On March 09, 2010 a
Letter,Correspondence
was filed
involving a dispute between
Kuplesky, Harold, Individually And On Behalf Of Starrett City Preservation Llc, Derivatively,
Rudman, Harvey, Individually And On Behalf Of Starrett City Preservation Llc, Derivatively,
and
Carol Gram Deane,
Dd Shopping Center Llc,
Dd Spring Creek Llc,
Disque D. Deane,
Salt Kettle Llc,
Sk Shopping Center Llc,
Sk Spring Creek Llc,
Spring Creek Plaza Llc,
Starrett City Preservation Llc,
St. Gervais Llc,
for Commercial Division
in the District Court of New York County.
Preview
WARNER PARTNERS, P.C.
ATTORNEYS AT LAW,
950 THIRD AVENUE
NEW YORK, NEW YORK 10022
‘TELEPHONE
| (212) 593-8000
| TELECOPIER
j (212) 593-9058
| April 15, 2014
Hon. Shirley Werner Kornreich
Justice
Supreme Court, New York County
60 Centre Street
New York, New York 10007
Re: Rudman et ano. v. Deane et al.; Index No. 650159/10
Dear Justice Kornreich:
1 We write in response to plaintiffs’ second unauthorized letter, this one dated April 11,
which casts them in an even worse light than their April 8 letter did.
First, in our April 8 letter we presented detailed research showing that a legislative
amendment was necessary to enable existing Mitchell-Lama project owners to refinance in
excess of their project cost (and thus enable them to realize a profit by taking out the increased
equity in their property). Yet plaintiffs still “do not agree” (see Eiseman letter of April 11, p. 1,
last para.). Not surprisingly, they offer no reason or authority for their disagreement. Indeed,
counsel actually criticize us for responding in detail to their misrepresentations in this regard.
Second, plaintiffs dispute the proposition that an equity take out was possible in a sale or
privatization, as opposed to a refinancing, without enabling legislation, but they offer no reason
or authority for their disagreement other than irrelevant deposition excerpts that do not refer to,
much less support, the notion that enabling legislation was necessary to permit a Mitchell-Lama
owner to sell its property for a profit. In fact, a legislative change was necessary to permit
Mitchell-Lama owners to refinance their property with an equity take out (as we have shown in
our April 4 and 11 letters), but the same was not true of a sale or a privatization (where the
selling owner would be leaving Mitchell-Lama). While a preservation sale of Starrett City
would have required a new owner to accept Mitchell-Lama’s restrictions, including on project
indebtedness, nothing in Mitchell-Lama would have dictated the sale price or otherwise
prohibited SCA from realizing a profit upon a sale or privatization.
Third, counsel’s newly minted argument is also incorrect as to the ability of purchasers in
a “preservation” transaction (i.e., where the project stays within Mitchell-Lama) to borrow in
order to meet a selling price above original project cost; of course a fortiori that is true in a
privatization sale or refinancing context, as no Mitchell-Lama restrictions would apply at all.
Counsel’s argument to the contrary is contradicted by the deposition testimony of their own
clients:WARNER PARTNERS, P.C. Hon. Shirley Werner Kornreich
April 15, 2014
Page 2
a. Deposition of plaintiff Kuplesky (March 27, 2012) at 290 (“Q.... in your
understanding -- [was] any legislation necessary for a -- that a purchaser would
need in obtaining a mortgage? A. I don't believe so.”);
b. Deposition of plaintiff Rudman (March 6, 2012) at 296-97 (“Q. I'm simply trying
to obtain your confirmation of the fact that, unless this legislation had passed, the
limited partners of Starrett City would not be able to refinance at a high enough
number to take out equity? ... A. No. You could have gone the route of a
privatization. And in the route of privatization, coming out of governmental
regulation, one could have refinanced in excess of their cost.”).
Plaintiffs’ two unauthorized letters advance frivolous arguments in a vain attempt to
generate the appearance of disputes where none in fact exist. We therefore respectfully ask the
Court to prohibit any further correspondence from either party on this subject. The unauthorized
correspondence plaintiffs initiated simply confirms that our April 4 letter fully and completely
addressed Your Honor’s questions.
Respectfully,
NEWMAN & GREENBERG LLP WARNER PARTNERS, P.C.
Attorneys for Carol Gram Deane Attorneys for All Defendants (except
Carol Gram Deane and Spring Creek Plaza LLC)
vy Liclud A. Gud. 9. CF (ated
Richard A. Greenberg Kenneth E. Warner
FOLEY & LARDNER LLP
Attorneys for Spring Creek Plaza LLC
Peter N. Wang, Esq.
Jonathan H. Friedman, Esq.
cc: All Counsel of Record (via e-filing)
Document Filed Date
April 15, 2014
Case Filing Date
March 09, 2010
Category
Commercial Division
For full print and download access, please subscribe at https://www.trellis.law/.
Preview
WARNER PARTNERS, P.C. ATTORNEYS AT LAW, 950 THIRD AVENUE NEW YORK, NEW YORK 10022 ‘TELEPHONE | (212) 593-8000 | TELECOPIER j (212) 593-9058 | April 15, 2014 Hon. Shirley Werner Kornreich Justice Supreme Court, New York County 60 Centre Street New York, New York 10007 Re: Rudman et ano. v. Deane et al.; Index No. 650159/10 Dear Justice Kornreich: 1 We write in response to plaintiffs’ second unauthorized letter, this one dated April 11, which casts them in an even worse light than their April 8 letter did. First, in our April 8 letter we presented detailed research showing that a legislative amendment was necessary to enable existing Mitchell-Lama project owners to refinance in excess of their project cost (and thus enable them to realize a profit by taking out the increased equity in their property). Yet plaintiffs still “do not agree” (see Eiseman letter of April 11, p. 1, last para.). Not surprisingly, they offer no reason or authority for their disagreement. Indeed, counsel actually criticize us for responding in detail to their misrepresentations in this regard. Second, plaintiffs dispute the proposition that an equity take out was possible in a sale or privatization, as opposed to a refinancing, without enabling legislation, but they offer no reason or authority for their disagreement other than irrelevant deposition excerpts that do not refer to, much less support, the notion that enabling legislation was necessary to permit a Mitchell-Lama owner to sell its property for a profit. In fact, a legislative change was necessary to permit Mitchell-Lama owners to refinance their property with an equity take out (as we have shown in our April 4 and 11 letters), but the same was not true of a sale or a privatization (where the selling owner would be leaving Mitchell-Lama). While a preservation sale of Starrett City would have required a new owner to accept Mitchell-Lama’s restrictions, including on project indebtedness, nothing in Mitchell-Lama would have dictated the sale price or otherwise prohibited SCA from realizing a profit upon a sale or privatization. Third, counsel’s newly minted argument is also incorrect as to the ability of purchasers in a “preservation” transaction (i.e., where the project stays within Mitchell-Lama) to borrow in order to meet a selling price above original project cost; of course a fortiori that is true in a privatization sale or refinancing context, as no Mitchell-Lama restrictions would apply at all. Counsel’s argument to the contrary is contradicted by the deposition testimony of their own clients:WARNER PARTNERS, P.C. Hon. Shirley Werner Kornreich April 15, 2014 Page 2 a. Deposition of plaintiff Kuplesky (March 27, 2012) at 290 (“Q.... in your understanding -- [was] any legislation necessary for a -- that a purchaser would need in obtaining a mortgage? A. I don't believe so.”); b. Deposition of plaintiff Rudman (March 6, 2012) at 296-97 (“Q. I'm simply trying to obtain your confirmation of the fact that, unless this legislation had passed, the limited partners of Starrett City would not be able to refinance at a high enough number to take out equity? ... A. No. You could have gone the route of a privatization. And in the route of privatization, coming out of governmental regulation, one could have refinanced in excess of their cost.”). Plaintiffs’ two unauthorized letters advance frivolous arguments in a vain attempt to generate the appearance of disputes where none in fact exist. We therefore respectfully ask the Court to prohibit any further correspondence from either party on this subject. The unauthorized correspondence plaintiffs initiated simply confirms that our April 4 letter fully and completely addressed Your Honor’s questions. Respectfully, NEWMAN & GREENBERG LLP WARNER PARTNERS, P.C. Attorneys for Carol Gram Deane Attorneys for All Defendants (except Carol Gram Deane and Spring Creek Plaza LLC) vy Liclud A. Gud. 9. CF (ated Richard A. Greenberg Kenneth E. Warner FOLEY & LARDNER LLP Attorneys for Spring Creek Plaza LLC Peter N. Wang, Esq. Jonathan H. Friedman, Esq. cc: All Counsel of Record (via e-filing)