Preview
(FILED: NEW YORK COUNTY CLERK 0872772010) INDEX NO. 650159/2010
NYSCEF DOC. NO. 15 RECEIVED NYSCEF: 08/27/2010
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
HARVEY RUDMAN and HAROLD KUPLESKY, Index No. 650159/10
on Behalf of Each of Them Individually And
On Behalf Of Starrett City Preservation LLC,
Derivatively,
Plaintiffs,
- against -
CAROL GRAM DEANE, DISQUE D. DEANE,
SALT KETTLE LLC, ST. GERVAIS LLC and
STARRETT CITY PRESERVATION LLC,
Defendants.
peace nnn nnn nnn nee eee nen X
REPLY AFFIDAVIT OF HARVEY RUDMAN IN SUPPORT
OF MOTION FOR LEAVE TO AMEND THE COMPLAINT.
Harvey Rudman, being duly sworn deposes and says:
1 Iam a plaintiff in the above-captioned case. I submit this affidavit
in support of the plaintiffs’ motion for leave to amend (the “Motion”) and in order to
respond to groundless accusations against the plaintiffs and our attorneys made in papers
filed by the defendants in opposition to the Motion.
2. The defendants contend in opposition to the Motion that I and
plaintiff Harold Kuplesky knew of certain new facts alleged in the Second Amended
Complaint prior to June 4, 2010, when the First Amended Complaint was filed.
Specifically, defendants contend that prior to June 4, I knew that assignments or other
transfers of the general partners’ (Disque Deane and Salt Kettle LLC’s (“SKI”))
economic interests in Starrett City Associates LP (“SCA”) were assigned to the new
506613.1
entities we seek to add as defendants in the Second Amended Complaint. These
allegations are not true.
3 In 2006, the general partners of SCA assigned their economic
interests in SCA to Starrett City Preservation LLC (“Preservation”). Iam a 15.01%
member of Preservation. These economic interests increased significantly in value as a
result of the refinancing of Starrett City and resulted in my entitlement to those benefits.
4. Notwithstanding my membership in Preservation, for more than a
year the defendants have kept me completely in the dark as to what was to occur, and
what did occur, in connection with the refinancing. Even now, it is not clear what has
occurred, and the few exhibits filed by the defendants in opposition to the Motion only
complicate, rather than clarify, the situation.
5 The first time I learned that any aspect of the general partners’
interests in SCA (whether their economic interests or their legal interests) had been
assigned to any other person or entity was in April or May of 2010, when our attorneys
located publicly-filed real estate documents that the defendants had filed in connection
with the refinancing. These documents were signed by an entity designated as the
managing general partner of SCA, rather than Deane who had been the managing general
partner. I had never been told that there was any need to transfer any general partner
interest. I was never told that such a transfer had been made. My consent, as a member
of Preservation, was never sought for the transfer, nor was I advised that Preservation had
consented to any transfer (if, in fact, it did as defendants claim).
6 In fact, notwithstanding my ownership interest in Preservation and
my rights under the Preservation Limited Liability Company Agreement, I was not sent a
506613.1
single document by Preservation or any other defendant or proposed defendant in
connection with the refinancing. While the limited partners of SCA were apparently
kept apprised of events through occasional mailings, I was not sent the materials that
were provided to the limited partners, or any other materials. I was not provided with
information about the structure of the refinancing transaction, about the lender’s
requirements associated with it, or about the transfer of assets of SCA -- including the
general partners’ economic interest in SCA, which had been assigned to Preservation -- to
newly created entities. I was not advised when the refinancing closed. I did not receive
any financial accounting of the transaction. I have never received the refinancing closing
documentation or many of the legal documents evidencing the assignments and transfers
that were apparently made.
7 The defendants’ arguments of our alleged knowledge of pertinent
events are particularly ironic given that for more than a year, through my attorneys, I
have attempted to find out information about the refinancing, and to obtain confirmation
that my rights were being honored and protected. In response, the defendants have hired
a rotation of three different sets of attorneys, none of whom elected to keep us informed
of pertinent information or documents, including with regard to these assignments.
8 The documents we received from public filings in the Spring of
2010 did not indicate what interests of the SCA general partners had been transferred to
new entities. While Deane’s and SKI’s economic interests in SCA had been assigned to
Preservation in 2006, their rights, powers and authority as general partners had not been
assigned. Thus, at the time that we filed the First Amended Complaint, it appeared that
' After this case was filed, I received a partial payment from Preservation via the
attorneys, but am still entitled to substantially more.
506613.)
these (or at least Deane’s) legal interests had been assigned, but we had no knowledge
that the general partners had assigned, or endeavored to assign, their economic interests
in SCA to any third party. We therefore alleged in the First Amended Complaint the
state of our knowledge at that time: that Deane’s “legal interest” had been assigned. See
Amended Complaint, Exhibit A to the Affirmation of Jacqueline G. Veit in Support of
Plaintiffs’ Motion for Leave To File a Second Amended Complaint, at { 9.
9 After we filed the First Amended Complaint, we learned facts that
for the first time indicated that Deane and SKI had transferred their economic interests in
SCA to newly-created entities. In June 2010, I saw for the first time certain materials that
had been circulated by the defendants to the limited partners in SCA between December
2009 and mid-2010. Among them were the documents referenced in the Second
Amended Complaint between paragraphs 98 and 104, including the chart attached as
Exhibit 4 to the proposed Second Amended Complaint. This chart expressly says that
proposed defendants DD Shopping Center LLC and SK Shopping Center LLC together
hold a 19.9% “economic interest” in Spring Creek Plaza LLC. That economic interest
belongs to Preservation. Of significance to us was not only the fact that Preservation is
nowhere seen on this chart (as defendants contend), but the fact that the chart shows that
new entities now hold all of Deane’s and SKI’s general partner interests in such assets,
including the economic interests previously assigned to Preservation.
10. In the opposition papers, the defendants try to backtrack from this
chart, arguing that it is incomplete in its omission of any reference to Preservation. They
attach another chart -- which they refer to as the “approved” chart -- which they state was
part of the refinancing closing documents (none of which I have ever seen). This
5066131
re rn mer mr enna gee tee emer terre 2 RIT IET
~
“approved” chart shows Preservation’s ownership interest in text-balloons two steps
below those entities. This document does not clarify the situation, but nonetheless
supports the Motion. This is only a summary chart, and the documents reflecting the
legal transfers and relationships that the chart attempts to portray are still unavailable to
us. It cannot be determined from the documents provided what exactly was transferred to
which entity, and which person or entity now holds the “economic interest” that belongs
Bo
to Preservation. However, the new chart, and Defendants’ opposition papers, seem to
confirm that the economic interests which previously were assigned to Preservation. have
now, improperly, purportedly been transferred to these new entities.
/ J
arvey Rudman
Sworn and subscribed to
before this 4% da
of Au t, 2010
tary Phblic
JACQUELINE G.
Notary Public, State of New York
No. 31-50098
ied in Bronx
Co
Cornmi
Exprie
ssis Marchon
22, 20 _/ 2
506613.)
—__—
Preview
(FILED: NEW YORK COUNTY CLERK 0872772010) INDEX NO. 650159/2010 NYSCEF DOC. NO. 15 RECEIVED NYSCEF: 08/27/2010 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK HARVEY RUDMAN and HAROLD KUPLESKY, Index No. 650159/10 on Behalf of Each of Them Individually And On Behalf Of Starrett City Preservation LLC, Derivatively, Plaintiffs, - against - CAROL GRAM DEANE, DISQUE D. DEANE, SALT KETTLE LLC, ST. GERVAIS LLC and STARRETT CITY PRESERVATION LLC, Defendants. peace nnn nnn nnn nee eee nen X REPLY AFFIDAVIT OF HARVEY RUDMAN IN SUPPORT OF MOTION FOR LEAVE TO AMEND THE COMPLAINT. Harvey Rudman, being duly sworn deposes and says: 1 Iam a plaintiff in the above-captioned case. I submit this affidavit in support of the plaintiffs’ motion for leave to amend (the “Motion”) and in order to respond to groundless accusations against the plaintiffs and our attorneys made in papers filed by the defendants in opposition to the Motion. 2. The defendants contend in opposition to the Motion that I and plaintiff Harold Kuplesky knew of certain new facts alleged in the Second Amended Complaint prior to June 4, 2010, when the First Amended Complaint was filed. Specifically, defendants contend that prior to June 4, I knew that assignments or other transfers of the general partners’ (Disque Deane and Salt Kettle LLC’s (“SKI”)) economic interests in Starrett City Associates LP (“SCA”) were assigned to the new 506613.1 entities we seek to add as defendants in the Second Amended Complaint. These allegations are not true. 3 In 2006, the general partners of SCA assigned their economic interests in SCA to Starrett City Preservation LLC (“Preservation”). Iam a 15.01% member of Preservation. These economic interests increased significantly in value as a result of the refinancing of Starrett City and resulted in my entitlement to those benefits. 4. Notwithstanding my membership in Preservation, for more than a year the defendants have kept me completely in the dark as to what was to occur, and what did occur, in connection with the refinancing. Even now, it is not clear what has occurred, and the few exhibits filed by the defendants in opposition to the Motion only complicate, rather than clarify, the situation. 5 The first time I learned that any aspect of the general partners’ interests in SCA (whether their economic interests or their legal interests) had been assigned to any other person or entity was in April or May of 2010, when our attorneys located publicly-filed real estate documents that the defendants had filed in connection with the refinancing. These documents were signed by an entity designated as the managing general partner of SCA, rather than Deane who had been the managing general partner. I had never been told that there was any need to transfer any general partner interest. I was never told that such a transfer had been made. My consent, as a member of Preservation, was never sought for the transfer, nor was I advised that Preservation had consented to any transfer (if, in fact, it did as defendants claim). 6 In fact, notwithstanding my ownership interest in Preservation and my rights under the Preservation Limited Liability Company Agreement, I was not sent a 506613.1 single document by Preservation or any other defendant or proposed defendant in connection with the refinancing. While the limited partners of SCA were apparently kept apprised of events through occasional mailings, I was not sent the materials that were provided to the limited partners, or any other materials. I was not provided with information about the structure of the refinancing transaction, about the lender’s requirements associated with it, or about the transfer of assets of SCA -- including the general partners’ economic interest in SCA, which had been assigned to Preservation -- to newly created entities. I was not advised when the refinancing closed. I did not receive any financial accounting of the transaction. I have never received the refinancing closing documentation or many of the legal documents evidencing the assignments and transfers that were apparently made. 7 The defendants’ arguments of our alleged knowledge of pertinent events are particularly ironic given that for more than a year, through my attorneys, I have attempted to find out information about the refinancing, and to obtain confirmation that my rights were being honored and protected. In response, the defendants have hired a rotation of three different sets of attorneys, none of whom elected to keep us informed of pertinent information or documents, including with regard to these assignments. 8 The documents we received from public filings in the Spring of 2010 did not indicate what interests of the SCA general partners had been transferred to new entities. While Deane’s and SKI’s economic interests in SCA had been assigned to Preservation in 2006, their rights, powers and authority as general partners had not been assigned. Thus, at the time that we filed the First Amended Complaint, it appeared that ' After this case was filed, I received a partial payment from Preservation via the attorneys, but am still entitled to substantially more. 506613.) these (or at least Deane’s) legal interests had been assigned, but we had no knowledge that the general partners had assigned, or endeavored to assign, their economic interests in SCA to any third party. We therefore alleged in the First Amended Complaint the state of our knowledge at that time: that Deane’s “legal interest” had been assigned. See Amended Complaint, Exhibit A to the Affirmation of Jacqueline G. Veit in Support of Plaintiffs’ Motion for Leave To File a Second Amended Complaint, at { 9. 9 After we filed the First Amended Complaint, we learned facts that for the first time indicated that Deane and SKI had transferred their economic interests in SCA to newly-created entities. In June 2010, I saw for the first time certain materials that had been circulated by the defendants to the limited partners in SCA between December 2009 and mid-2010. Among them were the documents referenced in the Second Amended Complaint between paragraphs 98 and 104, including the chart attached as Exhibit 4 to the proposed Second Amended Complaint. This chart expressly says that proposed defendants DD Shopping Center LLC and SK Shopping Center LLC together hold a 19.9% “economic interest” in Spring Creek Plaza LLC. That economic interest belongs to Preservation. Of significance to us was not only the fact that Preservation is nowhere seen on this chart (as defendants contend), but the fact that the chart shows that new entities now hold all of Deane’s and SKI’s general partner interests in such assets, including the economic interests previously assigned to Preservation. 10. In the opposition papers, the defendants try to backtrack from this chart, arguing that it is incomplete in its omission of any reference to Preservation. They attach another chart -- which they refer to as the “approved” chart -- which they state was part of the refinancing closing documents (none of which I have ever seen). This 5066131 re rn mer mr enna gee tee emer terre 2 RIT IET ~ “approved” chart shows Preservation’s ownership interest in text-balloons two steps below those entities. This document does not clarify the situation, but nonetheless supports the Motion. This is only a summary chart, and the documents reflecting the legal transfers and relationships that the chart attempts to portray are still unavailable to us. It cannot be determined from the documents provided what exactly was transferred to which entity, and which person or entity now holds the “economic interest” that belongs Bo to Preservation. However, the new chart, and Defendants’ opposition papers, seem to confirm that the economic interests which previously were assigned to Preservation. have now, improperly, purportedly been transferred to these new entities. / J arvey Rudman Sworn and subscribed to before this 4% da of Au t, 2010 tary Phblic JACQUELINE G. Notary Public, State of New York No. 31-50098 ied in Bronx Co Cornmi Exprie ssis Marchon 22, 20 _/ 2 506613.) —__—