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(FILED: NEW YORK COUNTY CLERK 0871572014 02:48 PM INDEX NO. 650159/2010
| NYSCEF DOC. NO. 352 RECEIVED NYSCEF 08/15/2014
SUPREME COURT OF STATE OF NEW YORK
COUNTY OF NEW YORK
nec nnn nana nnn nana enn nne enc eween cence enenmenencnnennecsecnencnee=
HARVEY RUDMAN and HAROLD KUPLESKY,
on behalf of Each of Them Individually And
On Behalf of Starrett City Preservation LLC, Index No, 650159/10
Derivatively,
Plaintiffs,
NOTICE OF SETTLEMENT
-against-
CAROL GRAM DEANE, THE ESTATE OF
DISQUE D. DEANE by CAROL G. DEANE,
AS TEMPORARY EXECUTRIX, SALT
KETTLE LLC, ST. GERVAIS LLC, STARRETT
CITY PRESERVATION LLC, DD SPRING
CREEK LLC, SK SPRING CREEK.
LLC, SPRING CREEK PLAZA LLC, DD
SHOPPING CENTER LLC and SK SHOPPING
CENTER LLC,
Defendants.
- jetenewnnnnnnnnnneenewenencenmencnnne X
PLEASE TAKE NOTICE that a (proposed) Order, Declaration and Judgment on
Motion for Partial Summary Judgment, of which the within is a true copy, will be presented for
settlement to the Hon. Shirley Werner Kornreich, one of the judges of the within-named Court, at
60 Centre Street, IAS Part 54, Room 228, New York, New York on August 20, 2014, at 9:30 a.m.
Dated: New York, New York
August 15, 2014
WARNER PARTNERS, P.C.
Attorneys for All Defendants (except Carol Gram
Deane and Spring Creek Pla:
By: CS ve.
Kenneth E. Warner, Esq.
950 Third Avenue, 32nd Floor
New York, New York 10022
(212) 593-8000
NEWM. & GREENBER‘
Attorne; pr D, GE ndant grol|Gram Deane
By
jv hard PAdGreen!
Ly
berg, sq
950 hird Avenue, 32nd Floor
New York, New York 10022
(212) 308-7900
FOLEY & LARDNER LLP
Attorneys for Defendant Spring Creek Plaza LLC
By: Qo S|
Peter N. Wang, Esq.
Jonathan H. Friedman, Esq,
90 Park Avenue
New York, New York 10166
(212) 682-7474
To: GOLENBOCK EISEMAN ASSOR
BELL & PESKOE LLP
Attorneys for Plaintiffs
DavidJ. Eiseman, Esq
Jacqueline G. Veit, Esq.
David Shamshovich, Esq.
437 Madison Avenue, 35" Floor
New York, New York 10022
(212) 907-7300
At IAS Part 54, of the Supreme Court of
the State of New York, County of New
York, at the Courthouse, 60 Centre
Street, New York, New York, on the
day of August, 2014.
PRESENT:
HON. SHIRLEY WERNER KORNREICH,
Justice
a
HARVEY RUDMAN and HAROLD KUPLESKY,
on behalf of Each of Them Individually And
On Behalf of Starrett City Preservation LLC,
Derivatively,
Plaintiffs, Index No. 650159/10
-against-
(PROPOSED)
CAROL GRAM DEANE, THE ESTATE OF ORDER, DECLARATION
DISQUE D. DEANE by CAROL G. DEANE, AND JUDGMENT
AS TEMPORARY EXECUTRIX, SALT ON MOTION FOR PARTIAL
KETTLE LLC, ST. GERVAIS LLC, STARRETT SUMMARY JUDGMENT
CITY PRESERVATION LLC, DD SPRING
CREEK LLC, SK SPRING CREEK
LLC, SPRING CREEK PLAZA LLC, DD
SHOPPING CENTER LLC and SK SHOPPING
CENTER LLC,
Defendants.
ae ann nnn nnn nn nn nnn nnn nnn nnn nn nnn
Defendants having moved pursuant to CPLR 3212 for partial summary judgment as to
plaintiffs’ Second Amended Complaint, including the following relief:
a. Dismissal of plaintiffs’ Ninth Cause of Action which seeks, inter alia, a judgment
declaring that plaintiffs’ Sharing Ratio cannot be reduced pursuant to Section 3.3
of the Preservation Agreement (“the Agreement”) without plaintiffs sharing — at
their full Sharing Ratios — in what plaintiffs have characterized as a “full
distribution of the MGP/SKI’s share of the Refinancing Proceeds,” which
according to plaintiffs includes, inter alia, an 18.9% share to plaintiffs in Starrett
City Associates (“SCA”);
A ruling that the Managing Member of Starrett City Preservation LLC
(“Preservation”) was authorized by Section 4.2(iii) of the Agreement to award
bonuses, as she did, to members of the office staff, including Robert Poll, Curt
Deane and Iris Sutz, and to create a reserve for future office staff bonuses, as she
did;
A ruling that plaintiff Kuplesky’s Sharing Ratio was properly reduced by 70%
pursuant to Section 5.5 of the Agreement, i.e., from 11.63% to 3.49%; and
An order or judgment granting such other and further relief as the Court deems
just and proper; and
Defendants having submitted by electronic filing the following moving papers in support
of their motion: (a) Notice of Motion, dated July 3, 2013; (b) Affirmation of Kenneth E. Warner,
Esq., affirmed July 3, 2013, and the exhibits annexed thereto; (c) the parties’ Joint Statement of
Undisputed Material Facts, dated July 3, 2013; and (d) Defendants’ Corrected Memorandum of
Law in Support of Motion for Summary Judgment, dated July 3, 2013 (electronically filed on
October 23, 2014); and
Plaintiffs having opposed defendants’ motion for partial summary judgment and having
submitted the following papers in opposition: (a) Corrected Affirmation of Jacqueline Veit, Esq.,
affirmed August 14, 2013, with exhibits annexed thereto (electronically filed on August 23,
2013); and (b) plaintiffs’ Corrected Memorandum of Law in Opposition to Defendants Motion
for Partial Summary Judgment, dated August 14, 2013 (electronically filed on August 23, 2013);
and
Defendants having submitted the following reply papers in further support of said
motion: (a) Corrected Reply Affirmation of Kenneth E. Warner, Esq., affirmed October 1, 2013,
and the exhibits annexed thereto (electronically filed on October 3, 2013); and (b) Defendants’
Corrected Reply Memorandum of Law in Support of Motion for Partial Summary Judgment,
dated October 1, 2013 (electronically filed on October 3, 2013); and
The Court having heard oral argument (per Kenneth E. Warner, Esq., for defendants,
and Jacqueline G. Veit, Esq., for plaintiffs) on December 10, 2013, and a transcript of the oral
argument having been made and filed; and
The Court, by Order dated March 27, 2014, having requested the parties to submit
supplemental briefing and the parties having made such supplemental submissions by,
respectively, letters from plaintiffs dated April 4, 2014 (signed by Jacqueline G. Veit, Esq.) and
April 8, 2014 and April 11, 2014 (signed by David J. Eiseman, Esq.), and from defendants dated
April 4, 2014, April 11, 2014 and April 15, 2014 (from counsel for all defendants); and
The Court having read and filed all of the foregoing submissions and arguments, and due
deliberation by the Court having been had thereon, and the Court having issued a written
Decision, Order & Judgment dated July 28, 2014; it is hereby
ORDERED AND ADJUDGED that defendants’ motion for partial summary judgment as
to plaintiffs’ Second Amended Complaint is granted in part, and the First through Eighth Causes
of Action in the Second Amended Complaint are dismissed to the extent they assert claims that
the sums awarded as bonuses by Preservation’s Managing Member to Iris Sutz, Robert Poll and
Curt Deane, and the sums set aside by Preservation’s Managing Member for future bonus
payments, were unauthorized or otherwise improper under the Agreement; defendant Carol
Deane, as Managing Member of Preservation, had the right, pursuant to Section 4.2 of the
Agreement, to withhold from distribution to the Members up to a total of 15% of the cash
SS
payments it received from SCA from the December 2009 refinancing with Wells Fargo (the
“Refinancing”), for the purpose of paying bonuses to the staff members, including Messrs. Curt
Deane and Robert Poll and Ms. Sutz, and for creating a reserve fund from which to make future
bonus payments to office staff of Preservation and its affiliated entities, including anyone
working in the SCA offices on Starrett City business, regardless of the identity of their formal
employer; and it is further
ORDERED, ADJUDGED AND DECLARED that plaintiffs, as Members of
Preservation, were only entitled to their shares of the “payments” (i.e., cash distributions) made
to Preservation by SCA on behalf of SCA’s Managing General Partner and General Partner and,
as a result, on plaintiffs’ Ninth Cause of Action, the Managing Member of Preservation has the
power, pursuant to Section 3.3 of the Agreement, to reallocate the Sharing Ratios of any Member
of Preservation, including reducing the Member’s Sharing Ratio to zero, when (i) SCA (or its
successors) has distributed to Preservation all cash distributions it is required to make to its
Managing General Partner and General Partner under Sections 3.02 and 3.03 of the SCA
Partnership Agreement from the proceeds of the Refinancing; (ii) Preservation has distributed to
its Members, in accordance with Section 4.2 of the Agreement, any and all cash distributions it
received from SCA from the proceeds of the Refinancing; and (iii) such distributions by
Preservation amount to $10 million or more, in the aggregate; and it is further
ORDERED that the remaining causes of action are severed and shall continue; and it is
further
ORDERED that defendants’ motion for partial summary judgment as to whether plaintiff
Kuplesky’s Sharing Ratio was properly reduced by 70% from 11.63% to 3.49% pursuant to
ee a
Section 5.5(a) of the Agreement is denied because issues of fact exist, to wit:
@ whether, pursuant to Section 5.5(a), the “effective date of [Kuplesky’s]
removal” from the Preservation board “occurred” in 2008 or 2009;
Gi) whether, pursuant to Section 5.5(a) and (b), Kuplesky left the “Deane
Interests” on December 15, 2008 because he was terminated (i.e.,
“fired’”’) or because he either resigned or “otherwise . . . ceased to be
actively engaged on a substantially full time basis with the Deane
Interests”; and
(iii) if Kuplesky was terminated, whether, pursuant to Section 5.5(b), the
“discussions” held with the government prior to the date of his
termination “resulted in” the December 2009 refinancing.
ENTER:
Shirley Werner Kornreich, J.S.C.
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(FILED: NEW YORK COUNTY CLERK 0871572014 02:48 PM INDEX NO. 650159/2010 | NYSCEF DOC. NO. 352 RECEIVED NYSCEF 08/15/2014 SUPREME COURT OF STATE OF NEW YORK COUNTY OF NEW YORK nec nnn nana nnn nana enn nne enc eween cence enenmenencnnennecsecnencnee= HARVEY RUDMAN and HAROLD KUPLESKY, on behalf of Each of Them Individually And On Behalf of Starrett City Preservation LLC, Index No, 650159/10 Derivatively, Plaintiffs, NOTICE OF SETTLEMENT -against- CAROL GRAM DEANE, THE ESTATE OF DISQUE D. DEANE by CAROL G. DEANE, AS TEMPORARY EXECUTRIX, SALT KETTLE LLC, ST. GERVAIS LLC, STARRETT CITY PRESERVATION LLC, DD SPRING CREEK LLC, SK SPRING CREEK. LLC, SPRING CREEK PLAZA LLC, DD SHOPPING CENTER LLC and SK SHOPPING CENTER LLC, Defendants. - jetenewnnnnnnnnnneenewenencenmencnnne X PLEASE TAKE NOTICE that a (proposed) Order, Declaration and Judgment on Motion for Partial Summary Judgment, of which the within is a true copy, will be presented for settlement to the Hon. Shirley Werner Kornreich, one of the judges of the within-named Court, at 60 Centre Street, IAS Part 54, Room 228, New York, New York on August 20, 2014, at 9:30 a.m. Dated: New York, New York August 15, 2014 WARNER PARTNERS, P.C. Attorneys for All Defendants (except Carol Gram Deane and Spring Creek Pla: By: CS ve. Kenneth E. Warner, Esq. 950 Third Avenue, 32nd Floor New York, New York 10022 (212) 593-8000 NEWM. & GREENBER‘ Attorne; pr D, GE ndant grol|Gram Deane By jv hard PAdGreen! Ly berg, sq 950 hird Avenue, 32nd Floor New York, New York 10022 (212) 308-7900 FOLEY & LARDNER LLP Attorneys for Defendant Spring Creek Plaza LLC By: Qo S| Peter N. Wang, Esq. Jonathan H. Friedman, Esq, 90 Park Avenue New York, New York 10166 (212) 682-7474 To: GOLENBOCK EISEMAN ASSOR BELL & PESKOE LLP Attorneys for Plaintiffs DavidJ. Eiseman, Esq Jacqueline G. Veit, Esq. David Shamshovich, Esq. 437 Madison Avenue, 35" Floor New York, New York 10022 (212) 907-7300 At IAS Part 54, of the Supreme Court of the State of New York, County of New York, at the Courthouse, 60 Centre Street, New York, New York, on the day of August, 2014. PRESENT: HON. SHIRLEY WERNER KORNREICH, Justice a HARVEY RUDMAN and HAROLD KUPLESKY, on behalf of Each of Them Individually And On Behalf of Starrett City Preservation LLC, Derivatively, Plaintiffs, Index No. 650159/10 -against- (PROPOSED) CAROL GRAM DEANE, THE ESTATE OF ORDER, DECLARATION DISQUE D. DEANE by CAROL G. DEANE, AND JUDGMENT AS TEMPORARY EXECUTRIX, SALT ON MOTION FOR PARTIAL KETTLE LLC, ST. GERVAIS LLC, STARRETT SUMMARY JUDGMENT CITY PRESERVATION LLC, DD SPRING CREEK LLC, SK SPRING CREEK LLC, SPRING CREEK PLAZA LLC, DD SHOPPING CENTER LLC and SK SHOPPING CENTER LLC, Defendants. ae ann nnn nnn nn nn nnn nnn nnn nnn nn nnn Defendants having moved pursuant to CPLR 3212 for partial summary judgment as to plaintiffs’ Second Amended Complaint, including the following relief: a. Dismissal of plaintiffs’ Ninth Cause of Action which seeks, inter alia, a judgment declaring that plaintiffs’ Sharing Ratio cannot be reduced pursuant to Section 3.3 of the Preservation Agreement (“the Agreement”) without plaintiffs sharing — at their full Sharing Ratios — in what plaintiffs have characterized as a “full distribution of the MGP/SKI’s share of the Refinancing Proceeds,” which according to plaintiffs includes, inter alia, an 18.9% share to plaintiffs in Starrett City Associates (“SCA”); A ruling that the Managing Member of Starrett City Preservation LLC (“Preservation”) was authorized by Section 4.2(iii) of the Agreement to award bonuses, as she did, to members of the office staff, including Robert Poll, Curt Deane and Iris Sutz, and to create a reserve for future office staff bonuses, as she did; A ruling that plaintiff Kuplesky’s Sharing Ratio was properly reduced by 70% pursuant to Section 5.5 of the Agreement, i.e., from 11.63% to 3.49%; and An order or judgment granting such other and further relief as the Court deems just and proper; and Defendants having submitted by electronic filing the following moving papers in support of their motion: (a) Notice of Motion, dated July 3, 2013; (b) Affirmation of Kenneth E. Warner, Esq., affirmed July 3, 2013, and the exhibits annexed thereto; (c) the parties’ Joint Statement of Undisputed Material Facts, dated July 3, 2013; and (d) Defendants’ Corrected Memorandum of Law in Support of Motion for Summary Judgment, dated July 3, 2013 (electronically filed on October 23, 2014); and Plaintiffs having opposed defendants’ motion for partial summary judgment and having submitted the following papers in opposition: (a) Corrected Affirmation of Jacqueline Veit, Esq., affirmed August 14, 2013, with exhibits annexed thereto (electronically filed on August 23, 2013); and (b) plaintiffs’ Corrected Memorandum of Law in Opposition to Defendants Motion for Partial Summary Judgment, dated August 14, 2013 (electronically filed on August 23, 2013); and Defendants having submitted the following reply papers in further support of said motion: (a) Corrected Reply Affirmation of Kenneth E. Warner, Esq., affirmed October 1, 2013, and the exhibits annexed thereto (electronically filed on October 3, 2013); and (b) Defendants’ Corrected Reply Memorandum of Law in Support of Motion for Partial Summary Judgment, dated October 1, 2013 (electronically filed on October 3, 2013); and The Court having heard oral argument (per Kenneth E. Warner, Esq., for defendants, and Jacqueline G. Veit, Esq., for plaintiffs) on December 10, 2013, and a transcript of the oral argument having been made and filed; and The Court, by Order dated March 27, 2014, having requested the parties to submit supplemental briefing and the parties having made such supplemental submissions by, respectively, letters from plaintiffs dated April 4, 2014 (signed by Jacqueline G. Veit, Esq.) and April 8, 2014 and April 11, 2014 (signed by David J. Eiseman, Esq.), and from defendants dated April 4, 2014, April 11, 2014 and April 15, 2014 (from counsel for all defendants); and The Court having read and filed all of the foregoing submissions and arguments, and due deliberation by the Court having been had thereon, and the Court having issued a written Decision, Order & Judgment dated July 28, 2014; it is hereby ORDERED AND ADJUDGED that defendants’ motion for partial summary judgment as to plaintiffs’ Second Amended Complaint is granted in part, and the First through Eighth Causes of Action in the Second Amended Complaint are dismissed to the extent they assert claims that the sums awarded as bonuses by Preservation’s Managing Member to Iris Sutz, Robert Poll and Curt Deane, and the sums set aside by Preservation’s Managing Member for future bonus payments, were unauthorized or otherwise improper under the Agreement; defendant Carol Deane, as Managing Member of Preservation, had the right, pursuant to Section 4.2 of the Agreement, to withhold from distribution to the Members up to a total of 15% of the cash SS payments it received from SCA from the December 2009 refinancing with Wells Fargo (the “Refinancing”), for the purpose of paying bonuses to the staff members, including Messrs. Curt Deane and Robert Poll and Ms. Sutz, and for creating a reserve fund from which to make future bonus payments to office staff of Preservation and its affiliated entities, including anyone working in the SCA offices on Starrett City business, regardless of the identity of their formal employer; and it is further ORDERED, ADJUDGED AND DECLARED that plaintiffs, as Members of Preservation, were only entitled to their shares of the “payments” (i.e., cash distributions) made to Preservation by SCA on behalf of SCA’s Managing General Partner and General Partner and, as a result, on plaintiffs’ Ninth Cause of Action, the Managing Member of Preservation has the power, pursuant to Section 3.3 of the Agreement, to reallocate the Sharing Ratios of any Member of Preservation, including reducing the Member’s Sharing Ratio to zero, when (i) SCA (or its successors) has distributed to Preservation all cash distributions it is required to make to its Managing General Partner and General Partner under Sections 3.02 and 3.03 of the SCA Partnership Agreement from the proceeds of the Refinancing; (ii) Preservation has distributed to its Members, in accordance with Section 4.2 of the Agreement, any and all cash distributions it received from SCA from the proceeds of the Refinancing; and (iii) such distributions by Preservation amount to $10 million or more, in the aggregate; and it is further ORDERED that the remaining causes of action are severed and shall continue; and it is further ORDERED that defendants’ motion for partial summary judgment as to whether plaintiff Kuplesky’s Sharing Ratio was properly reduced by 70% from 11.63% to 3.49% pursuant to ee a Section 5.5(a) of the Agreement is denied because issues of fact exist, to wit: @ whether, pursuant to Section 5.5(a), the “effective date of [Kuplesky’s] removal” from the Preservation board “occurred” in 2008 or 2009; Gi) whether, pursuant to Section 5.5(a) and (b), Kuplesky left the “Deane Interests” on December 15, 2008 because he was terminated (i.e., “fired’”’) or because he either resigned or “otherwise . . . ceased to be actively engaged on a substantially full time basis with the Deane Interests”; and (iii) if Kuplesky was terminated, whether, pursuant to Section 5.5(b), the “discussions” held with the government prior to the date of his termination “resulted in” the December 2009 refinancing. ENTER: Shirley Werner Kornreich, J.S.C.