Legal Document: Jordan Bardach v. Anna Martynova, Jennifer Milosavljevic, Yoel Hershkowitch, Aron Wolocowitz, Rentability, Inc. (Nominal Respondent)

On September 18, 2023 a MEMORANDUM - Post-Trial Brief was filed involving a dispute between Jordan Bardach, and Anna Martynova, Aron Wolocowitz, Jennifer Milosavljevic, Rentability, Inc., Yoel Hershkowitch, for Commercial - Other - Commercial Division (N-PCL 618) in the District Court of New York County.

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SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
In the Matter of
JORDAN BARDACH, Index No. 159110/2023

Jordan,

-against-

ANNA MARTYNOVA,
JENNIFER MILOSAVLJEVIC,
YOEL HERSHKOWITCH, and
ARON WOLOCOWITZ,

Respondents,

-against-

RENTABILITY, INC.,

Nominal Respondent.

RESPONDENTS’ POST TRIAL MEMORANDUM OF LAW

KUDMAN TRACHTEN ALOE POSNER LLP
488 Madison Avenue, 23rd Floor
New York, New York 10022
Tel: (212) 868-1010

Attorneys for Respondents Anna Martynova,
Jennifer Milosavljevic, Yoel Hershkowitz and Aron
Wolcowitz

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TABLE OF CONTENTS

TABLE OF CONTENTS ............................................................................................................................ i

TABLE OF AUTHORITIES ..................................................................................................................... ii

PRELIMINARY STATEMENT ............................................................................................................... 1

FACTUAL BACKGROUND AND TRIAL .............................................................................................. 3

ARGUMENT ............................................................................................................................................. 11

I. The September 1, 2023 Meeting is Valid ..................................................................................... 11
A. Jennifer Did Not Resign ............................................................................................................... 11
C. The Election Was Conducted in Accordance with Rentability By-Laws ................................. 15
II. Jordan’s September 5, 2023 Meeting is Invalid...................................................................... 16
A. Jordan Did Not Provide Anna with Any Due Process................................................................ 16
B. Jordan Cannot Elect Himself as the only Board Member ........................................................ 20
C. Notice of the Meeting Was Defective ........................................................................................... 20
III. Jordan Is Not Entitled to a Permanent Injunction ................................................................ 21
B. The Balance of the Equities Favor Respondents ........................................................................ 22
CONCLUSION ......................................................................................................................................... 22

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TABLE OF AUTHORITIES

Page(s)
Cases

Aid Associates Inc, v. Mitchell Kay.,
2006 WL 4682140 (N.Y. Sup. Ct. New York Cnty. Mar. 21, 2006) .......................................... 21

Alwini v. Ali,
2013 WL 6762108 (N.Y. Sup. Ct. Queens Cnty. Dec. 06, 2013) .............................................. 20

Application of Goldman,
207 N.Y.S.2d 309 (Sup. Ct. New York Cnty. 1960) .................................................................. 15

Bd. of Managers of the Park Regent Condominium v. Park Regent Associates,
2007 WL 7271224 (N.Y. Sup. Ct. Queens Cnty. Oct. 31, 2007) ............................................... 21

Bd. of Managers of Townhomes of Eastbrooke Condominiums One, Two & Three v. Padgett,
185 A.D.2d 650, (4th Dep’t 1992) ....................................................................................... 16, 17

Brenner v. Hart Sys., Inc.,
114 A.D.2d 363, (2d Dep’t 1985) .............................................................................................. 15

Brevetti v. Tzougros,
42 Misc. 2d 171, (Sup. Ct. Queens Cnty. 1964) ........................................................................ 17

Caplash v. Rochester Oral & Maxillofacial Surgery Assocs., LLC,
19 Misc. 3d 1138(A), (Sup. Ct. Monroe Cnty. 2008) ................................................................ 13

Capossela v. Wykagyl Country Club,
258 A.D.2d 522 (2d Dep’t 1999) ........................................................................................... 2, 18

Children's Day Treatment Ctr. & Sch., Inc. v. Dorn,
83 A.D.3d 425, (1st Dep’t 2011) ............................................................................................... 20

Delisle v. GCS Capital LLC,
2011 WL 11074920 (Sup. Ct. New York Cnty. May 27, 2011) ................................................. 13

Dwyer v. Klein,
2012 WL 10027989 (Sup. Ct. Bronx Cnty. Nov. 09, 2012) ...................................................... 12

EdCia Corp. v. McCormack,
44 A.D.3d 991, (2d Dep’t 2007) ................................................................................................ 22

Ellis v. Broder,
11 Misc. 3d 534, (Sup. Ct. New York Cnty. 2006) .............................................................. 17, 18

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In re Genger,
2008 WL 11188493 (N.Y. Sur. Dec. 31, 2008) .......................................................................... 14

James v. Nat'l Arts Club,
33 Misc. 3d 1211(A), (Sup. Ct. New York Cnty. 2011)............................................................. 18

Keller v. Kay,
170 A.D.3d 978, (2d Dep’t 2019) .............................................................................................. 22

Kelly v. Northport Yacht Club, Inc.,
2005 WL 6090283 ( Sup. Ct. New York Cnty. Mar. 08, 2005) ........................................... 16, 18

Lupe v. Shinseki,
2012 WL 3685954 (N.D.N.Y. Aug. 24, 2012) ........................................................................... 11

Machaneinu, Inc. v. Luria,
42 Misc. 3d 1204(A), 984 N.Y.S.2d 632 (N.Y. Sup. 2013) ................................................. 12, 15

Machne Menachem, Inc. v. Hershkop,
237 F. Supp. 2d 227 (E.D.N.Y. 2002) ............................................................................ 11, 13, 14
Marinelli v. Trio Asbestos Removal Corp.,
2009 WL 5427408 (Sup. Ct. Queens County June 16, 2009) ................................................... 12

Mayulianos v. North Babylon Regular Democratic Club, Inc.,
198 N.Y.S.2d 511 (N.Y. Sup. Ct. Suffolk Cnty. 1960)............................................................... 16

Mobarak v. XYZ Two Way Radio Serv., Inc.,
12 Misc. 3d 1163(A), (Sup. Ct. Kings Cnty. 2006) ................................................................... 19

Nametra, Inc. v. American Society of Travel Agents,
28 Misc.2d 291, (Supreme Court New York Cnty. 1961) ......................................................... 16

Noel v. Gay,
80 Misc. 3d 1231(A) (Sup. Ct. Kings Cnty. 2023) .................................................................... 15

Richmond Global Compass Fund Management GP, LLC v. Nascimento,
2023 WL 3175070 (Sup. Ct. New York Cnty. May 01, 2023) .................................................. 12

RST Res., Inc. v. Sumitomo Corp.,
33 A.D.3d 321, (1st Dep’t 2006) ............................................................................................... 11

Rst Resources, Inc. v. Sumitomo Corp.,
2003 WL 25668467 (Sup. Ct. New York Cnty. May 23, 2003) ............................................... 12

Williams v. U.S. of America Cricket Ass'n, Inc.,
2013 WL 2155599 (Sup. Ct. New York Cnty. May 15, 2013) .................................................. 13

iii

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Statutes

N.Y. Not-for-Profit Corp. Law § 707 ............................................................................................ 15

Regulations

22 NYCRR § 202.8-b ..................................................................................................................... 1

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PRELIMINARY STATEMENT

Respondents Anna (“Anna”), Jennifer Milosavljevic (“Jennifer”), Yoel Hershkowitz (“Mr.

Hershkowitz”) and Aron Wolcowitz (“Mr. Wolcowitz”) (collectively “Respondents”), respectfully

submit this post-trial memorandum of law i) in opposition to Petitioner Jordan Bardach’s

(“Jordan”) petition seeking an injunction preventing Respondents from being involved in the

management of Rentability, Inc. (“Rentability”) and a declaratory judgment nullifying the

September 1, 2023, board meeting, and ii) in support of Respondents’ cross motion to invalidate

Jordan’s September 5, 2023 meeting.

Jordan contends that he is the sole director of Rentability and that he and he alone controls

it. Unfortunately for Jordan, not for profit corporations do not operate in that fashion. Until

September 1, 2023, Rentability’s Board of Directors consisted of Jordan Bardach, Jennifer

Milosavljevic, and Anna Martynova and after Anna Martynova, Yoel Hershkowitz and Aron

Wolcowitz. Jennifer’s August 14, 2022, email was not a resignation and was never taken by anyone

as a resignation until 13 months later, when Jordan sought to unilaterally remove Anna at a

Starbucks in Southampton, New York.

Jordan maintains that after Jennifer allegedly resigned as a Board member 13 months

earlier, even though Rentability was required to maintain a three-member board. His contention

requires the Court to accept that for 13 months Rentability unlawfully operated with less than three

directors. He further contends that he alone was then able to change the composition of the Board

at a meeting that Jordan improperly noticed and that he alone attended at a Starbucks

approximately 100 miles away from the Company’s offices. The evidence shows that Jennifer did

not resign, and that the meeting called by Jordan was unlawful and invalid in that it was not noticed

to all the directors and that Anna’s removal was further unlawful and invalid in that a “meeting”

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at a Starbucks, by Jordan, and Jordan alone, with no notice to Anna of the charges against her, is

clearly not due process1.

Jordan’s improper running of Rentability has directly led to the issues in this case. Looking

to find any possible rationale to maintain control of the Company, Jordan alleges that Jennifer

resigned (allowing him to improperly retain unilateral control of the company), and that one single

paragraph, of one single email a year ago, was Jennifer’s resignation.

The alleged “resignation” does not mention resignation or quitting and was drafted as a

response to a specific question regarding signing a document. Jordan’s assertion that this email

was a formal written resignation, as required by the By-Laws, is undermined by his own behavior.

Jordan himself never once stated either orally or in writing, that Jennifer resigned from the

Company until the filing of this action and did not even claim that the email constituted a

resignation until a year later as a pretext for gaining control of the Company.

Jordan was aware that Jennifer remained in contact with the Board after the alleged

“resignation” and that the formal document transferring control from Jennifer to another party was

never executed. Anna even emailed Jordan after the alleged “resignation” that she needed to reach

out to Jennifer to “formalize the replacement.”

The evidence also shows that the September 5, 2023, board meeting and alleged removal

of Anna was palpably improper. Jordan did not even pretend to provide with Anna with any due

process and did everything in his power to ensure that she did not receive any.

Jordan intentionally misrepresented the removal hearing as a standard board meeting in his

notice. Jordan never presented Anna with any “charges” regarding her alleged wrongdoing at any

1
Capossela v. Wykagyl Country Club, 258 A.D.2d 522, 523 (2d Dep’t 1999)(expulsion of board
member of non-profit invalid where member was informed there were questions about his various
actions but was not specifically notified of charges or that he could be removed at meeting).

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time before the meeting. Even if Anna could have learned that Jordan intended to remove her,

Jordan ensured that it was almost impossible for her attend the meeting by scheduling the meeting

to occur at 9:00 AM at a Starbucks a three-hour car drive away from both her residence and the

headquarters of the company, without providing a video conference option.

The Petition should be denied in its entirety. Jordan asks this Court to change the entire

management of Rentability to give him unilateral control of the company. During Respondents’

September 1, 2023, meeting, a majority of the board, constituting a quorum, held a meeting and

properly elected the current board of directors. Jordan’s farce of a meeting where he allegedly

removed Anna with absolutely no due process violated her fundamental legal rights and cannot be

validated.

FACTUAL BACKGROUND AND TRIAL

The Court is respectfully referred to the Affidavits of Jennifer and Anna submitted in lieu

of direct testimony for a further accounting of the facts. Unless otherwise noted, citations to

Affidavits refer to the affidavits in lieu of direct testimony.

Rentability was formed on November 7, 2018, to provide Administering Agent services to

clients of City5 Consulting, LLC (“City5”). NYSCEF. 8. City5 funded both the attorney who

established Rentability, Solomon Steinman, and $50,000. NYSCEF. 42; NYSCEF. 60 Jordan is

(and was) a fifty percent member and a manager of City5. Issac Katz (“Issac”) was the other fifty

percent member and shareholder.

From the outset, Jordan operated Rentability without observing any corporate formalities

whatsoever and without following the bylaws. The corporate bylaws2 require a resolution to open

2
NYSCEF. 3, Art. IV Sec. 3(a).

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corporate bank accounts, but Jordan opened accounts without the required resolution, and paid

himself monies from the account without any corporate resolution.

The original board of directors consisted of Jordan, Martin Feinberg and Mary Knauf. Anna

Aff. ¶ 6, Tr. pg. 17:18-193. At some time, according to Jordan, Martin and Mary resigned.

Although the bylaws require resignations to be in writing4, Jordan had no written resignation from

either of them. Tr. pg. 22: 4-7. He claimed that Martin’s assistant sent a resignation, although it

has never been produced. Tr 21: 24 – 21:2. Jordan’s testimony about when they resigned was

contradictory. First, he claims that they resigned in June of 20215. Then he claimed that they

resigned in February 2019. NYSCEF. 79, 14. And although one of Jordan’s grievances is that

Anna submitted the name of Aleftina Budaeva (“Tina”) to HPD, Jordan himself represented to

HPD that Martin and Mary were on the Board after they resigned.

On September 1, 2019, Jordan made a submission to the HPD representing that that

Rentability would maintain three board members. NYSCEF No. 129. He further represented that

he, Anna and Jennifer were board members. In actuality, by Jordan’s own admission, Anna and

Jennifer had not yet been appointed. NYSCEF. 79, 15.

The date when Anna and Jennifer were appointed to the Board of Directors of Rentability

is unclear. In his affidavit, Jordan alleges that Anna and Jennifer were elected on September 19,

2019, but there is no resolution to that effect. NYSCEF. 79, 15.

There was no board meeting where Jennifer and Anna were elected nor is there any

memorialization of them being appointed, such as a resolution. Tr. pg. 33: 6-17; Tr. Pg. 89:16 –

3
The page numbers of the transcript referenced here are those found on the bottom of each
transcript page.
4
NYSCEF. 2, Art. III, Sec 3(b).
5
NYSCEF. 127, 84.

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90:14. Anna was allegedly appointed as Secretary; Jennifer was allegedly appointed as Vice

President and Jordan was allegedly appointed President. Jennifer became a member of the board

after Anna asked her to serve. Tr pg. 33:17-19. The evidence establishes that Jordan never once

had a meeting with Jennifer, nor did he ever speak to her about any Rentability business. Tr. 140:

1-13.

After their appointment, Jordan never called a meeting of the Board until the disputed

meetings in September 2023. Tr. 34: 8-13. In violation of the By-Laws, which requires books and

records to be kept at the corporate office 1115 Broadway, New York, NY, 10010. Jordan also does

not even recall where the Rentability books and records were kept, intentionally preventing the

other Board members from accessing them. Tr. 30: 1-21.

Throughout her time on the board, Anna performed all the work required for Rentability to

function. Anna Aff. ¶9. Jordan left for New York City for Southampton, New York in the summer

of 2022 and has not returned since. Anna Aff. ¶13.

Jordan often directed Anna to perform borderline illegal actions such as forging his

signature on documents. Tr. 156: 18-22; Anna Aff. ¶ 14. Specifically, Jordan instructed Anna, that

going forward she should put his signature on documents herself before sending them to a notary

to be notarized. Tr. 157: 1 – 158: 21; NYSCEF. 103.

On August 21, 2022, Anna reached out to Jennifer to ask her to sign certain documents to

be submitted to HPD. Anna Aff. ¶ 16. Jennifer replied that same day and stated she could not sign

the documents (“August 2022 Email”). Id; NYSCEF. 10. This email was clearly not a resignation

and Jennifer did not intend to resign and nothing in the email indicated she had resigned. Tr. 109:

6-8; Tr. 118: 11-13. The email did not contain the word resignation or any synonym thereof. The

email simply stated that she would not sign the document that had been tendered to her.

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Anna did not interpret the August 2022 email as a resignation. Anna Aff. ¶19. Jennifer also

knew that a resignation would leave the Board with only two directors causing additional problems

for Rentability because the bylaws require Rentability to have at least three directors. Tr. 108: 4-

6; Jennifer Aff. ¶9.

Jordan never attempted to reach Jennifer to confirm her alleged resignation. Tr. 41:7-10.

Similarly, Jordan never stated that Jennifer was no longer on the Board in any written or oral

statement. Tr. Pg. 49: 18-23.

On August 30, 2022, Anna sent Jennifer an email clarifying that in order to be formally

replaced Jennifer had to sign a “transfer” document. NYSCEF. 109, Anna Aff. ¶24. However, no

“transfer document” was ever signed. Id.

Both Anna and Jennifer expected a board meeting to be held or a unanimous consent

resolution to be enacted to replace Jennifer on the Board. Id. However, neither occurred as Jordan

as president failed to call a meeting. In fact, the bylaws require that Rentability conduct an annual

meeting of its directors each year to elect directors for the following year6, but Jordan never once

did that.

On August 22, 2022, Isaac commenced an action against Jordan accusing him of among

other things attempting to usurp corporate opportunities for himself. See NYSCEF. 1. City5

Consulting, LLC and Isaac Katz, derivatively on behalf of City5 Consulting, LLC v. Jordan

Bardach, Index no. 532/2022.

On September 14, 2022, Anna emailed Jordan suggesting that Tina replace Jennifer on the

Board. NYSCEF. 11. The email states “Isaac spoke with Tina and said she would be ok taking

over for Jennifer. I can let Jennifer know and we can finalize the substitution to ensure HPD

6
NYSCEF. 3, Art. III Sec. 5(a).

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compliance on our projects.” NYSCEF. 11. Jordan does not respond or state that Jennifer was

already off the Board. Id. Obviously, if Jennfer had resigned on August 21, 2022, there would be

no need to let Jennfer know at all or involve her in electing a new board member.

Anna and Jordan spoke about finding a replacement for Jennifer on a Zoom call on

September 16, 2022. Anna Aff. ¶27. They did not determine any plan of action and when Anna

questioned some of Jordan’s decisions, he threatened to remove her from the Board. Anna Aff.

¶29.

On October 20, 2022, Anna reached out to Jennifer to schedule a call to inform her of the

progress on her resignation and determine possible next steps. Id. at 30. During their phone call on

October 24, 2022, Jennifer and Anna discussed the proper way to replace Jennifer in accordance

with Rentability’s By-Laws. Id. at 30, NYSCEF. 109.

On October 24, 2022, Jennifer sought to determine the correct procedure for securing her

replacement and requested that she be sent a copy of the by-laws. Since neither Jennifer nor Anna

knew the correct procedure for replacing Jennifer, Anna emailed Jennifer a copy of the By-Laws

for her review. NYSCEF. 76, Anna Aff. ¶31, 32. Anna and Jennifer concluded that Jennifer should

not resign before a replacement was named, because Rentability was required to maintain three

directors and a document had been submitted to HPD which stated there would be three directors.

Jennifer Aff. ¶16, 17; NYSCEF 129.

Based on their review of the bylaws, both Anna and Jennifer understood there needed to

be a board meeting or unanimous consent resolution in order to replace Jennifer. Although Jordan

testified that he was considering replacements (he never said who they would be or shared any

communications with either Anna or Jennifer about possible replacements), Jordan never called a

board meeting or otherwise communicated with them. Tr. 81: 12 – 82:19.

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Instead, Jordan apparently decided that Anna had taken sides with Isaac in the lawsuit that

Isaac had commenced against Jordan. Jordan repeatedly pressured her to resign. In January 2023,

Issac moved for injunctive relief seeking, among other things, to prevent Jordan from firing

employees without his consent and from taking money unilaterally from City57. Jordan filed a

cross motion seeking injunctive relief allowing him to unilaterally fire employes8. Shortly before

filing his cross motion, Jordan accessed Anna’s email accounts at Rentability and City5. Anna Aff.

11. Anna responded by deleting emails that she had had with counsel.

The dueling motions resulted in injunctive relief by Judge Boddie which, among other

things prevented Jordan from firing Anna9.

Undeterred, Jordan then sought during August of 2023 to prevent Anna and other City5

employees from completing work Rentability was retained to do Anna Aff. ¶ 41. This was plainly

improper as the client had always understood that City5 would do certain work, and Jordan had

never hired any employees of Rentability to complete the work. Id.

In August of 2023, Jordan apparently attempted to do the very thing that Justice Boddie

forbid him from doing. He sent to Anna a notice10 that he was going to hold a meeting of

Rentability’s directors on September 5, 2023, at a Starbucks in Southampton, New York. He did

not send the notice to Jennfer, even though the board had never met to replace her with a new

director. The Southampton Starbucks is approximately 100 miles from Rentability’s New York

City office.

7
NYSCEF 44. City5 Consulting, LLC and Isaac Katz v. Jordan Bardach, Index no. 532/2022.
8
NYSCEF 107, See above.
9
NYSCEF 129 See above.
10
NYSCEF. 14.

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This notice did not contain any explanation of the purpose of the meeting and only stated

that: “the special meeting will be held to discuss and vote on board membership issues.” NYSCEF.

14. Anna never received any notice that the meeting was being held to replace her, let alone of any

formal charges against her. Anna Aff. ¶ 41.

After being notified of the September 5 meeting by Anna, Jennifer wrote to Jordan on

August 30th, stating that she found out about the meeting through Anna and that it was invalid due

to her lack of notice. Jennifer requested that the meeting be rescheduled, and she be provided with

a virtual option to attend. NYSCEF. 39.

Jordan refused to reschedule the meeting or allow attendance at the meeting by video

conference, reflecting his intent to summarily remove Anna without any other board members

present. Id. Jennifer sent a follow up email on August 30, 2023. Jennifer Aff. ¶ 24. The email read

in pertinent part:

Contrary to your claims, I have not formally submitted a resignation. In the email
communication I sent in August 2022, I merely expressed the need for my position
to be considered for replacement due to changing employment circumstances. It
should not, and cannot, under any circumstances, be construed as a
resignation notice. It did not contain any language that I had resigned.

As you acknowledged in your email, and in line with Article III (3)(b) of our
corporate bylaws, a director’s resignation necessitates a written notice to the Board
of Directors or an officer of the Corporation, and I have not provided such
resignation notice. NYSCEF. 40.

Anna also objected to the Starbucks meeting. She also pointed out that notice was not sent

to all directors and that a Starbucks coffee shop was “unfit for confidential board deliberations.”

NYSCEF. 47. On August 30, 2023, Anna and Jennifer called an annual meeting of Rentability to

be conducted on September 1, 2023, at the corporation’s offices. NYSCEF. 18. There is no dispute

that all directors received this notice. Jordan acknowledged receipt of the notice and stated that he

would not attend without providing a legitimate reason for his refusal. NYSCEF. 17; Anna Aff.

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¶45; Tr. 138:23 – 139: 1-4. Since both Jennifer and Anna attended and a majority of the board

was present, a quorum was constituted under the By-Laws11 and NPCL § 707. Anna Aff. ¶45.

During the meeting, the existing directors duly elected the new board of Anna, Mr.

Hershkowitz, and Mr. Wolocowitz as the board and passed a written resolution to formalize the

election. Anna Aff. ¶45 NYSCEF. 18. Although the By-Laws and the Not-for-Profit Corporation

Law require annual meetings, this was the first annual meeting that Rentability held12.

Jordan then held his own meeting on September 5, 2023, at the Southampton Starbucks.

He was the only one in attendance. He supposedly adopted a resolution removing Anna from the

Board, thereby making him the sole board member of Rentability. The resolution included several

charges of Anna’s alleged wrongdoing. NYSCEF.15. Anna was not notified that the Board

meeting was being held to remove her or of any specific charges against her prior to the meeting.

Tr. 75: 9-12. Anna had no opportunity to defend herself against these spurious charges. Anna Aff.

¶47.

Many of the allegations themselves are repetitive, incorrect and vague and refer to actions

Anna took at the order of Jordan, or actions involving the calling of the September 1, 2023, meeting

and the involvement of Jennifer. Anna Aff. ¶49, 41. The alleged grounds for her misconduct are

the very same grounds as submitted to Judge Boddie13, and were rejected by Judge Boddie14.

11
Art. III, Section 6.
12
Article III, Section 2.
13
NYSCEF. 71.
14
NYSCEF. 129.

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ARGUMENT

I. The September 1, 2023, Meeting is Valid

A. Jennifer Did Not Resign

Jordan asserts that Jennifer’s alleged resignation in August of 2022 makes the September

1, 2023, meeting invalid and thus gives Jordan full control of Rentability. Plaintiff has the burden

to prove a resignation. See RST Res., Inc. v. Sumitomo Corp., 33 A.D.3d 321, 323, (1st Dep’t 2006).

This burden requires a showing the board member “clearly and convincingly that they had

surrendered their position.” Machne Menachem, Inc. v. Hershkop, 237 F. Supp. 2d 227, 241

(E.D.N.Y. 2002)

In service of his power grab, Jordan searched for any possible evidence to present that

would allow him to take full control of the Company. Given that no communications between any

parties exists expressing that Jennifer resigned, Jordan alleges that one paragraph of a single email

from over a year ago where Jennifer said she could not sign one document is sufficient evidence

of Jennifer’s resignation. NYSCEF. 10.

However, the testimony and behavior of the parties shows that Jennifer did not resign and

remained on the board until her replacement was selected on September 1, 2023. Jennifer never

stated in any communications with any party that she resigned or intended to resign on August 21,

2022. Jordan never called her to ask her if it was a resignation, nor, until he was called out on not

sending Jennifer notice of the Starbucks meeting, did he ever assert that she had resigned. There

was never an email to anyone (HPD, City5 employees) that Jennifer had resigned.

Meanwhile, Jennifer continued to be in communication with members of the Board after

August of 2022. Anna sent Jordan emails after August of 2022 stating that Jennifer’s resignation

had yet to be finalized, and Jennifer did not execute the formal transfer/exit document sent to her

after August of 2022. NYSCEF. 109, See Lupe v. Shinseki, No. 1:10-CV-198 MAD/ATB, 2012

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WL 3685954, at *15-17 (N.D.N.Y. Aug. 24, 2012)(where Plaintiff sent an email mentioning

resignation but took no “affirmative steps” to resign and continued to be in communication with

the company her resignation was not effective).

In order for Jennifer to resign she had to present a formal written resignation letter to the

Board15. Machaneinu, Inc. v. Luria, 42 Misc. 3d 1204(A), 984 N.Y.S.2d 632 (N.Y. Sup.

2013)(board member remained on board after alleged oral resignation as By-Laws required any

resignations to be in writing). Jennifer’s email stating that she could not sign a document is

nowhere close to a formal letter of resignation. Richmond Global Compass Fund Management GP,

LLC v. Nascimento, No. 654190/2021, 2023 WL 3175070, at *8 (Sup. Ct. New York Cnty. May

01, 2023)(An email from defendant expressing a change in his work circumstances was not a letter

of resignation).

Further, the August 2022 email does not contain any language such as “resignation” or

“quit” and when a resignation is not apparent from face of a document, courts will deem a

resignation ineffective. NYSCEF. 10. Dwyer v. Klein, No. 309076/08, 2012 WL 10027989, at *2

(Sup. Ct. Bronx Cnty. Nov. 09, 2012)(teacher’s letter that she would not be returning for the next

school year was not resignation).

Whether or not Jennifer continued to perform her duties as a Board member is irrelevant

and she did not have many duties in the first place. Rst Resources, Inc. v. Sumitomo Corp., No.

114408/99, 2003 WL 25668467 (Sup. Ct. New York Cnty. May 23, 2003)(where officer failed to

continue performing duties this alone was not a resignation); Marinelli v. Trio Asbestos Removal

Corp., No. 23882/08, 2009 WL 5427408 (Sup. Ct. Queens County June 16, 2009)(Board member

not being involved in the day to day operation of the company for several years was not a

15
By-Laws Art. III Sec. 3(b).

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resignation); Machne Menachem, Inc. v. Hershkop, 237 F. Supp. 2d 227, 241 (E.D.N.Y.

2002)(board members failure to continue performing duties was not a resignation). Indeed, in

Jordan’s world, the directors (other than Anna) had no responsibility whatsoever – not even

attending board meetings.

Contrary to the assertions of Jordan, the fact that Jennifer never intended to resign is an

important factor in considering whether the August 2022 email was effective. Williams v. U.S. of

America Cricket Ass'n, Inc., No. 654334/12, 2013 WL 2155599 (Sup. Ct. New York Cnty. May

15, 2013)(where corporate officer sent a draft unsigned resignation email to Board, the alleged

resignation was ineffective because he only intended the letter to warn board to complete matters

before his resignation); Delisle v. GCS Capital LLC, No. 600579-2009, 2011 WL 11074920, at *5

(Sup. Ct. New York Cnty. May 27, 2011)(where email did not evidence a present desire to resign

the resignation was not effective); Caplash v. Rochester Oral & Maxillofacial Surgery Assocs.,

LLC, 19 Misc. 3d 1138(A), (Sup. Ct. Monroe Cnty. 2008)(where officer of company submitted a

written formal resignation there was an issue of fact as to whether it was effective because it could

be intended as an offer to resign).

In Delisle v. GCS Capital LLC, No. 600579-2009, 2011 WL 11074920, at *5 (N.Y. Sup.

Ct. New York Cnty. May 27, 2011), defendant corporation alleged that an employee resigned

based on an email that included “Goodbye” in the subject line and stated: “My contract terms

have been violated, and unfortunately, many other people may be impacted by my departure.” Id.

The employee argued that he did not intend to resign and only expected the parties to start

planning for his departure, similarly to Jennifer. The court ruled that the email was not a resignation

because “It does not expressly state a current, much less an immediate, intention to resign, only a

request to negotiate, and a resolve to leave the company, with no date for departure specified.” Id.

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Jennifer stated in both her testimony and affidavit that she did not want to resign and leave

Rentability with less than three board members which is another reason that her resignation was

ineffective. Milosavljevic Aff. 16, 17. In re Genger, No. 0017/2008, 2008 WL 11188493, at *2

(N.Y. Sur. Dec. 31, 2008)(where trustee did not follow all formalities in resignation letter and did

not intend to leave the trust missing a required trustee her resignation was not effective).

Machne Menachem, Inc. v. Hershkop, 237 F. Supp. 2d 227, 241 (E.D.N.Y. 2002), is

directly on point. There, one director of a not-for-profit sued the four other directors who he alleged

resigned from the Board of Directors. Similar to Rentability, the corporation failed to follow basic

not-for-profit regulations, did not hold any elections or write any resolutions when members joined

or left the Board. Id. at 234. The plaintiff submitted conflicting documents and testimony regarding

who was on the board at certain times and the court stated that the composition of the board

changed according to plaintiff’s whims. Id. The court concluded that plaintiff had been running

the company “essentially unilaterally.” Id. at 239.

The court held that during each “resigned” director’s cross-examination the burden was on

the plaintiff to establish that the director resigned. Id. at 230. Because each defendant testified that

they did not resign and because none of the defendants explicitly told the board that they were no

longer a member, the court held that they did not resign. Id. at 232. The court noted that according

to plaintiff’s allegations, the corporation would have been left with only two directors in violation

of NPCL 702(a) which required three. The court cited this as yet another reason to support its

finding that the defendants did not resign. Id.

B. Jennifer was Never Replaced

It is undisputed that Jennifer was never replaced after her alleged resignation and no formal

attempt was made to replace her. Under the terms of NPCL § 703(c): “Each director shall hold

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office until the expiration of the term for which he is elected or appointed, and until his successor

has been elected or appointed and qualified.” Brenner v. Hart Sys., Inc., 114 A.D.2d 363, 366,

(2d Dep’t 1985)(where no election was held to replace director who was allegedly “removed” the

director continued to serve on the Board); Noel v. Gay, 80 Misc. 3d 1231(A) (Sup. Ct. Kings Cnty.

2023)(“courts generally find that corporate office holders retain their positions until their

successors are elected and qualified”); Application of Goldman, 207 N.Y.S.2d 309, 310 (Sup. Ct.

New York Cnty. 1960) (Where Jordan had been duly elected as director of Not-For-Profit

corporation, and no new election had taken place under by-laws, Jordan still retained office of

director). Since Jennifer was not replaced until September of 2023, she remained a director of

Rentability prior to that date.

C. The Election Was Conducted in Accordance with Rentability By-Laws

Jennifer and Anna’s attendance at the September 5, 2023, meeting established a quorum

under the By-Laws and N.Y. Not-for-Profit Corp. Law § 707. NYSCEF. 18. Jennifer and Anna

cast their votes to elect a new Board and the resolutions of the board were duly recorded, witnessed

and certified. NYSCEF. 18. Machaneinu, Inc. v. Luria, 42 Misc. 3d 1204(A), (N.Y. Sup. Kings

Cnty. 2013)(where every member of a board of directors received a notice of the meeting and two

out of three directors attended the meeting the vote removing the third member from the Board

was valid).

Jordan asserted in his Petition that a lack of ten days’ notice caused the September 5, 2023,

meeting to be invalid pursuant to NPCL 605. NYSCEF. 22, pg. 17. However, as pointed out in

Respondent’s Opposition, NPCL 605 only applie

Case Info

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Jennifer G. Schecter Track Judge’s New Case

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Document for Jordan Bardach v. Anna Martynova, Jennifer Milosavljevic, Yoel Hershkowitch, Aron Wolocowitz, Rentability, Inc. (Nominal Respondent)

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