enclosure - judiciary of new york

MSFMeister Seelig & Fein LLP

Stephen B. Meister

Partner

Direct (212) 655-3551Fax (646) [email protected]

November 15, 2018

VIA E-FILING AND FEDERAL EXPRESS

Justice Leonard Livote

Queens County Supreme Court, I.A.S. Part 33

Commercial Division Part A, Courtroom 122

88-11 Sutphin Boulevard

Jamaica, New York 11435

Re: Astoria Atlas Haldi::zs, LLC et al. v. Metic;:!it:: Pacific Properties, Inc. et al.,

Index No. 708932/2018

Dear Justice Livote:

As Your Honor will recall, we represent Plaintiffs in this derivative action.

I write in order to supplement the record before this Court. Mr. Jeffrey L. Nogee, counsel for the

Receiver, just e-filed a letter with this Court (Dkt. 269), dated today, that makes reference to a

letter that my firm e-filed earlier today with the Eastern District of New York, in the action

captioned Wells Fargo Bank, N.A. et ano. v. Acropolis Gardens Realty Corp., et al., Case No.

18-cv-5498-WFK-RLM (E.D.N.Y.).

I now enclose that letter, and its exhibits, for the Court's reference.

We appreciate Mr. Nogee bringing it to the Court's attention, and concur with his conclusion that

"any attemptedOSC"

by Acropolis Gardens Realty Corp. "to stay the shareholder meeting and

elections presently scheduled for this coming Monday, November19"

should be rejected.

Very truly yours,

Stephen B. Meister, Esq.

Enclosure

cc: All counsel of record (via NYSCEF)

125 Park Avenue, 7th Floor, New York, NY 10017 I Phone (212) 655-3500 I Fax (212) 655-3535 | meisterseelig.com

ENCLOSURE

Case 1:18-cv-05498-WFK-RLM Document 48 Filed 11/15/18 Page 1 of 3 PagelD #: 1750

MSFMeister Seelig & Fein LLP

Stephen B. Meister

Partner

Direct (212) 655-3551Fax (646) [email protected]

November 15, 2018

VIA E-MAIL

Steven R. Schlesinger, Esq.

Jeffrey D. Lebowitz, Esq.

Sophia A. Perna-Plank, Esq.

Jaspan Schlesinger LLP

300 Garden City Plaza, 5th Floor

Garden City, New York 11530

John S. Ciulla, Esq.

Peter J. Williams, Esq.

Rosenberg Calica & Birney LLP

100 Garden City Plaza, Suite 408


Re: Astoria Atlas Holdings, LLC et al. v. Metropolitañ Pacific Properties, Inc. et al.,Index No. 708932/2018 (the "State Action"), and

and

Wells Fargo Bank, N.A. et ano. v. Acropolis Gardens Realty Corp., et al.,

Case No. 18-ev-5498-WFK-RLM (the "Federal Action")

Dear Counsel:

We are counsel to plaintiffs in the State Action and to defendant Acropolis Associates LLC in the

Federal Action. We write in response to the letter from Jaspan Schlesinger LLP dated today, and

circulated by e-mail at 10:35 a.m., providing notice of Acropolis Garden Realty Corporation's

("AGRC") intention to present an Order to Show Cause tomorrow (the"Notice;"

Exh. A) in the

State Action seeking, for a third time, to enjoin theshareholders'

meeting scheduled for Monday.

We hereby demand that the Jaspan firm withdraw the Notice. If the Jaspan firm does not do so,

we will be seeking sanctions in the State Action pursuant to 22 NYCRR § 130-1.1(c). The Jaspan

firm has no basis to seek a third bite at the apple on relief it sought twice before and which was

twice denied in the State Action - first on October 2, 2018 and again on October 30, 2018.

We have included Messrs. Ciulla and Williams on this letter because, in light of the Notice, the

statements made by Mr. Ciulla to Chief Magistrate Judge Mann in the Federal Action were

misleading, and for that reason we have copied the Magistrate Judge hereon.

. 125 Park Avenue, 7th Floor, New York, NY 10017 | Phone (212) 655-3500 | Fax (212) 655-3535 ] meisterseelig.com


Letter to Mr. Schlesinger, et al.Page 2

November 15, 2018

On October 2nd, in the State Action, Justice Livote struck from AGRC's Order to Show Cause on

Motion Sequence No. 005 its request to have "Plaintiffs and their agents ... temporarily restrained

and enjoined from conducting any shareholder meetings of AGRC including the one noticed for

November 19, 2018, special meetings, soliciting proxy votes with respect to such meetings, or

otherwise interfering with the duties of AGRC's board of directors as set forth in Section II of

AGRC's by-laws..."(State Action Dkt. 172 at 4.) On the record, Justice Livote also made clear

that even if the November 19thmeeting is an "improperly called meeting, it has no force and effect

then, right, so why should I stay [it] -- it's just a bunch of people meeting atplaintiffs'

office, theycan call it a

shareholders'meeting if they want but it's not, according to your interpretation, it's

just a bunch of people gettingtogether."

(State Action Dkt. 186 at 15:3-8.)

. At the October 30thappearance before Justice Livote, counsel for the Receiver, Jeffrey L. Nogee,

requested that AGRC's Motion Sequence No. 005 be adjourned until November 27th, so the

Receiver could determine whether he would intervene in the State Action. AGRC protested before

Justice Livote that such an adjournment would put argument beyond the date of the scheduled

shareholder meeting on November 19th, but Justice Livote was clear - the meeting would go

forward, and argument would nevertheless be adjourned until the 27th

Just two days ago, on November 13th, in an appearance in the Federal Action before Chief

Magistrate Judge Mann, the imminentshareholders'

meeting was mentioned by Magistrate Judge

Mann. In response, Mr. Ciulla - counsel for AGRC in that action - did not dispute that the

shareholder meeting would go forward on November 19th.

THE COURT: And [AGRC's property]'s not going to be foreclosed upon before

the shareholder's meeting on Monday.

MR. CIULLA: No doubt, Your Honor, that's correct.

Exh. B at 21:18-20. After Magistrate Judge Mann announced her interpretation of the

Receivership Order as requiring the Federal Court's consent to a refinancing, and in response to a

request for that consent from Mr. Ciulla, Her Honor said she was not "inclined togive"

Judge

Kuntz a recommendation to grant AGRC's counsel's request for permission to refinance its current

mortgage "when you have meetings scheduled for Monday to vote on a newboard."

Id at 26:6-7.

It is no answer for Mr. Ciulla to say he was unaware of the Jaspan firm's intention to file the

Notice. Magistrate Judge Mann made clear that the Federal Court would not countenance AGRC's

federal counsel's purported ignorance of state counsel's actions (id. at 18:10-20):

THE COURT: ... I find it hard to believe that you [Mr. Ciulla] come to this

proceeding today and you can't give me a straight answer when I

ask about the status of the refinancing efforts. And it's no answer

to say that Mr. Schlesinger is not available.

That's what you told Justice Livote back in, whenever, and unless

he's being held incommunicado, I would think that you would have

that information before today.

Meister Seelig & Fein LLP

125 Park Avenue, 7th Floor, New York, NY 10017 | Phone (212) 655-3500 | Fax (212) 655-3535 I meisterseelig.com


Letter to Mr. Schlesinger, et al.Page 3

November 15, 2018

MR. CIULLA: Your Honor, unfortunately I do not, and I'm being as frank with you

as I can be. I am not in possession of that information.

Magistrate Judge Mann's written ruling dated November 13, 2018 - which we sent to the Jaspan

firm yesterday (but which is re-enclosed as Exh. C)- admonished AGRC and noted the risks of

a contempt citation if it"persist[s]"

in "obstructionistconduct"

that includes "failing tocooperate"

with the Receiver (id. at 2). Yet, AGRC is again doing just that by trampling on the adjoumment

Mr. Nogee specifically sought - to consider the Receiver's right to intervene (guaranteed by the

Federal Court's Receivership Order)- which Justice Livote granted, and worse, by tactically

failing to copy Mr. Nogee on the Notice even though the proposed application is being made in an

action in which the Receiver is right now assessing his right to intervene prior to the adjourned

State Action hearing on November 27th. Accordingly, we demand that AGRC not go forward

tomorrow, and confirm immediately that its Notice is withdrawn.

Hundreds of shareholders are anxious to vote at the first meeting in eight years. As Mr. Ciulla

noted in Federal Court, default interest is accruing and the shareholders are anxious to refinance

with an institutional loan. The "hardmoney"

loan the existing illegitimate board proposes carries

regular interest far greater than the default rate interest now accruing, so it is no answer to say that

the existing board wants to end default rate interest.

Our clients reserve the right to hold the Jaspan firm members in contempt in the State Action and

Mr. Ciulla and Mr. Williams in contempt in the Federal Action, should AGRC's threatened

application move forward (and even if it does not, as to other contemptuous conduct).

Very truly yours,

Stephen B. Meister, Esq.

Enclosures

Cc: Via e-filing: EDNY Chief Magistrate Judge Roanne L. Mann

Via e-mail: Jeffrey L. Nogee, Esq.

Randall T. Eng, Esq.

Pui Chi Cheng, Esq.

Benjamin Y. Kaufman, Esq. and Daniel Tepper, Esq.

Joseph C. DeJesu, Esq.

Dennis M. Rothman, Esq. and Ellen Nimaroff, Esq.

Aaron M. Barham, Esq.

Mark L. Cortegiano, Esq. and Diana J. Demirdjan, Esq.

Lord Chester So, Esq.

George G. Coffinas, Esq.

David L. Berkey. Esq. and Adam J. Berkey, Esq.

Jason A. Nagi, Esq. and Amy E. Hatch, Esq.

Meister Seelig & Fein LLP

125 Park Avenue, 7th Floor, New York, NY 10017 | Phone (212) 655-3500 I Fax (212) 655-3535 | meisterseelig.com

EXHIBIT A

Case 1:18-cv-05498-WFK-RLM Document 48-1 Filed 11/15/18 Page 1 of 3 PagelD #: 1753

JASPAN --- Sophia Perna-Plank

Associate

-- SCHLESINGER.3163938²"

[email protected]

A T T O R N E Y S A T L A W REPLY TO GARDEN CITY OFFICE

November 15, 2018

VIA E-MAIL VIA E-MAIL

Stephen B. Meister, Esq. Benjamin Y. Kaufman, Esq.

Michael B. Sloan, Esq. Daniel Tepper, Esq.

Christina Vernaschi, Esq. Wolf Haldenstein Adler Freeman & Herz, LLP

Meister Seelig & Fein LLP 270 Madison Avenue

125 Park Avenue,7th Floor New York, New York 10016

New York, New York 10017 kaufman@whafh-com

[email protected] repper@wha thcom

[email protected]

[email protected]

Pui Chi Cheng, Esq. Randall T. Eng, Esq.

Law Offices of Cheng & Associates PLLC Meyer, Suozzi, English & Klein, P.C.

27-28 Thomson Avenue, Suite 447 990 Steward Avenue, Suite 300

Long Island City, New York 11101 P.O. Box 9194

[email protected] Garden City, New York 11530-9194

[email protected] [email protected]

Re: Astoria Atlas Holdings, LLC, et al. v. Metropolitan Pacific Properties, Inc.,

e-t-al_

Index No.: 708932/2018

Dear Counselors:

As you know, this firm represents defendants, Debbie Vazquez, Umair Sheikh,

Antoine (Tony) Marzouka, Elizabeth Ziangus, C. Anthony Shippam, Robert Bass, Michael

Bass, Andrew Bader and Brian McNamara (collectively, the "Individual Defendants"), and

nominal defendant, Acropolis Gardens Realty Corp.("AGRC"

and, together with the

Individual Defendants, collectively, "Defendants") in the above-referenced action (the

"Action").

Notice is hereby provided to you that, pursuant to Uniform Court Rules, 22 NYCRR §

202.7, on Friday, November 16, 2018, at 10:00 a.m., this firm, on behalf of Defendants, will

present an Order to Show Cause seeking, in.te.t alia: (1) a temporary restraining order

barring your clients and AGRC's other shareholders from voting as to (a) board

membership or (b) matters which affect the management o r control of AGRC, pending the

SAP/DI340064v2/M075425/C0183600

300Gorden C ev Ph::za Gord.9 Cdy NY jIS "I 5 o . EC. -w 5:03 8281 ev.w.·.rcarilr scrr


JASPAN ...Notice Letter to

Plaintiffs'Counsel

November 15, 2018--

SCHLESINGER, Page 2

Court's determination as to injunctive and declaratory relief; (2) a judgement pursuant to

CPLR 3001 declaring whether the meeting presently scheduled for November 19, 2018 (the

"Meeting") is valid or invalid; and (3) should the Meeting be declared valid, an order

pursuant to CPLR 6301 enjoining AGRC's shareholders from voting as to (a) board membership

or (b) matters which affect the management or control of AGRC. pending the resolution of the

Action. or, in the alternative. enjoining the newly elected members of AGRC's board of directors

from assuming office or exercising any duties associated therewith. pending the resolution of the

Action, to the Commercial Division Motion Support Office of the Supreme Court, Queens

County, located at 88-11 Sutphin Boulevard, Room 140, Jamaica, New York 11432.

Very truly yours,

Sophia A. Perna- lank

SAP/sap

cc: Steven R. Schlesinger, Esq.

Jeffrey D. Lebowitz, Esq.

Jaspan Schlesinger LLP

300 Garden City Plaza,5th Floor


[email protected]

[email protected]

Joseph C. DeJesu, Esq.

Defesu Maio & Associates, P.C.

191New York Avenue

Huntington, New York 11743

[email protected]

[email protected]

Dennis M. Rothman, Esq.

Ellen Nimaroff, Esq.

Lester Schwab Katz & Dwyer, LLP

100 Wall Street

New York, New York 10005-3701

DROTHMAN@LSKDNYI,AW.com

[email protected]


JASPAN ... Notice Letter toPlaintiffs'

Counsel

November 15, 2018

Page 3

Aaron M. Barham, Esq.

Furman Kornfeld & Brennan LLP

61 Broadway, 26th Floor

New York, New York 10006

[email protected]

Mark L. Cortegiano, Esq.

Diana J. Demirdjan, Esq.

Law Office of Mark L. Cortegiano, Esq.

65-12 69th place

Middle Village, New York 11379

[email protected]

[email protected]

Lord Chester So, Esq.

Law Offices of Lord Chester So

521 Fifth Avenue,17th Floor


[email protected]

George G. Coffinas, Esq.

The Coffinas Law Firm, PLLC

37 Congers Road

New City, New York 10956

[email protected]

David L. Berkey, Esq.

Adam J. Berkey, Esq.

Gallet Dreyer & Berkey, LLP

845 Third Avenue


[email protected]

[email protected]

EXHIBIT B

UNITED STATES DISTRICT COURTEASTERN DISTRICT OF NEW YORK

WELLS FARGO BANK, NATIONAL * Case No. 18-CV-5498(WFK) ASSOCIATION, AS TRUSTEE, ON *BEHALF OF THE REGISTERED *HOLDERS OF CSAIL *2017-CX9 COMMERCIAL MORTGAGE *TRUST, COMMERCIAL MORTGAGE *PASS-THROUGH CERTIFICATES, *SERIES 2017-CX9, et al., *

**

Plaintiffs, * Brooklyn, New York* November 13, 2018

v. **

ACROPOLIS GARDENS REALTY *CORP., *

Defendant. **

* * * * * * * * * * * * * * * *

TRANSCRIPT OF CIVIL CAUSE FOR STATUS CONFERENCEBEFORE THE HONORABLE ROANNE L. MANN

UNITED STATES MAGISTRATE JUDGE

APPEARANCES:

For the Plaintiff: JASON A. NAGI, ESQ.Polsinelli Shughart PC600 Third Avenue42nd FloorNew York, NY 10016

For the Receiver: JEFFREY L. NOGEE, ESQ.Borah, Goldstein, Alstschulder, Nahins & Goidel, P.C.377 BroadwayNew York, NY 10013

Proceedings recorded by electronic sound recording,transcript produced by transcription service.

Fiore Reporting and Transcription Service, Inc.

4 Research Drive, Suite 402

Shelton, Connecticut 06484 (203)929-9992

Case 1:18-cv-05498-WFK-RLM Document 48-2 Filed 11/15/18 Page 1 of 34 PageID #: 1756

2

APPEARANCES Cont'd:

For Acropolis Associates: STEPHEN B. MEISTER, ESQ.MICHAEL BARRY SLOAN, ESQ.Meister Seelilg & Fein LLP125 Park Avenue7th FloorNew York, NY 10017

PUI CHI CHENG, ESQ.Law Offices of Cheng & Associates27-28 Thomson AvenueSuite 447Long Island City, NY 11101

BENJAMIN J. KAUFMAN, ESQ.Wolf Haldenstein Adler Freeman & Herz, LLP270 Madison AvenueNew York, NY 10016

For Acropolis Gardens JOHN S. CIULLA, ESQ.Realty Corp.: PETER WILLIAMS, ESQ.

Rosenberg Calica & Birney, LLP.100 Garden City PlazaSuite 408Garden City, NY 11530

Case 1:18-cv-05498-WFK-RLM Document 48-2 Filed 11/15/18 Page 2 of 34 PageID #: 1757


3

1 (Proceedings commenced at 3:07 p.m.)

2 THE CLERK: Civil cause for a status conference,

3 Wells Fargo Bank v. Acropolis Gardens Realty Corp.

4 Counsel, please state your appearances for the

5 record.

6 MR. NAGI: Jason Nagi, Your Honor, from Polsinelli

7 P.C., on behalf of the plaintiff.

8 MR. NOGEE: Jeffrey Nogee, Borah, Goldstein,

9 Altshulder, Nahins & Goidel, on behalf of the receiver.

10 MR. MEISTER: Good afternoon, Your Honor --

11 THE COURT: Wait one moment.

12 MR. SORISE: David Sorise, receiver.

13 THE COURT: Welcome.

14 MR. MEISTER: Good afternoon, Your Honor. Stephen

15 Meister. Meister Seelilg for Acropolis Associates, a

16 defendant.

17 MS. CHANG: Good afternoon, Your Honor. Pui Chi

18 Cheng from law offices of Chang and Associates, on behalf of

19 Acropolis Associates.

20 MR. SLOAN: Michael Sloan of Meister Seelilg & Fein

21 for Acropolis Associates.

22 MR. KAUFMAN: Good afternoon, Your Honor. Benjamin

23 Kaufman, Wolf Haldenstein Adler Freeman & Herz, also for

24 Acropolis Associates.

25 MR. CIULLA: Good afternoon, Your Honor. John

Fiore Reporting and Transcription Service, Inc. 203-929-9992


4

1 Ciulla, Rosenberg Calica & Birney, LLP., for defendant,

2 Acropolis Gardens Realty Corp.

3 MR. WILLIAMS: And, Your Honor, good afternoon.

4 Peter Williams, also with Rosenberg Calica & Birney for

5 Acropolis Gardens Realty Corp.

6 THE COURT: All right. Welcome to all of you.

7 Please be seated, and I encourage you to remain seated during

8 this proceeding so we'll be closer to the -- you'll be closer

9 to the microphones.

10 Before I hear any argument on the pending motion for

11 a TRO, I'd like to get some -- a status update. Let me hear

12 from Acrop counsel for Acropolis Gardens Realty. What is the

13 current status of the negotiations to refinance the mortgage?

14 MR. CIULLA: Your Honor, I have not been directly or

15 personally involved in that. Steven Schlesinger, from the law

16 firm of Jaspan Schlesinger LLP, has been involved. He

17 represents Acropolis Gardens Realty in the pending state court

18 actions, including the state derivative action as we've

19 defined it in our papers.

20 I am not entirely sure. I will say this. It's my

21 understanding that the --my client is ready to refinance. Of

22 course, if there's no TRO in place, but there's also an

23 impediment of a notice of pendency of action that was filed in

24 the state derivative action that has to be addressed before we

25 could proceed with any refinance.



5

1 THE COURT: That was going to be my next question,

2 and that is what, if anything, would your client be able to do

3 in light of that notice of pendency?

4 MR. CIULLA: My understanding, and I'm sure Mr.

5 Meister will correct me if I'm wrong, is that Justice Livote,

6 who is presiding over the state court derivative action, has

7 adjourned that, among other issues and matters to the end of

8 this month. Is that correct?

9 (No audible response.)

10 MR. CIULLA: But it's my understanding, Your Honor,

11 that certainly, if we could proceed with the refinancing, I

12 believe that counsel for my client in the state action would

13 seek to have Justice Livote cancel the lis pendens sooner

14 rather than later.

15 THE COURT: And let me ask either the receiver, or

16 counsel for the receiver, the status of the receiver's

17 undertakings pursuant to Judge Kuntz's order.

18 MR. NOGEE: Sure. We've secured the property

19 prospectively from the date of the order, both for receipts,

20 payables, and the physical property.

21 To date, we have not received many of the documents

22 necessary to look retrospectively, or to build up any sort of

23 arrears or financial statements prior to the date of the

24 receivership.

25 THE COURT: And why is that? Have you not been



6

1 getting cooperation?

2 MR. NOGEE: Correct. In addition --

3 THE COURT: From Acropolis Gardens?

4 MR. NOGEE: And their agent, Metropolitan, who is

5 the property manager.

6 MR. CIULLA: Your Honor, if I may?

7 THE COURT: No.

8 MR. CIULLA: Okay.

9 THE COURT: Not yet.

10 MR. CIULLA: Sorry.

11 THE COURT: And as I read Judge Kuntz's order, you

12 as receiver, have been empowered to retain a manager who would

13 be taking over from the current management, correct?

14 MR. NOGEE: That's correct. Pinnacle City Living

15 has been retained as property manager.

16 THE COURT: Is there anything you want to add?

17 MR. CIULLA: Sure. As it relates to the property

18 management, they've communicated with over 900 shareholders,

19 posted notices, dealt with numerous issues, including lack of

20 heat due to no oil, pest control issues, leaks from facades

21 and roof, as well as intercom issues.

22 And I have a interim report that I've prepared that

23 outlines the services that Pinnacle has started to provide the

24 property.

25 THE COURT: There's some -- some allegations have



7

1 been made by Acropolis Associates, the movant who brings us

2 here today, about the -- is it Metropolitan?

3 Is that the name of the prior manager, continuing to

4 take action in its capacity as manager? Is there anything you

5 want to opine, or information you want to give me with respect

6 to that?

7 MR. CIULLA: Yeah, sure. So, even after the order

8 was issued, there were communications that shareholders from

9 Metropolitan, specifically noting that payments and everything

10 would be as normal and no changes.

11 Additionally, agents on site, as well as some of the

12 venders. removed the notices of attornment that were posted

13 throughout the property.

14 We also had a notice posted at the property that was

15 not approved by me, but posted by Metropolitan called, Truth

16 About Our Co-op. And most recently, I've been notified by

17 shareholders that Metropolitan has been contacting them to

18 sign a proxy to act on their behalf.

19 Additionally, a mortgage broker was sent to the

20 property without prior notice to me, and tried to gain access

21 in order to bring a lender through the property.

22 I have also not received any funds, either in escrow

23 or delivered to the managing agent, Metropolitan, as noted by

24 some of the shareholders after the order was issued.

25 THE COURT: I'm sorry. Could you repeat that?



8

1 MR. CIULLA: Sure. I haven't received any funds,

2 whether they be funds that were escrowed prior to the order,

3 nor have I received any funds that were delivered directly to

4 Metropolitan, vis-a-vis Click-Pay, which is their online

5 payment system.

6 THE COURT: All right. I will now hear from counsel

7 for Acropolis Gardens.

8 MR. MEISTER: Thank you, Your Honor. Stephen

9 Meister.

10 You just said Acropolis Gardens. I think you meant

11 Acropolis Associates, Your Honor.

12 THE COURT: No, because I want to hear the response

13 --no, I'm sorry, you're right. Acropolis Associates.

14 MR. MEISTER: Okay, Your Honor. Thank you.

15 So just to touch upon the practicalities that were

16 discussed by counsel to Acropolis Gardens a moment ago, we

17 were before Justice Livote on a motion by Acropolis Gardens

18 Realty Corp., the co-op corporation, and the borrower and

19 principal defendant here, on an emergency motion to cancel the

20 lis pendens and to enjoin the forthcoming shareholder's

21 meeting for the 19th of this month.

22 Justice Livote --

23 THE COURT: When was that --

24 MR. MEISTER: October 18th, Your Honor. Sorry.

25 Sorry.



9

1 MS. CHANG: November the 2nd. Sorry. November.

2 MR. MEISTER: Sorry, I misspoke. November the 2nd,

3 Your Honor. Beg your pardon.

4 And at that time, Mr. Nogee, who is sitting, seated

5 next to Mr. Sorise, the receiver, as counsel for the receiver

6 appeared and asked Justice Livote for an adjournment so that

7 the receiver could consider whether to intervene in those

8 proceedings.

9 Justice Livote granted that application, and

10 although Mr. Schlesinger, counsel to AGRC, the Acropolis

11 Gardens in that proceeding, strenuously requested the

12 immediate cancellation of the lis pendens or notice of

13 pendency, it was not granted.

14 We are back before Justice Livote on, I believe

15 October 30th. Sorry, again I misspoke on a date. I

16 apologize. November 27th, on that application.

17 The lis pendens is associated with a claim, the

18 ninth cause of action in Acropolis Associate's amended

19 complaint in the state action, which in substance claims that

20 the existing board is conflicted and acting in a faithless way

21 and, therefore, should be adjudged and declared to be

22 unauthorized to engage in a mortgage refinancing transaction,

23 which is why that claim supports a notice of pendency, because

24 it would affect real title if the relief is granted.

25 So between that --



10

1 THE COURT: Which relief are you talking about now?

2 There have been lots of motions for relief, so which specific

3 relief are you talking about?

4 MR. MEISTER: In the ninth cause of action of

5 Acropolis Associates amended complaint, we seek --

6 THE COURT: All right.

7 MR. MEISTER: -- declarator -- in the state action.

8 We seek declaratory relief and associated injunctive relief

9 effectively barring the present board from engaging in a

10 mortgage refinancing transaction, based on the fact that that

11 judgment, if granted, would affect title to property as

12 contemplated by Section 6501 of the New York CPLR. We filed

13 the notice of pendency.

14 Consistent with what Mr. Ciulla just said, as

15 counsel to Acropolis Gardens, Mr. Schlesinger, counsel to

16 Acropolis Gardens in the state action, implored Justice Livote

17 to cancel the lis pendens right then and there because he said

18 we can't refinance with the lis pendens on.

19 For that reason, after those proceedings we didn't

20 seek any further relief, thinking it was not possible to

21 refinance in light of the pendency of the notice of pendency.

22 Subsequent thereto we received correspondence from

23 Mr. Nogee's office, not Mr. Nogee individually, but someone

24 else at his office, that said in substance that Mr. Mayo,

25 another attorney acting for Acropolis Gardens, had asked for a



11

1 payoff letter.

2 So given that the notice of pendency is not a court

3 order prohibiting a refinancing, although it certainly in my

4 opinion would be a severe impediment to a refinancing

5 transaction, as a matter of caution, given how devastating we

6 believe the refinancing transaction would be, made this

7 application.

8 But I'm trying to --

9 THE COURT: You made this application to the state

10 court as well, and it was denied.

11 MR. MEISTER: No, Your Honor, I don't think that's a

12 fair statement.

13 What happened is in the state court, because Wells

14 Fargo is not a party to the state court proceedings, we sought

15 a preliminary injunction, first -- sorry.

16 We sought a receiver which we abandoned when

17 subsequently Wells Fargo brought this diversity-based

18 foreclosure action and sought a receiver.

19 THE COURT: And you sought an injunction to prohibit

20 the refinancing from going through.

21 MR. MEISTER: No. No, Your Honor. What we sought,

22 I was about to get to that. We sought an injunction that if

23 the receiver application were denied, this was a temporary

24 receiver, not a mortgage receiver, and if a refinancing

25 occurred, that the excess refinancing proceeds be placed in



12

1 escrow. That was the application that we made to Justice

2 Livote.

3 That application is still pending and is, I believe

4 on for the 27th, along with Acropolis Garden's motion to

5 cancel the lis pendens.

6 And so we didn't believe we could, without Wells

7 Fargo present as a necessary party, outright seek to restrain

8 the refinancing. So we simply sought to protect the excess

9 refinancing proceeds.

10 They're trying to refinance for 52 million, and the

11 current loan balance is 45 million. So putting aside whatever

12 the cost of the transaction might be, there's upwards of $7

13 million of excess refinancing proceeds. The object of our

14 application was to secure those funds from diversion, okay?

15 Now, after we made that application, and I want to

16 give a complete answer, after we made that application, we

17 acquired, through discovery of related books and records

18 proceeding, I believe, a term sheet from a hard money lender

19 called Millbrook.

20 Based on that new evidence, we filed a reargument

21 motion before Justice Livote seeking to obtain the restraint;

22 the escrow related restraint that I just described.

23 Pending in that reargument motion, which was based

24 on the production of the Millbrook term sheet, which is 52

25 million at nine percent, we sought on a very short-term



13

1 temporary basis, pending the hearing on the reargument motion,

2 of a general restraint on refinancing.

3 So that's the full picture, Your Honor, on the state

4 court proceedings.

5 Just to wrap up here, our -- as I think Your Honor

6 knows, our contention is that there has been -- we made

7 serious allegations of financial improprieties amounting to

8 millions of dollars.

9 I understand from Mr. Sorise, the receiver, that no

10 records have been turned over, forgetting about funds for a

11 minute, by Mr. Osman.

12 We believe that the value of the property is a

13 significant multiple of the existing debt and there won't be

14 any problem securing an institutional loan at closer to the --

15 think it's about a 3.7 percent rate that's currently absent

16 default, payable to Wells Fargo, and there's no urgent need to

17 close a nine percent loan other than, in our view, Acropolis

18 Associate's view, Mr. Osman's desire and his board's desire to

19 essentially get rid of the receiver and avoid the forensic

20 examination that presumably would ensue and reveal the

21 financial improprieties.

22 So, obviously, the interest rate, the interest money

23 would be taken from something like 1.6 million to 4.6 million,

24 which would be devastating to the shareholders.

25 There actually is a shareholder in court today, Your



14

1 Honor, who did want to address the Court. Angie Shabbat (ph).

2 And so we're concerned that there may be, somehow, a

3 closing over the lis pendens. We have a shareholder's meeting

4 on October --sorry, November 19th, which is Monday.

5 THE COURT: That was going to be my next question.

6 MR. MEISTER: Right. There has not been a

7 shareholder's meeting at this co-op since 2010.

8 The bylaws essentially provide for one-year terms,

9 so there hasn't been a meeting or an election in eight years.

10 The shareholders are very desirous of having this election.

11 I think 78 of them have signed affidavits in strong support of

12 the election. The election is occurring at my offices on

13 Monday, November 19th. I've invited the receiver and his

14 counsel, Wells Fargo, everyone is welcome to attend.

15 And we expect there to be a new board in place as of

16 that evening of November 19th, and it would be a terrible

17 shame, in our view, if somehow a lender were to close a loan

18 that tripled the interest payable by the shareholders and

19 resulted in another $7 million in Mr. Osman's hands.

20 So that's --although, I do think it would be a

21 difficult thing to do, as Mr. Ciulla said, and as Mr.

22 Schlesinger said, which then sort of raises the question, why

23 is anyone fighting about this relief? Why not simply consent

24 to it.

25 We're going to be having a vote on the 19th, and



15

1 we're going to be in front of Judge Justice Livote on the

2 27th. And if Justice Livote is persuaded to cancel, then the

3 board can do what it would like to do.

4 And by the way, away from refinancing with an

5 institutional lender at significantly less than half the rate

6 of nine percent, I think there's a possibility that Wells

7 Fargo would be interested. I can't make any warrantees,

8 obviously, but I've been told we should have conversations

9 with Wells Fargo about that.

10 THE COURT: Well, let me hear from counsel for Wells

11 Fargo.

12 MR. NAGI: Your Honor, we really are trying hard to

13 not take a position in this dispute between shareholders and

14 board members, so one of the reasons we haven't filed anything

15 is because we don't really think that it's our place as the

16 lender to do that.

17 I would note that there is a side issue. There's

18 around $125,000 that's been held on, was provided to counsel,

19 I believe, at Jaspan Schlesinger, that is the lender's

20 collateral.

21 And my understanding is that they're talking with

22 receiver but the funds haven't been turned over and there has

23 been some discussion about it, and if that doesn't get handled

24 soon, one of us will be making a premotion conference letter

25 to Your Honor about turning over that amount in dispute.



16

1 And one other thing to say is that we did send a

2 payoff letter to borrower's counsel Friday afternoon, and I do

3 know that --my understanding is there's talk of the lender

4 has been approached about loan sales as well as refinancing,

5 so there seems to be activity, but I don't really know on

6 whose behalf and it's consistent with what the Court has heard

7 today.

8 THE COURT: Well, as I understand it, the current

9 board is seeking to refinance because they are -- on account

10 of the foreclosure action, they sought, apparently sought

11 before because they wanted to avoid a foreclosure action. Now

12 I presume they're going to say they want to avoid foreclosure.

13 Does Wells Fargo have any objection to staying the

14 case for a short period of time while these issues get sorted

15 out as to who is -- whether or not the board is going to be

16 replaced?

17 MR. NAGI: Wells Fargo has not particularly pushed

18 hard.

19 Aside from getting a receiver in place to stabilize

20 the property on moving to any conclusion, we haven't drafted -

21 - we've given time -- extensions of time for answers.

22 So we're not -- it's not particularly aggressively

23 pushing a resolution of this case, and it's been letting the

24 parties talk and try and work things out now that there's a

25 receiver in place, and you know, as lender it's concerned



17

1 about making sure that the property is not decreasing in

2 value, that its collateral is safe and it's being managed

3 properly.

4 It doesn't strike me that we would necessarily need

5 to have a formal stay in place in light of the way that things

6 are moving forward. But if Your Honor would like, I can

7 certainly talk to my client and ask them that question, to the

8 extent that there is some parameters that the Court would like

9 to have in place.

10 Primarily, what they're concerned about at the

11 moment was making sure the property is stabilized and that the

12 receiver can do what it needs to do in order to have

13 transparency, because we had issues from a transparency basis

14 and from a payment basis, up until the receiver was put in

15 place, Your Honor.

16 THE COURT: All right. I will hear from Acropolis

17 Gardens.

18 MR. CIULLA: Thank you, Your Honor.

19 The words speak for themselves and, unfortunately,

20 Mr. Meister is not correct in what he presented to Your Honor

21 a few minutes ago.

22 It's very clear from Exhibit A to our November 5

23 letter, where we attach two orders signed by Justice Livote,

24 that indeed Acropolis Associates sought a temporary

25 restraining order to prohibit and enjoin the refinancing of



18

1 the property.

2 And if Your Honor will indulge me, we've --

3 THE COURT: I won't, since I've read the

4 transcripts --

5 MR. CIULLA: Okay.

6 THE COURT: -- to those two proceedings.

7 MR. CIULLA: Okay. So then Your Honor knows that --

8 THE COURT: But let me ask you.

9 MR. CIULLA: Sure. Sure.

10 THE COURT: What is going to -- I find it hard to

11 believe that you come to this proceeding today and you can't

12 give me a straight answer when I ask about the status of the

13 refinancing efforts. And it's no answer to say that Mr.

14 Schlesinger is not available.

15 That's what you told Justice Livote back in,

16 whenever, and unless he's being held incommunicado, I would

17 think that you would have that information before today.

18 MR. CIULLA: Your Honor, unfortunately I do not, and

19 I'm being as frank with you as I can be. I am not in

20 possession of that information.

21 I do know that they are working very hard to obtain

22 refinancing, because as Mr. Meister mentions in his letter,

23 you have default interest accruing at $6,500 a day.

24 Now any delay hurts my client. Now, Mr. Meister has

25 said several times in his papers that perhaps we could obtain



19

1 refinancing from an institutional lender, or perhaps Wells

2 Fargo would be interested in staying on and working out the

3 situation. Yet, nothing has been done on that side to make

4 any of that happen.

5 The only efforts have been on my client's side to

6 obtain a refinance. Mr. Meister is shaking his head. If he

7 wants to inform me of those efforts that have been made, then

8 he can do that. But he talks about an institutional lender.

9 We haven't been given any proposal in that regard.

10 THE COURT: Well, has your -- you represent the

11 board. Before the receiver was in place was any effort made

12 to approach Wells Fargo about any kind of refinancing?

13 MR. CIULLA: I don't know, Your Honor. I don't

14 know. Perhaps Mr. Nogee can respond to that. I don't know.

15 But I know efforts are being made now, and I know

16 that Mr. Meister objects, and his client objects to the fact

17 that perhaps the interest rate is higher than he would like.

18 But no other efforts that we know about, certainly

19 no proposals that have been presented to either myself or Mr.

20 Schlesinger, or to the Board, about an institutional lender or

21 any potential to work out the situation with Wells Fargo has

22 been indicated to us. At this point, we do want to go forward

23 with the refinancing.

24 THE COURT: When?

25 MR. CIULLA: As soon as possible.



20

1 THE COURT: When is as soon as possible, when

2 there's going to be a shareholder's meeting and an election on

3 Monday?

4 Are you telling me that your client is intending to

5 move forward and close on a transaction before a shareholder's

6 meeting?

7 MR. CIULLA: Well, Your Honor, it seems that it's

8 unlikely that we could close before Monday.

9 Having said that, as I said to Your Honor a few

10 minutes ago, if in fact there were no restraints in place by

11 this court, and Mr. Schlesinger will make whatever application

12 he deems appropriate before Justice Livote, if the lis pendens

13 was canceled, then every effort would be made to refinance as

14 soon as possible. It may not be possible by next Monday.

15 That is correct, Your Honor.

16 I don't know. But maybe it is possible. I don't

17 know how quickly Mr. Schlesinger or Mr. Meister can go before

18 Justice Livote and revisit that issue. I don't know.

19 THE COURT: Now you say unless this court has a

20 restraint in place.

21 Isn't there already a restraint in place by virtue

22 of the order appointing the receiver on October 19th, signed

23 by Judge Kuntz?

24 MR. CIULLA: I don't believe the receiver is now in

25 charge of making decisions as to whether or not the mortgage



21

1 loan can be refinanced.

2 THE COURT: The last page of that document says, "In

3 order to promote judicial efficiency, all persons who receive

4 actful or constructive notice of this order are enjoined in

5 any way from disturbing the receivership assets or from

6 commencing any new proceedings that involve the receiver, the

7 receivership assets, or the property, unless such person or

8 persons first obtains the permission of the court."

9 MR. CIULLA: I don't think that covers a refinance,

10 Your Honor. I don't.

11 We're not affecting the receivership's assets.

12 We're not affecting the ability of the receiver to collect

13 rents, in this case, maintenance payments. What we're trying

14 to do, however, is get everybody out of a very bad situation.

15 There's a foreclosure action. This loan needs to be

16 refinanced. This property can't be foreclosed upon for many

17 of the reasons that Mr. Meister lists in his letter.

18 THE COURT: And it's not going to be foreclosed upon

19 before the shareholder's meeting on Monday.

20 MR. CIULLA: No doubt, Your Honor, that's correct.

21 But the real question, Your Honor, if I --

22 THE COURT: So shouldn't the decision be made after

23 the shareholders have an opportunity to decide who they want

24 making the decisions?

25 MR. CIULLA: Your Honor, perhaps, but by the same



22

1 token, when Acropolis Associates comes before this Court to,

2 in this situation to report and recommend as to whether or not

3 a TRO should be issued, the law should be followed.

4 And they haven't presented any claims that they're

5 likely to succeed on the merits, or raise sufficiently serious

6 questions. They have not established in any way, shape, or

7 form, irreparable harm if the property is refinanced at an

8 interest rate of nine percent, or something higher than a --

9 THE COURT: You're addressing another issue now.

10 I'm not addressing directly, their TRO. I am saying there is

11 already in place a restraint.

12 Whether they would be able to carry their burden or

13 not, I read this order as requiring that your client obtain

14 the permission of the court before any refinancing is done.

15 Let me ask the receiver or the receiver's counsel

16 how they read that provision.

17 MR. NOGEE: Yes. Thank you, Your Honor.

18 In view of the breadth of Judge Kuntz's order, which

19 Judge Livote even pointed out at our meeting back in beginning

20 of this month, and the conflicting arguments in the letters

21 from counsel between November 5th, November 13th, November

22 1st, it seems to me that the whole point of having a receiver

23 is to maintain the status quo, until those arguments get

24 sorted out.

25 So from the receiver's standpoint, I believe whether



23

1 there's an order of this court to further maintain the status

2 quo, or Your Honor simply directs the assembled group here,

3 that the appointing order already provides for the status quo

4 to be maintained, I think that really is the proper course of

5 action.

6 MR. CIULLA: Your Honor, if I may briefly?

7 There's no doubt the receiver has been appointed on

8 the property. There's no doubt that the receiver makes

9 decisions regarding the property. There's no doubt that the

10 receiver collects maintenance payments, pays expenses, and

11 oversees the financial situation regarding the property.

12 However, when it comes to whether or not a -- the

13 mortgage loan should be refinanced, then what you're saying,

14 Your Honor, is that the receiver is taking control of the

15 board of managers. That can't possibly be what the receiver's

16 role is here.

17 The receiver's role is with respect to the property.

18 This has no effect on the receiver's powers regarding the

19 property, except to the extent, Your Honor, that if the

20 mortgage loan is refinanced, there won't be any need for a

21 receiver because there won't be a foreclosure action anymore.

22 And isn't that where we want to end up? Who would

23 want to resist that? Certainly not bank's counsel. I don't

24 think the receiver would care.

25 THE COURT: The order appointing the receiver also



24

1 states at page 5, that effectively the borrower and all

2 persons acting under its direction, including Metropolitan

3 Pacific Properties Incorporated and any other manager of

4 property. are enjoined from in any matter, disturbing the

5 receiver's possession of the property or any other properties

6 that is the subject of the Court's order, and are prohibited

7 and restrained from one, disposing of dissipating this

8 handling, or misappropriating any of the property or such

9 other property; two, taking any actions that would directly or

10 indirectly have an adverse impact on the value of the

11 property.

12 MR. CIULLA: If I may address it briefly?

13 I understand what Your Honor has read from the

14 order. I don't see how refinancing the mortgage loan so that

15 there's no longer a foreclosure action, no longer a threat of

16 people losing the apartments where they live, has any impact

17 on that provision.

18 THE COURT: You are proposing to triple the interest

19 rate. You think that won't have any impact on adverse impact

20 on the value of the property?

21 MR. CIULLA: Your Honor, if there's a refinance,

22 there is no need for a receiver. There is no longer a

23 foreclosure action. The receiver hasn't been appointed for

24 all time. That would have -- that certainly would affect the

25 shareholders.



25

1 It certainly would affect the shareholders. But

2 we're talking about if this occurs, this is post-foreclosure

3 then. There's no longer a foreclosure action. Therefore, it

4 is no longer a receiver.

5 What you're saying, Your Honor, if I may say

6 respectfully, is that the receiver has been appointed and now

7 he's in control of the property forever? No, that's not the

8 case.

9 If an institutional lender, as Mr. Meister refers

10 to, comes in and refinances the mortgage loan, then that's not

11 allowed either? That affects the receiver's obligations and

12 duties under the order?

13 THE COURT: It's not a question of whether it would

14 be allowed. It's that such person or persons must first

15 obtain the permission of the court. That's what page 13 says.

16 MR. CIULLA: Your Honor, then perhaps this is a

17 forum to do that. They're asking for a TRO to restrain the

18 refinancing. We're asking Your Honor not to grant the TRO so

19 that we can go forward with the refinancing.

20 So I guess that's permission, then, because if you

21 don't grant the TRO then we can move forward with the

22 refinancing sooner rather than later.

23 THE COURT: I don't have to grant the TRO. First of

24 all, I don't have the authority to grant it. I can only

25 report and recommend. But what I'm saying is that even if



26

1 there were no motion for a TRO, as I read this order and as

2 Judge Kuntz reads it, because I've discussed it with him,

3 before you could go forward with the refinancing, you would

4 first have to obtain the permission of the Court.

5 You do not have it, nor am I empowered to give it to

6 you, nor am I inclined to give it to you when you have

7 meetings scheduled for Monday to vote on a new board.

8 And what I've heard, and you haven't addressed, is

9 that your clients have not been cooperating with the receiver.

10 And I think your client should understand that they do not

11 want to be before Judge Kuntz in connection with a contempt

12 proceeding.

13 MR. CIULLA: Could I speak briefly to that issue?

14 I did not find out until yesterday, I think late

15 afternoon, from the bank's counsel that there was a lack of

16 cooperation from Mr. Osman and Met Pac. I was aware --

17 THE COURT: But I assume you know from the letters

18 that have been submitted to the Court that the -- that your

19 clients have been taking over the responsibilities that were

20 specifically entrusted to the receivers, with respect --

21 MR. CIULLA: Your Honor, I'll speak to that --

22 THE COURT: -- to management.

23 MR. CIULLA: I'll speak to that briefly as well.

24 I am aware that the board of managers' president

25 sent out a notice that said just the opposite of what Your



27

1 Honor heard today.

2 Now, that does not mean that there may have been

3 other activities that I'm not aware of, that the receiver has

4 indicated today, but I can tell you that as soon as I spoke to

5 the president of the board, I made it very clear that she was

6 to send out a notification to all of the owners telling them

7 that all payments, all maintenance payments should be made to

8 the receiver, and that a notice of attornment would be going

9 out to the owners, telling them exactly where those payments

10 should be made.

11 I am not personally aware of anything else that's

12 occurred, but I can only tell Your Honor that I directed the

13 president of the board of managers to do that, and that was

14 done.

15 And I only found out last night that, in fact, Med

16 Pac was not being cooperative. I was aware of a couple of

17 emails that were sent by Mr. Sorise, who I've spoken to and

18 I've communicated with, where he asked for certain documents

19 and certain materials and information to be produced.

20 I was not aware that there was a lack of

21 cooperation. The first time I found out about that was

22 yesterday afternoon by Mr. Nogee's colleagues at his firm.

23 And since that time, I've communicated with both the

24 board and Med Pac's lawyer to, party needs to get on the ball

25 and do what they have to do to give the receiver everything



28

1 that he's requested.

2 MR. MEISTER: May I respond, Your Honor?

3 THE COURT: Yes.

4 MR. MEISTER: Thank you. I just want to make sure

5 the Court is clear on a few facts.

6 With regard to the statements that no other mortgage

7 refinancing efforts have been made, please understand, Your

8 Honor, that I represent a company that, together with related

9 companies, is perhaps the largest single shareholder, but is

10 not on the board and doesn't control the entity.

11 So I have reached out to participants in the

12 refinancing market, but I can't tell those participants yet,

13 that we speak for the corporation. That may change Monday

14 night. I believe it will.

15 But I want the Court to understand that the market

16 perception is simply this, the units on a co-op basis have

17 been trading for four to $500,000 a unit. It's above the

18 existing $45 million of debt. There are over 600 of those

19 units. That translates into a free and clear value of

20 somewhere around $300 million. The debt is 45 million.

21 I'm assured by market participants there are no

22 issues with an institutional refinancing on those values.

23 That's point one.

24 Point two is, there has been deliberate and active

25 resistance to the receiver. Mr. Osman directed security



29

1 guards after -- well after the appointment of the receiver, to

2 tear down signs or posters that had been put up informally by

3 shareholders saying there's a receiver, his name is Mr.

4 Sorise, here is his address. That's who you pay maintenance

5 to, because the notices to attorn had been removed or weren't

6 sent, or just weren't there. I think they were removed.

7 Those notices were torn down.

8 The Acropolis Gardens Realty Corp. has not paid

9 Wells Fargo since July. That's five months, Your Honor.

10 The payments come to about $330,000, including a tax

11 impound. That's $1.6 million. The maintenance is 580,000, or

12 thereabouts, for the entire project.

13 And historically, that has been sufficient to pay

14 Wells Fargo. That's how they were paid through June, and to

15 pay the other expenses.

16 There should be, if there hasn't been diversion of

17 funds, about a million-six in the corporate account. Now, I'm

18 not saying that's there. I am very concerned it's not there,

19 but that's what should be there. Not a penny, I asked Mr.

20 Sorise just before these proceedings started.

21 My understanding is not a penny has been turned over

22 by AGRC or Med Pac to the receiver, and no records have been

23 turned over; the banking records. So there's deliberate and

24 active resistance to the receiver.

25 And last point is, Your Honor, as I had mentioned a



30

1 moment ago, we had a temporary cooperative receiver, a motion

2 pending in state court before this diversity-based foreclosure

3 action was commenced.

4 We abandoned that application at the request of

5 Wells Fargo so as to yield priority to Wells Fargo, which

6 makes sense to us. They're the lender. They have an obvious

7 entitlement to a receiver under law and the mortgage

8 documents.

9 It was in that context, in my opinion, Your Honor,

10 that Judge Kuntz granted this broad based order with Acropolis

11 Associate's strong support based on allegations of financial

12 impropriety.

13 So it strikes me as a reasonable interpretation,

14 although we separately moved for relief, we actually discussed

15 internally whether we should simply ask for an interpretation

16 of this order.

17 And as Your Honor said, all it requires -- it's not

18 a bar, is that the court be -- that permission be sought from

19 the Court to a refinancing transaction.

20 MR. CIULLA: Just briefly, Your Honor.

21 Mr. Meister keeps on referring to a $45 million

22 figure.

23 We just received a payoff statement from Wells

24 Fargo's counsel, and the amount that's owed is $48,239,582.87.

25 I believe that's as of November 15th.



32

1 I have not seen the payoff statement because it's

2 not been given to me, but I understand that a significant part

3 of the difference between the 48 and the 45 is an alleged

4 prepayment penalty. I just wanted the Court to be aware that

5 that is my understanding.

6 THE COURT: Is the receiver going to be intervening

7 in the state court action?

8 MR. NOGEE: Your Honor, we haven't made that

9 decision yet. We will be responding with papers to take a

10 position on that, but as a formal intervener, we haven't made

11 that decision.

12 THE COURT: Because it seems to me that there's a

13 lot of duplication in this court of what's been transpiring in

14 state court, and it makes absolutely no sense for this court

15 to be hearing the same motions.

16 And with all due respect, I've read the transcripts

17 of the proceeding in state court and I think the motion for a

18 TRO for the same kind of relief, perhaps additional relief or

19 alternative relief, was sought in that case as is now being

20 sought here.

21 And I really question whether or not the dispute

22 between the co-defendants ought to be played out here with a

23 dozen lawyers appearing here on issues that have been before

24 the state court on multiple cases.

25 We're dealing here with a foreclosure action, and



33

1 all these other issues ought to be addressed in state court,

2 and not here, and there certainly is case law to suggest that

3 the cross claims that Acropolis Associates has asserted, that

4 the district court would be well within its discretion in

5 declining to exercise supplemental jurisdiction over those

6 issues here.

7 But meanwhile, we do have -- we do have a receiver

8 that's been appointed by Judge Kuntz. And as I said, as I

9 read that order, absent further order of the Court, this

10 refinancing cannot go through; whether it's refinancing by

11 Acropolis Gardens, or if there's -- and the current board, or

12 if there's a new board in place. It requires an order of the

13 court.

14 And I'm sure that Judge Kuntz would be delighted to

15 grant permission to refinancing on reasonable conditions that

16 would avoid foreclosure by Wells Fargo and that would conclude

17 this case.

18 Does anyone else want to be heard?

19 MR. MEISTER: Would it be possible for the

20 shareholder to address the Court briefly, Your Honor?

21 THE COURT: I don't know that it really-- I've

22 already-- I don't know that I need information from the

23 shareholder. It's not going to be a legal argument. I

24 understand the concerns that some shareholders have.

25 This is -- there are shareholder disputes, and those



34

1 ought to be played out at the shareholder meeting. And unless

2 and until -- and in the interim, Judge Kuntz's order precludes

3 any further refinancing, absent his approval.

4 MR. MEISTER: Understood. Thank you, Your Honor.

5 MR. CIULLA: Thank you, Your Honor.

6 MS. CHANG: Thank you, Your Honor.

7 THE COURT: Okay. Thank you.

8 (Proceedings concluded at 3:57 p.m.)

9 I, CHRISTINE FIORE, Certified Electronic Court Reporter

10 and Transcriber, certify that the foregoing is a correct

11 transcript from the official electronic sound recording of the

12 proceedings in the above-entitled matter.

13

14

15 November 14, 2018

16 Christine Fiore, CERT

17

18

19

2 0

21

22

23

24

25


EXHIBIT C

Casse11128eev06E|4998WWBKFRAM 0Doannaeiht44B63 RiMelttl11 17RELB8 122RhigMD##1TL90

ROANNE L. MANN DATE: h1/4#JAt A.er/3/ 2-©/ ÎUNITED STATES MAGISTRATE JUDGE START:½ ; () f)

END:

DOCKET NO: 18-ev-05498

CASE: Wells Fargo Bank, National Asseciation, as Trustee, on behalf of the registered holders

of CSAIL 2017-CX9 Comrñêrcial Mortgage Trust, Conunercial Mortgage Pass-Through

Certificates.Series 2017-CX9 et al v. Acropolis Gardens Realty Corp., et al

Assigned to: Judge

INITIAL CONFERENCE O OTHER/ORDER TO SHOW CAUSE

DISCOVERY CONFERENCE FINAL/PRETRIAL CONFERENCE

SETTLEMENT CONFERENCE TELEPHONE CONFERENCE

MOTION HEARING INFANT COMPROMISE HEARING

PLAINTIFF ATTORNEY

DEFENDANT ATTORNEY

DISCOVERY TO BE COMPLETED BY

NEXT CONFERENCE SCHEDULED FOR

JOINT PRE-TRIAL ORDER TO BE FILED VIA ECF BY

PL. TO SERVE DEF. BY: DEF. TO SERVE PL. BY:

RULINGS: PLEASE TYPE THE FOLLOWING ON DOCKET SHEET

Casse11128e - ODo,annestit44B63 RRdetti 1171EJ-B8 1T151

of

enclosure - judiciary of new york

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