Capital Management, LLC pursuant to Corporations Code section 17706.02(e).
Requests for Judicial Notice
The Requests for Judicial Notice are GRANTED pursuant to Evidence Code section 452, subdivision (d), as to the existence, filing, and contents of the submitted court records and related filings. The Court does not take judicial notice of the truth of disputed factual assertions contained within those records. (Kilroy v. State of California (2004) 119 Cal.App.4th 140, 145; Joslin v. H.A.S. Ins. Brokerage (1986) 184 Cal.App.3d 369, 374.)
Discussion
Corporations Code section 17706.02(e) authorizes judicial expulsion of a member upon application by the limited liability company where the member has engaged in wrongful conduct materially affecting the company's activities, has willfully or persistently committed a material breach of duties owed to the company, or has engaged in conduct relating to the company's activities that makes it not reasonably practicable to carry on those activities with the person as a member.
The record reflects that Orchard Yield Funds, LLC ("OYFLLC") is owned and managed equally by Satya Chillara and Respondent Park Capital Management, LLC ("PCM"). OYFLLC serves as the general partner of Orchard Yield Fund I, LP, whose principal remaining activity concerns claims arising from its investment in Double L Ranches, LLC ("DLR").
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Applicant has submitted evidence that PCM, through its managing member Adam McAfee, possessed financial interests in DLR and affiliated entities that were not fully disclosed to investors and that PCM thereafter opposed litigation against DLR and affiliated parties after initially supporting such litigation. Applicant further presents evidence that PCM continues to advocate positions adverse to the prosecution of claims that Applicant contends constitute the LLC's principal remaining business activity.
The Court need not resolve in this proceeding the ultimate merits of the underlying fraud allegations pending elsewhere. Nor does the Court make findings that all allegations of fraud, concealment, or self-dealing asserted by Applicant have been proven. Those issues remain the subject of separate litigation.
The present inquiry is whether the statutory grounds for judicial expulsion have been established.
The evidence demonstrates an ongoing and irreconcilable conflict between the LLC's two equal managers concerning the conduct of the company's affairs. The parties have engaged in competing efforts to remove one another from management. Significant company actions
require joint participation, yet the managers fundamentally disagree regarding the prosecution of litigation that appears to constitute the company's primary remaining activity. The record further reflects disputes concerning authority to act on behalf of the company, the handling of company funds, and the management of litigation assets.
This showing exceeds mere interpersonal hostility or disagreement over business judgment. The evidence establishes a continuing conflict in which PCM's interests are materially adverse to positions being advanced on behalf of the entities it manages and demonstrates a resulting management deadlock that has impaired the company's ability to function.
The Court therefore finds that PCM has engaged in conduct relating to the company's activities that makes it not reasonably practicable to carry on those activities with PCM as a member within the meaning of Corporations Code section 17706.02(e). The Court further finds that Applicant has demonstrated a continuing conflict of interest sufficient to constitute a persistent breach of duties owed in connection with the management of the company's affairs.
Accordingly, the Application is GRANTED.
Park Capital Management, LLC is expelled as a member of Orchard Yield Funds, LLC pursuant to Corporations Code section 17706.02(e).
Applicant to prepare the final proposed order, accompanied by the necessary Form EFS-020, within 7 days of the hearing.
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