exhibits to motion to reopen adversaries.a.to.i (3) (1).pdf

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STEWART OCCHIPINTI MAKOW LLP

Charles

A. Stewar t

I I I

Esq. CS-7099

1350 Broadway, Sui t e

220

New York, New York 10018

212

239-5500

ROSS

HARDIES

Helen D.

Cha itm an, E sq.

HC-4266

65 East 55th

St r e e t

New

York,

New York 10022

212 421-5555

UNITED STATES BANKRUPTCY COURT

SOUTHERN

DISTRICT

OF

NEW

YORK

-----------------------------------x

.

In re

WAYNE STURMAN BRUCE

D.

STURMAN

and HOWARD P. STURMAN

Debtors .

-----------------------------------x

DONNA STURMAN

Ind iv idua l ly a s a

B en ef ic ia ry o f the ESTATES

of

HENRY and

MURIEL STURMAN

and

as a

Par tne r

and /or Shareholder in

6-8

PELHAM PARKWAY CORP., CAULDWELL

MANAGEMENT CORP., ANTHONY

J

GRIFFEN

CORP.,

HP

HOWARD

CO.,

H.

DEVELOPMENT

CORP.,

WAYNE-

ADAM

CORP., CORNWALL

ESTATE /

INC.

/

YORKVILLE ASSOCIATES,

PELHAM

ASSOCIATES,

PELHAM

RAQUETBALL

AND HEALTH CLUB/

A.B.

YALE

CORP.,

ASTORIA TERMINAL

INC./ AND

SEA

BRIDGE

AND PIER

TERMINAL

CORP.,

P l a i n t i f f

-

aga ins t

-

CHASE MANHATTAN BANK

as

successor

in

i n t e r e s t

to

MANUFACTURERS

HANOVER

TRUST

COMPANY and

CHEMICAL

BANK

;

and

SFS

MANAGEMENT CORP.,

Defendants .

-----------------------------------x

Invo lun ta ry

Chapter

7

Case

Nos. 89 B11932 PCB)

89

B11933

PCB)

89

B11934

PCB)

J o in t ly

Adminis tered

Adversary Proceeding No.

98/9435A

RST MENDED

OMPL INT

Jury T r i a l Demanded

On

Damage Claims

W

e

281998

@

ROSS

H R leS



P la i n t i f f

Donna Sturman,

Ind iv idua l ly , as a Benef ic ia ry

of

the E sta te s

o f

Henry

and

Muriel

S tu rman an d

as

a

Par tne r

and/or Shareholde r in

6-8

Pelham

Parkway

Corp. ,

Cauldwel l

Management

Corp. ,

Anthony J .

Grif fen

Corp. ,

Howard

Co.,

H.

Development Corp. , Wayne-Adam

Corp. ,

Cornwall

E sta te , In c. ,

Yorkv il le As soc ia te s,

Pelham

Assoc ia tes , Pelham

Raquetbal l and

Heal th

Club,

A.B.

Yale Corp. ,

Astor ia

Terminal

Inc .

and Sea

Bridge and

Pie r

Terminal Corp. ,

by

her a t to rneys , Stewar t

Occhip in t i Makow, LLP and Ross Hardies , as and fo r her

complaint

aga ins t Chase Manhattan

Bank Chase ) as

successor

in

i n t e r e s t

to

Manufacturers Hanover

Trus t

Company ( MHT )

and

Chemical Bank Chemical

»

and

SFS

Management Corp. SFS )

c o l l e c t iv e ly

the defendants

are

re fe rre d to

here in

as the

Defendants o r

Lenders ) ,

a l l eges ,

upon

in fo rmat ion

and

be l i e f

as fo l lows:

1 . This

adversary

p ro ce ed in g s ee ks

to

equ i t ab ly

subord ina te

the

cla ims of each o f the Lenders to th e cla ims

submit ted

by Donna Sturman,

in her in d iv id u al c a pa ci ty and as a

par tne r , shareholder and benef i c i a ry of

the

Es t a t es o f

her

mother

and f a the r the E sta te s ), in

the

above ac t ion pursuan t to

Bankruptcy Code § 510 c) . Donna Sturman br ings

t h i s

ac t ion in

her

own name because

the

Trus tee

has cont inuous ly

fa i l ed to

p ro t e c t

her

i n t e r e s t s

as a

c red i t o r

o f

the

Debtors .

Any

demand

fo r the Trus tee

to

br ing t h i s ac t ion on beha lf o f

Ms.

Sturman

would be

f u t i l e .

2. Addi t iona l ly ,

Ms.

Sturman, in he r i nd iv idua l

2



capac i ty and

as a

pa r tne r ,

sha reho lde r

and bene f i c i a ry o f the

Es ta t e s , seeks to recover damages aga in s t each o f the Defendants

fo r a id ing and abe t t ing th e

breach

o f f iduc ia ry duty of the

Debtors ,

and

aga ins t

Chase

fo r

neg l igence .

PR LIMIN RY

ST T M NT

3.

On o r about August 4, 1989,

T

commenced

these

bankruptcy

cases

by f i l i ng three

separa te

invo lun ta ry

Chapter 7

pe t i t ions

in

t h i s

Court aga in s t

each o f the th re e b ro th ers of

Donna

Sturman: Wayne A.

S tu rm an , B ru ce D. Sturman

and Howard P.

Sturman co l lec t ive ly , th e B ro th ers ).

4.

T

knew t h a t

these

pe t i t i on s were

de fec t ive

as a

mat te r of law

and

in tended to ,

and

did , use th e in vo lu nta ry

pe t i t i on s as a c lub to exac t improper benef i t s fo r

i t s e l f

over

Donna

Sturman.

5.

P rio r to

the

f i l i ng

o f the invo lun ta ry

pe t i t i on s ,

Donna Sturm an, by M ilbank, Tweed,

Hadley

McCoy Milbank ) as

her

counsel ,

had commenced and been

prosecu t ing l i t i g a t i on s

aga in s t

the

Brothers

fo r

damages and

equ i t ab le

r e l i e f

to a s se r t

and p ro t e c t

he r

r i gh t s in

var ious pa r tne rsh ips

and corpora t ions ,

including

an

ac t ion

en t i t l e d

Donna

Sturman

But l e r v.

Howard

Sturman,

e t a l . , Index No.

15379/87 N.Y.

Sup. Ct.) the New

York Supreme

Court

Action )

In the

New

York Supreme

Court

Act ion, Donna

Sturman

a l l eged , among o the r

th ings ,

t h a t

she

had

an i n t e r e s t

in

v a ri ou s c o rp o ra tio n s

and

pa r tne rsh ips . She

fu r the r

a l leged

t h a t th e Brothers had

breached t h e i r f iduc ia ry

3



du t ie s to th e shareho lders

and

pa r tne rs o f th ese c orp ora t io ns and

par tnerships

by

among o th er th in g s,

th e

misapp l ica t ion of

corpora te and

pa r tne rsh ip

as s e t s

fo r t h e i r

own use and to th e

de t r iment

o f

Donna

Sturman.

6. In th e seve ra l yea r s p r i o r to August 4 1989 the

F i l ing Date ) ,

the

Bro thers , e i the r in d iv id u al ly o r as pa r tne rs

o r o f f i c e r s o f

th e

en t i t i e s t h a t they owned toge ther with

Donna

Sturman had

dive r t ed

corpora te ,

p ar tn ersh ip o r E sta te

asse ts to

themselves and

h ad b orrowed

ten s o f m il l io n s o f

do l l a r s

from

numerous sources , including

th e

Lenders wi thout

th e

knowledge o r

approval of Donna

Sturman. As

r e su l t

o f these borrowings the

Brothers encumbered t h e i r

personal as s e t s

as well as

asse t s

of

the

pa r tne rsh ips , corpora t ions

and

Esta tes

in which

Donna

Sturman

had

l ega l

o r eq uita ble

i n t e r e s t .

7. The vas t ma jo rity o f funds

borrowed by

th e

Brothers were no t in tended to and did not bene f i t th e

pa r tne rsh ips ,

corpora t ions and

Esta tes

in which Donna S tu rman had

an i n t e r e s t but ,

r a the r , were used to bene f i t th e B ro th ers

persona l ly .

8. Upon informat ion and be l i e f ,

p a r t of

the

Bro thers

scheme

was to d is s ip ate th e

cash

flow from th e

Es ta t e s ,

corpora t ions

and

pa r tne rsh ips , thereby causing Donna

Sturman

undue

f inanc ia l

hardsh ip

and

inh ib i t ing

her

ab i l i t y

to

vigorous ly

and e f f ec t i v e ly pro tec t her i n t e r e s t s .

9. The Brothers scheme to defraud Donna Sturman

was

fue led and

enabled

by

th e mil l ions of

do l l a r s t h a t

th e

Defendants



eager ly encouraged th e B ro th ers to borrow. The Defendants

wrongful ly

accepted as co l l a t e r a l

fo r t h e i r loans

a sse ts in which

Donna Sturman

had

an i n t e r e s t without her knowledge

o r

consent .

10.

The

Brothers

scheme

co l l apsed

with

th e

f i l i ng

of

the invo lun ta ry bankrup tc ies in August

1989.

However, MHT s

scheme cont inued

and

Donna

Sturman

has

been

l e f t to dea l with

th e

f inanc ia l d i sa s t e r caused by

th e

greed of h er b ro th ers

and th e

Defendants .

11.

The

i n s t an t

ac t ion

seeks r e l i e f and damages

aga in s t

th e

Defendants fo r

t h e i r

par t i c ipa t ion

in

th e B ro th ers

scheme to defraud and harm

Donna

S turm an an d th e Es ta t e s

corporat ions

and

pa r tne rsh ips

in which she had an i n t e r e s t .

N TURE OF THE TION

12.

T

so le ly fo r t

own

bene f i t and to gain an

inequi table advantage

over

Donna

Sturman

delayed

seeking

an order

fo r r e l i e f un t i l Apr i l 8, 1991, when, on consent of th e B ro th ers

t h i s Court en te red an

Order fo r

r e l i e f u nd er C hap te r

o f

th e

Bankruptcy

Code

in

each

Brothers case . Upon in fo rmat ion

and

be l i e f on Apr i l

28,

1991,

pursuan t to sec t ion 701(a)

(1)

o f

the

Bankruptcy

Code, 11 U.S.C.

§

701(a)

(1) ,

th e United S ta te s t r us te e

appoin ted Marc S tua r t Goldberg,

Esq.

( th e T ru stee ) as th e

in te rim c ha pte r t r u s t e e in one

o r more o f

the

Brothers

cases .

13.

This adversary proceeding i s

a

core proceeding

and,

t he re fo re th e

Court has j u r i sd i c t i on

pursuan t to

28 U.S.C.

§§ 157 and

1334.

14.

Venue i s proper

in

th is D is tr ic t and

in

t h i s Court



u n d e r 28 U . S . C . § 1 4 0 9 a ) .

F TS

1 5 .

Henr y

Stu rm an

d i e d

i n

1 9 7 3 .

Under

h is

L a s t

W i l l

and

Testament,

M u r i e l Stu rm an was b e q u e a t h e d

t h e

f r a c t i o n a l s h a r e

o f

th e r e s i d u a r y e s t a t e wh ich

e q u a l l e d

th e maximum e s t a t e t a x

m a r i t a l

d ed u ct io n a ll ow a b le i n

d e t e r m i n i n g f e d e r a l e s t a t e

t a x .

Th e

r e s i d u e

o f t h e

p r o p e r t y b o t h r e a l an d

p e r s o n a l

was

b e q u e a t h e d

t o

Donna

Stu rm an

and

t h e B r o t h e r s i n e q u a l

s h a r e s p e r

s t i r p e s .

1 6 . Upon i n f o r m a t i o n and b e l i e f

t h e

L a s t w i l l an d

T e s t a m e n t

o f

H en ry S tu rm an was

s u b m i t t e d

f o r p r o b a t e i n

S u r r o g a t e s C ou rt, W e st ch es te r County, i n 1 9 7 3 . Upon t h e d e a t h

o f

M u r i e l Stur man, Howard

Stu rm an

s u c c e e d e d h e r

a s an e x e c u t o r .

Upon

i n f o r m a t i o n an d b e l i e f t h e E st a t e

o f

Henr y

Stu rm an h a s n o t

b e e n

c l o s e d .

1 7 .

M u r i e l

Stu rm an

d i e d

i n 1 9 8 0 . Under

h e r L a s t W i l l

and

Testament,

a l l o f

M u r i e l

S t u r m a n s

p r o p e r t y

was

b e q u e a t h e d

t o

t e s t a m e n t a r y t r u s t e e s

t o

d i v i d e i n t o

f o u r e q ua l,

s e p a r a t e t r u s t s

f o r t h e b e n e f i t

o f

Donna Stu rm an an d e a c h

o f t h e

B r o t h e r s .

1 8 .

The

L a s t

w i l l

and

T e s t a m e n t o f M u r i e l

Stu rm an was

s u b m i t t e d

f o r p r o b a t e i n S u r r o g a t e s C o u rt , ew York County, i n

1980.

The

E s t a t e

o f

M u r i e l

Stu rm an

h a s

n o t

b e e n

c l o s e d .

1 9 . As a r e s u l t

o f e s t a t e

p l n n n ~ an d

f o l l o w i n g

th e

d e a t h s

o f

t h e i r p a r e n t s Donna Sturm an and

t h e

B r o t h e r s

became

g e n e r a l

p a r t n e r s and

s h a r e h o l d e r s i n

numerous Stu rm an f a m i l y



business en t i t i e s , including:

a) 6-8 Pelham Parkway

Corp.

6-8 Pelh am ),

a New

York

corpora t ion . The

Brothers

were of f ice r s and d i rec to rs of

6

8

Pelham.

Donna

Sturman

was

a

25

p e rc en t s ha re ho ld er

of

6-8

Pelham.

The

Brothers

owned

th e remaining shares

of

6-8 Pelham.

b) Cauldwell Management

Corp. Cauldwel l ) ,

a New

York corpora t ion . The Brothers

were

of f i c e r s and d i rec to rs of

Cauldwell . Donna

Sturman

e i t he r owned

o utr ig ht o r had

a

bene f i c i a l

i n t e re s t

in 25 percen t

of

the sha re s

of

s tock of

Cauldwell . The remaining shareholders

were

e i t he r the

Brothers

or the Esta te

of

Muriel Sturman.

c)

Anthony

J .

Griffen

Corp.

Gri f fen ) , a New

York

corpora t ion . The

Brothers

were

of f ice r s and

d i r ec t o r s

of

Gri f fen .

Donna

Sturman e i the r

owned

ou t r igh t

o r

had

a

benef ic ia l

i n t e r e s t in 25

percen t o f the

shares of s tock

o f G riffen .

The

remaining shareho lders

were

e i the r th e Brothers o r th e E sta te of

Muriel Sturman.

d)

Howard

o

HP

Howard ),

a New York

corpora t ion .

The Brothers

were

of f ice r s and d i rec to rs of

Howard.

Donna Sturman

was a 25 p er ce nt s ha re h ol de r of Howard.

The

Brothers

owned the remaining shares

of

Howard.

e) H.

Development

Corp. H.

Development

Corp . ) , a

New

York

corpora t ion .

The

Brothers

were

of f i c e r s

and

d i rec to rs

of H.

Developmen t Corp .

Donna

Sturman was

a

25

percent

shareho lder

of H.

Development

Corp. The Brothers owned the

remaining shares

of

H.

Development Corp .

7



f)

Wayne-Adam Corp. Wayne-Adam ),

a New

York

corpora t ion . The

Bro thers were o f f i c e r s and

d i rec to rs of

Wayne

Adam.

Donna Sturman was

a

25

p erc en t sh are ho ld er o f Wayne Adam.

The

Bro thers

owned

th e

remaining

shares o f

Wayne

Adam.

g) Cornwall

Es ta t e ,

Inc .

Cornwal l ) , a New

York

corpora t ion . The Brothers were o f f i c e r s and d i rec to rs o f

Cornwall . Donna Sturman was a

25

p erc en t sh are ho ld er o f

Cornwall . The Brothers owned th e

remaining

shares o f Cornwall .

h) Yo rkv il le A s so c ia te s

York vi l le ) , a New York

genera l

pa r tne rsh ip .

Donna Sturman was

a genera l

par tne r and had

a

25

pe rcen t

i n t e r e s t

in Yorkvi l le .

The Brothers were

genera l

pa r tne rs and owned th e

remaining

i n t e r e s t s in Yorkv i l l e .

i) Pelham Associa tes

Pelham ) , a New

York genera l

pa r tne rsh ip .

Donna

Sturman was a genera l

par tne r and

had a

25

percen t i n t e r e s t in

Pelham. The Brothers were

genera l pa r tne rs

and owned th e

remaining i n t e r e s t s in

Pelham.

j)

Pelham Racquetbal l Heal th Club, d /b /a Metrof i t

Ath le t i c

Club

o f Pelham Pelham Racquetba l l ) ,

a New

York

genera l pa r tne rsh ip . Donna

Sturman

was

a genera l

pa r tne r

and

had

a

25

percen t

i n t e r e s t

in Pelham

Racquetba l l . The Brothers were

genera l par tne r s

and

owned the

remaining

i n t e r e s t s in Pelham

Racquetbal l .

k)

A.B.

Yale

Corp.

( AB

Yale) ,

a New

York

corpora t ion . The

Bro thers

were o f f i c e r s and d i rec to rs o f

Yale . Donna Sturman

was a

25

p er ce n t s ha re ho ld er

of

Yale .

The Bro thers

owned the remaining shares

of

Yale.

8



l)

Astor ia Terminal

Inc .

Astor ia ) , a New York

corpora t ion .

The Brothers were o f f i c e r s and

d i rec to rs o f

Astor ia .

Donna

Sturman was a

25

p e rc e nt s ha re ho ld er

of

Astor ia .

The

Bro thers

owned

th e

remaining

shares o f

Astor i a .

m

Sea Bridge and Pie r 23 Terminal

Corp.

Sea

Bridge ) ,

a New

York

corpora t ion .

The Brothers were o f f i c e r s and

d i r ec to r s

o f Sea Bridge. Donna Sturman was a

25

pe rcen t

shareholder

o f Sea Bridge . The Bro thers owned th e

remaining

shares o f

Sea Bridge. (Col lec t ive ly ,

the

corpora t ions and

pa r tne rsh ips

i d en t i f i ed

in a) through m a re here ina f t e r

r e fe r red

to as the

Family

Enterpr i ses )

20.

From th e t ime of t h e i r paren t s death through the

commencement of the invo lun ta ry bankruptcy , one o r

more

o f the

Bro thers

exerc ised

exclus ive con t ro l over the Family Ente rp r i se s .

21.

Upon

in fo rmat ion and be l i e f , th e Brothers t rea ted

the

Family

Ente rp r i se s

as

a s ing le

bus iness and ignored th e

d i s t i n c t i on s between th e

v ar io u s c o rp o ra ti on s

and

p ar tn er sh ip s in

deal ings

with

themselves , commercial l enders and Donna Sturman.

22. The Brothers

caused the

Family

Ente rp r i se s

to

engage in a

number

o f

i n t e r -en t i t y

t r ansac t ions , th e purposes o f

which were to deny Donna Sturman her r i gh t fu l share

in the

pro f i t s o f

the Family

Ente rp r i se s .

23.

The

Bro thers

d id

n ot fo llow proc edu res

fo r

corporate governance requ i red under New York law, inc lud ing

holding meetings of shareho lders , g iv ing not ice o f

meetings

o f

shareho lders , main ta in ing

proper

c or po ra te r ec o rd s, sending

9



f inanc ia l s ta tements to shareho lders , o r main ta in ing u p d a t e d

s tock record b o o k s .

2 4 . The Brothers fo r t h e i r ow n persona l a c c o u n t s

e n g a g e d

in

t r ansac t ions

with

number

o f the

F a m i l y

Ente rp r i se s

o n o the r than a n arms- leng th ba s is , to th e

pre jud ice

a nd

det r iment o f th ese F a m i l y

Ente rp r i se s

a n d

in

pa r t i cu l a r , to

Donna

S t u r m a n .

2 5 . The Brothers

u s e d t h e i r con t ro l

over th e F a m i l y

Ente rp r i se s

to

obta in

excess ive an d

was tefu l r e m u n e r a t i o n fo r

t h e m s e l v e s to th e pre judice

a n d det r iment

o f Donna Stu rm an .

2 6 . Upon

in fo rmat ion an d

be l i e f , th e B ro th ers embarked

o n scheme

to

cove r t ly

t r an s fe r

the

as s e t s

o f

the

F a m i l y

Ente rp r i se s in

o rde r to

depr ive Donna Stu rm an o f va lua ble

proper ty i n t e r e s t s a n d to preven t

her from l ea rning

th e m a g n i t u d e

an d

de t a i l s o f the B ro the rs f inanc ia l

impropr i e t i e s involving

these en t i t i e s .

2 7.

As

pa r t

o f

t h i s

scheme th e Brothers c a u s e d the

F a m i l y

Ente rp r i se s , w i t h o u t Donna S t u r m a n s

knowl edge

o r

c o n s e n t

to

en t e r

i n to

loan

t r ansac t ions a n d e x c h a n g e s with ce r t a i n othe r

corpora t ions

a n d

pa r tne rsh ips

t h a t

the

B ro th er s a lo ne

con t ro l l ed

(he re inaf te r , th e B ro th ers Ente rp r i ses ) . In add i t ion , the

Brothers

u s e d

loans i m p r o p e r l y

obtained

b y

o r

from

F a m i l y

Ente rp r i se s to i nve s t in

the Bro thers

Ente rp r i se s .

2 8 . Upon in fo rmat ion an d

be l i e f , th e

Bro the r s

Ente rp r i se s

inc luded i n t e r e s t s

in the

f o l l o w i n g corpora t ions an d

pa r tne rsh ips :

10



a) Lawrence

S t a t i o n Racquetbal l

Health Club

d / b / a

M e t r o f i t

A t h l e t i c Club

o f

Lawrence;

b)

Glen

Cove Racquetbal l

Health

Club,

I n c .

a

New

York

c o r p o r a t i o n ;

c)

Overseas Funding

Corp.

Overseas

Funding ) ,

a New York


d) Grand Real ty Corp. , a New York c o r p o r a t i o n ;

e)

H u n t e r s

Run

A s s o c i a t e s

a New

York

p a r t n e r s h i p ;

f)

M H

Const ruct ion

Co.,

a New

York c o r p o r a t i o n ;

g)

S c a r s d a l e Road Real ty A s s o c i a t e s

Scarsdale

Road ),

a New

York


h) M e d i a t r i c s I n c .

a New

York


i) Park

Terminal Corp. , a New


j)

PDA Management

Co.,

a New


k) B S Racquet Club A s s o c i a t e s

a New

York

g e n e r a l p a r t n e r s h i p ;

1) The Sturman

Group, L t d . a New York

c o r p o r a t i o n ; and

m)

The Sturman Organiza t ion ,

L t d . a New

York

c o r p o r a t i o n .

29. In a d d i t i o n by v i r t u e of t h e i r ownership

o f

s h a r e s

of

p u b l i c l y t r a d e d

s t o c k t h e

Brothers

each

owned

a

s u b s t a n t i a l i n t e r e s t

i n The Cooper

Companies,

Inc . Cooper

Companies ) .

30. The

improper loans

and

exchanges

were

s e l f - d e a l i n g



t r a n s a c t i o n s

made

t o b en ef i t

t h e B r o th e r s , t h e B r o t h e r s

E n t e r p r i s e s o r o t h e r e n t i t i e s c o n t r o l l e d

b y

them an d i n wh ich

Donna Stu rm an h a d no

r e c o g n i z e d

o r l e g a l i n t e r e s t . Many n o t

m o s t

o f t h e s e

i m p r o p e r

l o a n s

a n d

e x c h a n g e s

w e r e

n e v e r

r e p a i d t o

th e F a m i l y E n t e r p r i s e s

an d

r e m a i n o u t s t a n d i n g .

3 1 .

F o r

ex am p le

t h e

f o l l o w i n g

r e p r e s e n t u n p a i d an d

o u t s t a n d i n g

l o a n s

owi ng t o

Y o r k v i l l e a s o f O c t o b e r

3 1

1988 b y

t h r e e o f

th e

B r o t h e r s E n t e r p r i s e s :

O v e r s e a s

M

Gr and

R e a l t y

6 7 8 4 9 1 . 1 3

8 0 5 0 0 . 0 0

4 2 5 4 0 0 . 0 0

1 1 8 4 3 9 1 . 1 3

3 2 . The f o l l o w i n g r e p r e s e n t u n p a i d an d


l o a n s

owi ng t o Pelham

a s

o f

O c t o b e r

3 1

1988 b y tw o

o f

t h e

B r o t h e r s E n t e r p r i s e s :

O v e r s e a s

M

2 0 0 2 0 0 . 0 0

8 0 0 0 . 0 0

2 0 8 2 0 0 . 0 0 .

3 3 .

The

i m p r o p e r

l o a n s

c o n s t i t u t e d

schem e

o r

d e v i c e

b y wh ich t h e B ro th er s d i v e r t e d a s s e t s o f t h e F a m i l y E n t e r p r i s e s

t o e n t i t i e s i n w h i c h

t h e y

woul d

p e r s o n a l l y b e n e f i t , i n c l u d i n g

s t o c k

i n

t h e

C o op er C om pa nie s a l l t o Donna S t u r m a n s d e t r i m e n t .

By

d i v e r t i n g f u n d s

an d

a s s e t s

from

t h e

F a m i l y

E n t e r p ri s e s i n

wh ich Donna Stu rm an

h a d

l e g a l a n d

known

i n t e r e s t )

t o

e n t i t i e s

i n w h i c h

Donna

Stu rm an

h a d

no s h a r e h o l d e r o r p a r t ne rs hi p

i n t e r e s t , t h e B ro th er s

b r e a c h e d

t h e i r f i d u c i a r y

d u t i e s ,

w a s t e d

th e a s s e t s

o f

th e F a m i l y E n t e r p r i s e s an d

d e p r i v e d

Donna Stu rm an

o f p o t e n t i a l d i s t r i b u t i o n s a n d p r o f i t s

from

t h e F a m i l y

E n t e r p r i s e s .

12



34. I n connect ion w i t h t h e i r scheme t o

d iv e r t a s s e ts

o f t h e

Family E n t e r p r i s e s

t o

e n t i t i e s

i n which t h e y alone

would

p e r s o n a l l y

b e n e f i t

t h e

B r o t h e r s

borrowed m i l l i o n s o f

d o l l a r s

from

a

number

o f

banks

and

i n d i v i d u a l s

i n c l u d i n g

each

Defendant .

The

v a s t

m a j o r i t y

o f th e s e borrowings

were

i n v e s t e d

by

t h e

B r o t h e r s e i t h e r i n

th e

B r o t h e r s

E n t e r p r i s e s

o r i n

s t o c k

o f

Cooper Companies, a t t h e

expense

o f and t o t h e d e t r i m e n t o f Donna

Sturman.

35. Upon i n f o r m a t i o n and

b e l i e f t h e Lenders

a i d e d and

a b e t t e d th e

B r o t h e r s i n t h e i r scheme t o

c o v e r t l y

d i v e r t

t h e

a s s e t s

o f

t h e Family


and, i n

f a c t p r o f i t e d

by

t

36. W ithout

t h e

a c t i v e

and

w i l l i n g p a r t i c i p a t i o n o f

t h e

Lenders ,

t h e

B r o t h e r s

would have

been

unable

t o t r a n s f e r

th e

a s s e t s

o f t h e

Family


t o e i t h e r t h e B r o t h e r s

p er so n a ll y o r t o e n t i t i e s i n cl u di n g th e B r o th er s E n t e r p r i s e s

c o n t r o l l e d by them t o t h e p re ju d i c e

and

d e t r i m e n t o f Donna

Sturman.

DONN STURM N S

CL IMS THE RST

NEW YORK SUPREME

COURT

CTION

37.

I n ay 1987, Donna

Sturman

commenced t h e F i r s t ew

York Sup reme

Cour t

Action .

I n t h e

F i r s t ew York Supreme Court

Action , Donna

Sturman a l l e g e d among o t h e r t h i n g s f a c t s

e s t a b l i s h i n g

t h a t

t h e

B r o t h e r s

had:

a d i s r e g a r d e d

i n d i v i d u a l

c o r p o r a t e

s t r u c t u r e s

and f re e ly t ra n s f e r re d funds among

t h e

Family


and

B r o t h e r s E n t e r p r i s e s

i n v io la ti o n

o f

ew York

c o r p o r a t e

and

13



pa r tne rsh ip

law;

b

engaged

in f raudu len t t r ansac t ions among the

Family

Enterpr i ses

and Brothers

Enterpr i ses

fo r t h e i r own

personal

accounts

to

the

pre jud ice

and

det r iment

of

Donna

Sturman;

c caused th e p ro pe rty

o f

Family

Enterpr i ses

to

waste

and

deprec ia te

in value as

a

consequence

of t h e i r

f raudulent

and

co l lus ive scheme to d ive r t

as se t s by means

of

improper

loans

and

depr ived th e Family Enterpr i ses of

oppor tun i t i e s

to

i nves t t h e i r

asse ts in more p ro f i t ab l e

investments , to th e pre jud ice and det r iment

of Donna

Sturman;

d

i n t en t i ona l l y and wi l fu l l y

ignored procedures

o f c orp ora te

governance

requ i red

under

ew York

law;

e

i n t en t iona l ly and

wi l fu l l y

ignored ew

York

par tnership

law and th e p rov is ions of th e

pa r tne rsh ip

agreements

respec t ing Sturman

pa r tne rsh ips ;

and

f

i n t en t i ona l l y

and

wi l fu l l y

excluded Donna

Sturman from

th e

governance, management, a f f a i r s

and

r i gh t fu l

share

of the

p ro f i t s

o f

th e Family Enterpr i ses in

o rde r

to obta in

excess ive

remunera t ion

fo r

themselves .

THE

BROTHERS FRAUD CONSPIRACY TO DEFRAUD

AND

BREACH OF FIDU I RY DUTIES REGARDING THE MURIEL STURMAN ESTATE

38.

n

January

6, 1988, a f t e r

end less de lays

in

th e

a dm i nis tr at io n o f the Muriel Sturman Es ta t e caused

by

i t s

execu tors

and

admin i s t ra to r s

inc lud ing Howard Sturman in h is

dua l capac i ty of execu tor

and

bene f i c i a ry

Donna Sturman

f i l ed a

14



pe t i t i on fo r

compulsory account ing

in

th e

Sur rog a te s Court ,

County of

ew

York, in an ac t ion

en t i t l ed Es ta t e

of

Muriel

Sturman (the

Su r roga te s Cour t Act ion ) .

th e

Sur roga t e s s

Court

Action ,

Ms.

Sturman

reques ted ,

among o the r th ings ,

an

order

d i r ec t i ng

th e e xe cu to rs

and t r u s t e e s

under

th e

Murie l

Sturman

Es ta t e

to

s e t t l e

an

account

o f

the

p ro ce ed in gs a s

execu to rs

and

t rus t ees

from

th e d a te o f Murie l Sturman s

dea th

up to and

inc lud ing the da te o f the pe t i t i on

(the Account ) , and to make

f u l l

and

complete account o f a l l

proceedings and

t r ansac t ions o f

f ive

Family

Ente rp r i se s .

39.

The Account revealed t h a t th e Murie l Sturman

Es ta t e

owed s ig n if ic a n t d i st ri b u ti o n s to Donna

S tu rm an an d

es t ab l i shed

t h a t

th e res iduary i n t e r e s t o f Donna

Sturman

in the

Murie l Sturman

Es ta t e was

f a r g rea t e r than t h a t s e t fo r th in

the

Account . The Account

a lso revea led

t h a t th e

admin i s t ra t ion

of

th e

Murie l Sturman Account by

th e

execu tors

and

t r u s t e e s had

d i s t o r t ed th e

re spec t ive

i n t e r e s t o f

the

Brothers and Donna

Sturman

in th e balance o f the

asse t s

remaining in th e Muriel

Sturman Es ta te .

40.

th e

Surroga tes

Court proceeding , Donna

Sturman,

through

her a t to rneys , claimed

t h a t : ( i)

the

amounts

d is tr ib u te d to the Brothers had been gross ly

unders ta ted

in the

Account;

( i i )

each

o f the

Brothers

had

f raudulent ly

derived

s i gn i f i c an t hidden bene f i t s from th e

Murie l

Sturman

Es ta t e which

had

to be i d en t i f i ed and r e -charac te r ized

as

d i s t r i bu t i on s ,

and

( i i i )

co r r ec t s ta teme nt o f th e di sp ropor t iona te share o f the

15



d i s t r ibu t ions

made

to the

Brothers would

r e su l t

in

Donna

Sturman

being en t i t l e d to th e

g rea t e s t

share ,

not a l l , o f

the

remaining

as s e t s

of the

Murie l Sturman

Es ta t e , including,

but

no t

l im ite d to ,

th e

share of

the

Murie l

Sturman

Es ta t e in

Yorkvi l le .

T

M T LO NS

41. T f i l ed

proofs

of

claim in

each of th e B ro thers

cases in an

amount

in excess o f 20 ,000,000.00.

42. In

each

o f i t s invo lun ta ry pe t i t i on s , T

a l leged

t h a t

ts

c la ims were

not sub jec t to

bona

f ide dispute

and t h a t

each

o f

the Brothers

had

fewer

than

12

en t i t i e s

t h a t

held

a

claim

aga ins t him t h a t was not

con t ingen t as to l i a b i l i t y

o r su bjec t

to

bona

f id e d is pu te .

Upon in fo rmat ion

and

be l i e f ,

T knew

o r

should have known t h a t these s ta tements were

inaccura te .

43. Upon in fo rmat ion

and

be l i e f , based

on

MHT s proofs

of cla im,

the

Bro the r s

a l leged indebtedness

to

T re l a t ed

to

ten loans

t h a t

T

had

made

to

the

B ro th ers ov er

the

per iod

August

1986

to June 1988.

44. Upon in fo rmat ion and be l i e f , based on MHT s proofs

of cla im, s ix

o f the loans ,

t o t a l i ng

3 ,151,000,

were unsecured

loans t h a t

were made

to

one

o r more of th e B ro th er s.

Upon

in fo rmat ion

and

be l i e f ,

the

Brothers used

the

subs t an t i a l

por t ion

of the

proceeds

o f these

loans

to

acqu i re

s tock

in

Cooper

Companies o r

to fund margin c a l l s on

such

s tock .

45. Upon in fo rmat ion and be l i e f , based on MHT s proofs

of

cla im,

two

of

the loans ,

t o t a l i ng

17,092,000,

were to

Development Corp. ,

a

Family

Ente rp r i se .

Upon in fo rmat ion and

16



b e l i e f t h e B r o t h e r s used t h e proceeds o f t h e s e c o r p o r a te l o a n s

t o a c q u i r e

s t o c k

i n Cooper Companies, fund

margin c a l l s

i n such

s t o c k o r

repay

p er so na l l o an s.

46.

Upon

i n f o r m a t i o n

and

b e l i e f

based

on

MHT s

p r o o f s

o f cla im, two

o f th e lo a n s

t o t a l i n g

3 ,950,000,

were t o

S c a r s d a l e

Road

and Overseas Funding, two

o f

t h e

B r o t h e r s


47.

Upon i n f o r m a t i o n and

b e l i e f a t t h e t ime loaned

funds

t o

t h e

B r o t h e r s

T

knew

o r

should have known t h a t

t h e

B r o t h e r s d i d n o t f ollow p ro ce du re s f o r

c o r p o r a t e

governance

r e q u i r e d under ew York law w i t h

r e s p e c t

t o

t h e Family


and t h a t t h e l o a n s proceeds were n o t b e in g used f o r

p r o p e r p a r t n e r s h i p

o r

c o r p o r a t e

purposes .

48. Upon i n f o r m a t i o n

and

b e l i e f

a t t h e t ime loaned

funds t o t h e B ro th er s T knew o r should have known t h a t t h e

B r o t h e r s had

v i r t u a l l y no

a s s e t s

a p a r t

from

th e

l i q u i d a t i o n v a l u e

o f

Cooper Company

s t o c k

(then i n margin

accounts)

o r

t h e i r

i n t e r e s t s

i n

Family E n te rp ri s es o r B r o t h e r s E n t e r p r i s e s .

TH 98

MHT LO NS

49.


b e l i e f T

became

concerned

t h a t

t h e

B r o t h e r s would not be

a b l e

t o repay

t h e i r unsecured

p e r s o n a l

o b l i g a t i o n s i n o r

about

t h e

Spring

o f

1987.

50. Upon i n f o r m a t i o n and b e l i e f

i n

an e f f o r t t o l i m i t

t h e b a n k s f i n a n c i a l exposure , T under took t o

make a

l o a n o f

3 ,600,000 t o H. Development

Corp.

i n ay

1987,

t h e proceeds o f



which were

t o

be

used,

as

T

knew, t o repay

t h e B r o th er s

p e r s o n a l o b l i g a t i o n s .

Development Corp.

provided

T w i t h

a

promissory n o t e

and s e c u ri t y i n

th e form o f a

mortgage on

Development

C o r p . s

r e a l

p r o p e r t y

known

as M a rin ers

P o i n t e .

51. On o r about

J u l y

16,

1987,

T loaned 1 .65

m i l l i o n

t o

S c a r s d a l e Road, a B r o t h e r s E n t e r p r i s e

i n t o which

th e

B r o t h e r s had improper ly

d i v e r t e d funds

from


in clu di n g th e e n t i t i e s named

a s d efe nd an ts

i n t h e F i r s t

New

York

Supreme Court

Action.


and

b e l i e f

i n

t h e

f a l l o f 1987,

th e

B r o t h e r s asked T t o make

a

l o a n o f 6

m i l l i o n

t o fund

margin

c a l l s a t L.F. R o t h s c h i l d i n

connect ion

w i t h th e B ro th er s

purchase o f Cooper Company s t o c k .

53.


b e l i e f T was u n w i l l i n g

t o

make

any

more unsecured

p e r s o n a l

l o a n s t o t h e B r o t h e r s because

was concerned

about t h e i r

a b i l i t y t o repay

such

l o a n s .

Accordingly , T

i n s i s t e d

on a t r a n s a c t i o n

whereby

t h e l o a n would

be t o

a Family E n t e r p r i s e

o r be

s e c u r e d

by an a s s e t owned by

a

Family E n t e r p r i s e such

as

H.

Developmen t Corp . o r Y o r k v i l l e

A s s o c i a t e s .

E v e n t u a l l y T induced

Development Corp. t o

borrow

th e

funds

d e s p i t e t h e

f a c t t h a t w i t h MHT s knowledge

and

c o n s e n t

th e

B r o t h e r s would be u s i n g

t h e

proceeds o f t h e l o a n

f o r

p e r s o n a l

purposes having

no

b en e f i t t o

H.

Development Corp.

54. Upon i n f o r m a t i o n and b e l i e f on October 22, 1987,

T

caused H.

Developmen t Co rp .

t o

borrow

13,492,000

and provide

T with

a

n o t e i n t h e amount o f 13,492,000

and

a

second

18



mortgage on th e Mariners Pointe

proper ty .

55.

Upon informat ion

and be l i e f

o f the 13,492,000

loaned, T knew o r should

have

known t h a t 6

mil l ion

o f

the

proceeds

would

be used

to

fund

th e B ro th ers

margin

c a l l s a t

L.F.

Rothsch i ld and t h a t th e

remaining

proceeds

o f

the loans would be

used to

repay in

f u l l

personal

loans t h a t

prev ious ly had

been

extended by T to th e Brothers on an unsecured bas i s .

56. Donna Sturman d id no t have knowledge

o f o r

consen t

to

the

loans made by

T to H.

Development Corp.

Nei ther

T

nor

the Brot he rs a dv is ed Donna

Sturman about

the MHT s loans to H.

Development Corp. p r i o r to

the

making

o f these

loans and

the

mortgaging o f

the

Mariners

Poin te proper ty .

Had

Donna Sturman

known about

these

loans she would

have

not approved them and, in

fac t would

have

objec ted .

57. Upon informat ion

and

be l i e f a t th e

t ime

made

loans

to

H.

Development Corp. , T

knew

o r should have

known t h a t

Donna

Sturman

had an i n t e r e s t

in

the

Family

Ente rp r i se s

inc lud ing

Yorkvi l le and

Deve lopment Corp .


and

be l i e f a t th e t ime

made

loans

to H. Development Corp. , T

knew

o r should have

known

o f

Donna Sturman s a l lega t ions

in

the

F i r s t

w

York Sup reme Court

Act ion .

TH 9

MHT LO NS

59.

Upon informat ion

and be l i e f in

Apri l

1988, T

loaned 667,000

to each

o f the

Brothers

th e

proceeds

of

which

19



were to

be

used to cover personal expenses . As

s ecu r i t y

fo r

these

loans MHT demanded

and

rece ived

an ass ignment o f

the

s tock

c e r t i f i c a t e s

represent ing

each

o f the B ro thers 5 i n t e r e s t in

Wayne-Adam

and a

negat ive

pledge

on

th e

re al e sta te

proper ty

owned by Wayne-Adam (a b u il di ng lo ca te d a t 16 East 18th S t ree t

ew York, ew

York), as well as

th e B ro th ers

consen t

to

provide

MHT with a

mortgage on

th e c orp ora te p ro pe rty th e loan was not

repa id

in

f u l l on o r before September 30, 1988.

60.

At the

t ime t rece ived th e

Bro thers ass ignments

of th e ir in te re sts in

Wayne-Adam

and

t h e i r

agreement to mortgage

the

Wayne-Adam

proper ty

MHT knew

o r


Donna

Sturman had

a t le a s t a 5 i n t e r e s t in Wayne Adam.

61.

Upon in fo rmat ion and

be l i e f

a t the t ime

t made

the A pril 1988

loans MHT knew o r

should

have known

of

Donna

Sturman s a l lega t ions in

the ew

York Supreme Court Act ion ,

pa r t i cu l a r l y s ince Donna

S turman h ad

served

a

subpoena on MHT

on

March 2,

1988

t h a t sought var ious ca tegor ies of

documen ts and

not iced a

depos i t ion

of MHT fo r March

22,

1988.

62.

Donna

Sturman

d id not

have

knowledge of

o r

consent

to

the

Apr i l 1988 loans made by MHT to

th e B ro th ers .

Nei the r MHT

nor

the

Brot he rs a dv is ed Donna Sturman about th e

Apr i l

1988 loans

p r i o r to th e making of

these

loans .

Had

Donna

Sturman

known

about

th ese lo an s

she

would have

not

approved

them

and,

in fac t

would

have

objec ted .

63.

n

o r about June 17,

1988,

MHT loaned 2 ,375,101

to Overseas Funding,

a Brothers

Enterp r i se in to which

the

20



Brothers had improper ly diver ted

funds

from

Family

Ente rp r i se s

including

th e

e n t i t i e s

named a s d efe nd an ts in th e F i r s t

ew York

Supreme

Court

Act ion .

MHT S CTIVITIES

IN 989

64. Upon in fo rmat ion and b e l i e f in

July

o r August

1989 T became concerned

t h a t th e Brothers would not

be ab le

to

repay th e lo an s In

addi t ion

Donna

Sturman was

moving

in

the

ew

Y ork Su prem e Court Act ion to compel

T

to produce

add i t iona l

documents r e l a t i n g to th e

Apr i l

1988 loans to th e Brothers

invo lv ing

Wayne Adam.

Moreover

T was

longstanding

and

impor tant

c l i e n t of Milbank the

law

firm t h a t represen ted Donna

Sturman in

th e F i r s t ew Y ork S up rem e

Court

Act ion.

Upon

in fo rmat ion and b e l i e f as

r e s u l t of t c lose r e la t ionsh ip

with

Milbank T

was aware

t h a t

t faced

s i g n i f i c a n t

p o ten t i a l

exposure

as

r e s u l t

of i t s neg l igen t g r os sl y r ec k le ss lending

p r ac t i c e s

with regard to th e B ro th er s

65. Upon

in fo rmat ion

and b e l i e f in

th e Spring o r

Summer

of 1989

T

concluded t h a t

th e

Brothers should be placed

in to an invo lun ta ry bankruptcy in o rd e r to l i m i t t f i n a n c i a l

exposure and h a l t

add i t iona l

discovery proceedings in

the

F i r s t

ew Y ork S upre me

Court

Act ion.

66. Upon in fo rmat ion and b e l i e f p r i o r to t f i l i ng

of

the

invo lun ta ry

bankruptcy

proceedings

aga ins t

th e Brothers

T sought

appra i sa l s

to

determine the

l iqu ida t ion value

o f

var ious Family Ente rp r i se s

67. Upon

in fo rmat ion and

b e l i e f

a t the t ime of the



f i l i n g o f th e

p e t i t i o n s ,

M T knew o r should

have known

t h a t t h e

f i l i n g s were t e c h n i c a l l y

d e f i c i e n t

under t h e Bankruptcy Rules ,

but f i l e d t h e i n v o lu n ta ry p e t i t i o n s t o advantage i t s e l f t o a t

t h e

expense

o f

Donna

Sturman.

DONN

STURM N S

SUMMONSES WITH NOTICE

68. In

June 1992,

Donna

Sturman

f i l e d and s e r v e d

summonses w i t h n o t i c e i n two New York Supreme Court a c t i o n s

i n

which she

sought e q u i t a b l e

r e l i e f and damages

a g a i n s t

M T

In

t h e s e summonses, Donna

Sturman

a l l e g e d t h a t t h e

l o a n s made

t o

Development Corp. were f o r

o t h e r

t h a n

c o r p o r a t e

purposes , t h a t

t h e s e

loans were

n o t a u t h o r i z e d o r consented t o by a l l o f

t h e

s h a r e h o l d e r s o f

Development Corp. , t h a t

M T

knew t h a t

th e

loans were

f o r o t h e r th an c or po ra te p u rp o se s, and t h a t M T

knew

o r

should have known t h a t not

a l l

o f

t h e

s h a r e h o l d e r s o f

M T

had

given t h e i r

consent

t o t h e s e

l o a n s .

69.

In

h e r summonses

w i t h n o t i c e , Donna

Sturman s t a t e d

t h a t she

sought damages

i n t h e amount

o f

17.1

m i l l i o n

p l u s

i n t e r e s t a g a i n s t M T

on

th e grounds

t h a t

i t s

conduct c o n s t i t u t e d :

i)

a

convers ion

o f th e

a s s e t s

o f Development Corp. ;

i i )

a i d i n g , a b e t t i n g

and

p a r t i c i p a t i n g

i n

f r a u d u l e n t

misconduct ,

c o r p o r a t e waste

and m i s a p p r o p r i a t i o n

o f

a s s e t s by

t h e Debtors , a t

th e

t ime

t h e y

were

members

o f

t h e

Board

o f

D i r e c t o r s

o f

Development Corp. ; i i i ) a i d i n g

and

a b e t t i n g t h e B r o t h e r s i n

t h e i r

breaches

o f f i d u c i a r y d u t i e s ; iv) p a r t i c i p a t i n g w i t h th e

B r o t h e r s i n t h e

f r a u d u l e n t

conveyance o f

Development

C o r p . s

22



a s se t s ; and (v) f raudu len t ly inducing

Development Corp. to

en te r in to th e T

loan t r ansac t ions .

THE

CHEMIC L

NK

LO NS

70. Upon informat ion and be l i e f

based on

the p roo fs

of

cla ims

submit ted by

Chemical ,

th e Brothers were a l leged ly

indeb ted to

Chemical in an amount in

excess

o f

5 ,000,000.00

a t

th e t ime of the f i l i ng

of

the

involunta ry

cases .


and

be l i e f

based on Chemica l s

proofs of

cla im,

the

Brothe rs

a l l eged indeb tedness to Chemical

re l a t ed to

seven

unsecured

loans t ha t Chemical had made

to

th e

Brothers

over

th e p er io d J uly 1989

to

October 1989.

72. Upon

informat ion

and be l i e f based on

Chemica l s

proofs of

cla im, each

o f the

Chemical loans was an unsecured

p erso na l lo an

to one S turman bro the r guaranteed by one o r both

o f

the o ther

Sturman

bro ther s .

73.

Upon informat ion and be l i e f

the

Brothers

used

the

subs tan t i a l por t ion

of

th e

proceeds

o f these

loans fo r persona l

reasons

inc luding

th e

acqu is i t ion

of

s tock in

Cooper

Companies

and

th e

funding

of

margin ca l l s .

74. Upon informat ion and be l i e f

a t th e

t ime

loaned

funds to

th e Brothers Chemical

knew

o r

should

have known t h a t

th e Brothers

d id

n ot fo llow p roc ed ures

fo r corpora te

governance

requi red

under New York law with re spec t to

th e

Family

Ente rp r i se s and t ha t

th e proceeds

of loans

between such

corpora t ions were no t being used fo r p ro pe r c o rp o ra te purposes .

23



75.

Upon information and b e l i e f a t t h e t ime

made

p e r s o n a l

unsecured l o a n s t o

t h e B ro th er s

Chemical knew

o r

should have

known

t h a t t h e

B r o t h e r s had

v i r t u a l l y no

a s s e t s

a p a r t

from

t h e

l i q u i d a t i o n

v a l u e

of

Cooper

Company

s t o c k

(then

i n

margin accounts) o r

t h e i r i n t e r e s t s i n Family E n te rp ri s es o r

B r o t h e r s E n t e r p r i s e s .


and b e l i e f a t t h e t ime

made

l o a n s t o

t h e B r o th er s

Chemical knew

o r


Donna sturman had an

i n t e r e s t i n t h e

Family


77. Upon information and b e l i e f

a t th e

t ime

made

loans

t o t he B ro th er s

Chemical

knew

o r should

have

known

of

Donna

Sturman s a l l e g a t i o n s

i n th e

F i r s t

ew

York Supreme

Court

Action.

78.

Upon information and

b e l i e f

Chemical cont inued

t o

loan funds t o th e B r o t h e r s a f t e r t h e f i l i n g o f t h e i n v o l u n t a r y

bankruptcy.

TH LO N

79. Upon

i n f o r m a t i o n and b e l i e f

based

on t h e

p r o o f s

o f

c la im s ubm it te d

i n t h e

bankruptcy proceedings , t h e B r o t h e r s

were

a l l e g e d l y

i n d e b t e d t o

SFS i n an

amount

i n

excess o f

11,000,000.00 a t

t h e

t ime o f t h e f i l i n g o f th e i n v o l u n t a r y

c a s e s .

80. Upon information and b e l i e f based on

SFS s

p r o o f s

of cla im, t h e B ro th er s

a l l e g e d

indebtedness

r e l a t e d t o a s i n g l e

loan t h a t S S made t o

th e

B r o t h e r s which

was

secured

by an

24



unrecorded mortgage on proper ty

t h a t

th e

Brothers owned

with

Donna

Sturman

a t 86th S t r ee t in

New

York City ( the 86th S t r ee t

Property )

81.

Upon

in fo rmat ion

and

be l i e f ,

a t

th e

t ime

made

the

11

mil l ion

loan to

th e

Brothers , SFS knew

o r

should

have

known t h a t th e B ro th ers had few personal as s e t s

apa r t

from

the

l iqu ida t ion

value o f Cooper Company s tock (then

in

margin

accounts)

and i n t e r e s t in

Family Ente rp r i se s

o r Bro the r s

Ente rp r i se s .

82. The

Brothers , Donna Sturman and

Muriel

Sturman had

t r ans fe r red

t h e i r

bene f i c i a l i n t e r e s t

in

th e 86th S t ree t Proper ty

to

Yorkvi l le , a

Sturman Family

Ente rp r i se .

83.

Upon

in fo rmat ion

and

be l i e f , th e Brothers used the

m a jo ri ty o f

th e proceeds

o f

the

SFS

loan

fo r persona l

reasons ,

in clu din g th e acqu is i t ion of s tock

in

Cooper

Companies

and

to

fund margin ca l l s .

84. Upon in fo rmat ion

and

be l i e f ,

a t

th e t ime

made

the

loan to

the

Brothers ,

SFS

knew

o r

should have known

o f

Donna

Sturman's a lle ga tio ns in

th e F i r s t New

York Sup reme

Court

Action.

85. Upon in fo rmat ion and

be l i e f ,

SFS's agreement to

loan funds to th e Brothers was pa r t o f a

scheme by

a

p r inc ipa l

o f

SFS, Moses Marx ( Marx ) , to

obta in

con t ro l over o r concess ions

from

The

Cooper Compan ie s.

86. According

to an a f f i d av i t

submit ted

by Bruce

Sturman in an ac t ion en t i t l ed SFS Management Co. , L.P. v . Bruce

Sturman, Index No. 47947/90 (N.Y. Sup. Ct. (the SFS

25



Col lec t ion

Proceeding )

(a) Bru ce S tu rman was a member and

co-chairman

of

the

Board

of D ire cto rs of The Coope r Compani es , and the

l a r ge s t

ind iv idua l

common

shareho lder of

The

Cooper Companies.

(b)

Marx,

in

addi t ion

to being a pa r tne r

of

SFS,

was a

s ha re ho ld er o f The Cooper Companies

and one

o f the

pr inc ipa l s ha re ho ld er s o f Cooper Development

Co.

( Development )

and

Cooper Life Sciences ( Sciences ) , whose

sole

as s e t s

cons i s t ed

o f 100 mil l ion

of

pre fe r red

s tock of

The

Cooper

Companies.

(c)

Pr i o r

to November 8, 1988, th e da te

o f the

Note, Development and Sciences had consented to a

sa le o f

ce r t a in

as se t s

o f The

Cooper

Companies.

Development and Sciences l a t e r

resc inded t h e i r

consent in

order to fo rce The Cooper Companies to

redeem

t h e i r

p re f e r r ed

s tock.

(d) A

Delaware

s t a t e cour t determined t h a t

Development 's and Sciences

consents

to the sa le of

as s e t s

were

va l id

and

binding.

(e)

In November,

1988,

th e Brothers needed

re f inanc ing in

orde r

to take t h e i r Cooper Company

s tock

out

o f

margin accounts . Boston

Safe

Deposi t Trus t Company in t roduced

the

Brothers to SFS, which was

represen ted

to be a

Swiss-based

group

of

I s r a e l i

i nve s t o r s .

The

Brothers

were

advised

t h a t

SFS

was w il l in g to make an unsecured

loan

to

the

Brothers

in th e

amount o f 11.5

mil l ion .

(f) Because

Bruce

Sturman

would not do

bus iness

26



with Marx o r any

en t i t y

in which

he

had an i n t e r e s t ,

SFS

de l ibe r a t e ly

concealed from B ruce S tu rm an th e f ac t t h a t

Marx

was

a

pa r tne r in

SFS

and

t h a t he

was

d i r e c t ly involved

in th e

placement

and

nego t i a t ion

o f

th e

SFS

Note.

g) During

th e

c los ing , Moses Krausz,

an

assoc ia t e of

Marx , re commended t h a t th e B ro th ers

place t h e i r

Cooper

Company s tock in custody

accounts

a t Bank Ju l ius Baer.

Krausz s ta te d th at th e B ro th ers

would

be be t t e r o ff keeping t h e i r

shares o f

s tock

with a bank

r a the r

than leav ing the shares with a

brokerage

house where

they had ex is t ing margin

accounts . The

Brothers

l a t e r placed

t h e i r Cooper Company

s tock in

margin

accounts a t

Bank Ju l i u s

Baer.

h) In th e course of

a

dispu te with

over

th e

terms

of

th e

Note,

B ruce S tu rm an

withdrew h is s tock from Bank

Ju l ius Baer . Krausz l a t e r ca l l ed Bruce Sturman and to ld him

he

should

put th e Cooper Company

s tock

back.with Bank

Ju l i u s

Baer .

i Krausz

to ld

B ruce S tu rm an : emade th e loan

so t h a t

we could con t ro l th e s tock . e d i dn t make th e loan to

be in th e re a l e sta te bus iness .

87. Upon in fo rmat ion and be l i e f , each of th e

a l lega t ions made by Bruce Sturman

in

th e

SFS

Col lec t ion

Proceeding

i s accura te .

AS

AND

FOR FIRST CAUSE OF TION

(Equi table Subordinat ion - - All

Defendants)

88.

P l a i n t i f f

repea t s and

rea l l eges

each and

every

a l l ega t i on con ta ined in paragraphs though 87 above as

27



f u ll y s e t

f o r t h

h e r e i n .

89. The B r o t h e r s i n

- t h e i r p o s i t i o n s as o f f i c e r s

and

d i r e c t o r s and g e n e r a l

p a r t n e r s

o f t h e Family E n t e r p r i s e s owed

f i d u c i a r y

d u t i e s t o Donna

Sturman.

90.

Upon

i n f o r m a t i o n and b e l i e f a s p a r t o f t h e i r

c r e d i t

review p r o c e s s

each o f

t h e Defendants knew o r should have

known

t h a t

t h e

B r o t h e r s

had v i r t u a l l y no a s s e t s

a p a r t

from t h e

l i q u i d a t i o n v a l u e o f

Cooper Company

s t o c k

then

i n margin

accounts and p r o p e r t y

owned by


o r B r o t h e r s

E n t e r p r i s e s ; and each

o f

t h e

Defendants

expected

t h a t i n t h e

even t t h e B r o t h e r s

were

unable t o meet t h e i r p e r s o n a l

o b l i g a t i o n s

t h a t would

seek t o

l i q ui d at e a ss e ts i n

which

Donna Sturman had an i n t e r e s t i n o r d e r t o s a t i s f y l o a n s had

made t o h e r b r o t h e r s .

91. Upon

i n f o r m a t i o n and

b e l i e f each

o f

t h e

Defendants knew o r should have known t h a t t h e proceeds o f t h e

l o a n s t h a t

made

a t

t h e beques t o f t h e B ro t h e r s were

b e i n g

used, i n

whole o r

i n p a r t i n

connect ion

w i t h t h e

B r o t h e r s

scheme

t o

d i v e r t

t h e

a s s e t s o f

th e


t o

e n t i t i e s

i n

which t h e B ro th er s would p e r s o n a l l y b en ef i t t o t h e d et r i m en t

and p r e j u d i c e o f Donna Sturman.

92. Upon


and b e l i e f

each o f

t h e

Defendants

knew

o r

should

have

known t h a t

t h e B ro th ers

were

v i o l a t i n g f id u ci a ry d u ti e s

t h e y

owed t o Donna Sturman

i n

connect ion

w i t h t h e making o f l o a n s and


i n which

a s s e t s

o f Family E n t e r p r i s e s

were

b e i n g

d iv er t e d t o t h e p re ju di c e

28



and d e t r i m e n t

o f

Donna Sturman and each

o f t h e

Defendants a i d e d

and

a b e t t e d

t h e s e b r e a c h e s .

93.

I n c on ne ct io n w ith t h e i r c r e d i t review p r o c e s s

each

o f t h e

Defendants

knew

o r

should

have

known o f

th e

a l l e g a t i o n s t h a t Donna Sturman had lodged

a g a i n s t th e

Bro thers

i n

the

F i r s t ew Y ork Su prem e c o u r t Act ion o r i n t h e S u r r o g a t e s

Court

Action .

94. None

o f th e

Defendants

c o n t a c t e d

Donna Sturman

o r

h e r

counse l t o

determine

whether Donna S tu rm an h ad consented t o

t h e t r a n s a c t i o n s in vo lv in g t he

Family


95.

Each o f

t h e

Defendants knew o r should

have

known

t h a t Donna Sturman d i d no t know

o r

approve o f any o f

th e

loans

made t o t h e

B r o t h e r s

and i n f a c t would

have

o b j e c t e d t o t h e

making o f such l o a n s .

96.

Upon

in fo rmat ion and

b e l i e f i n c on ne ct io n w ith

th e B r o th er s a p p l i c a t i o n s

f o r

l o a n s

one

o r more o f t h e

Defendants

r e c e i v e d

f i n a n c i a l documents

from

t h e B r o t h e r s which

contained

f a l s e f i n a n c i a l

in fo rmat ion

and

d e s p i t e

knowing

of

t h e

f a l s i t y of t h i s i n f o r m a t i o n st

approved

o f t h e l o a n s

i n

v i o l a t i o n

o f

bank p o l i c i e s and procedures .

97. Upon i n f o r m a t i o n and

b e l i e f T

v i o l a t e d

Regulat ion

U i n connect ion

wi th

th e making o f l o a n s t o th e

B r o t h e r s

p a r t i c u l a r l y

with

r e s p e c t t o

i t s

r e c e i p t

of

s t o c k

of

Wayne Adam t h a t

was

pledged t o

t

and

a c o n s t r u c t i v e t r u s t

i n t e r e s t t a s s e r t e d

i n

C ooper C om panies.

98. In

a d d i t i o n T used i t s p o s i t i o n

as

a

s u b s t a n t i a l

29



c r ed i t o r

o f

the Brothers to e xe rc is e c on tr ol and

in f luence

over

th e B ro the rs

in

o rde r to improper ly obta in

secur i ty

i n t e r e s t s

in

as se t s

of the Family Ente rp r i se s ,

and

to induce th e Brothers

to

take

add i t iona l

loans , th e

proceeds

o f

which would be

used

to

pay

p r i o r p ers on al lo an s o f th e B ro th ers .

99. As

a

r e su l t o f th e

Defendants i nequ i t ab le

conduct

and g r os sl y r ec k le ss l end ing

p rac t i c e s , th e

Bro thers were unable

to pay t h e i r deb ts .

Consequently, th e Family

Ente rp r i se s have

been l iqu ida ted

a t a

f r ac t ion

of t h e i r expected

value , to th e

de t r iment of

Donna

S turm an, and her

i nhe r i t ance

has been almost

completely di s s ipa t ed .

100. The

Defendants

p a rt ic ip at ed in th e

Brothers

breaches o f f iduc ia ry duty to gain

an

un fa i r advantage over Donna

Sturman.

101. By reason of th e fo regoing , Donna

Sturman

i s

en t i t l ed to a judgment dec la r ing t h a t

th e

cla ims o f each of

the

defendants

here in

are

equ i tab ly subordinated to her

cla ims in

t h i s bankrup tcy p roceed ing .

S ND FOR SE OND USE OF TION

(Negligence

Chase)

102.

P l a i n t i f f repea t s

and

rea l l eges each

and

every

a l lega t ion con ta ined in

paragraphs 1

though 101 above

as

fu l ly se t

fo r th

here in .

103.

T owed

H

Development Corp. (and i t s

shareholders a duty of reasonable

care in

th e p ro ce ss in g

and

determinat ion

o f

loan

app l i ca t ions .

30



1 0 4 .

T knew o r s h o u l d h av e

known

t h a t a l l o f

D evelopm ent C o r p . s s h a r e h o l d e r s h ad n o t a p p r o v e d o f

th e

l o a n s

t h a t

T

made t o

H.

D evelopm ent Cor p. i n May a n d O c t o b e r 1987

th e

p r o c e e d s

o f

w hich w ere

t o

be

u s e d

b y

D evelopm ent

C o r p . s

o f f i c e r s a n d

d i r e c t o r s

f o r p e r s o n a l p u r p o s e s an d n o t t o b e n e f i t

D evelopm ent

C o r p .

1 0 5 . Upon i n f o r m a t i o n and b e l i e f

T

c o n d u c t e d

no

i n d e p e n d e n t i n v es ti ga ti on t o d e t e r m i n e w h e t h e r t h e B r o t h e r s w ere

th e s o l e s h a r e h o l d e r s

o f H. D evelopm ent

C o r p .

I n s t e a d

T

r e l i e d

e n t i r e l y

on

r e p r e s e n t a t i o n s

made b y t h e

B r o t h e r s .

1 0 6 . T d i d n o t c o n t a c t Donna

St ur m an

o r h e r c o u n s e l

t o d e t e r m i n e

w h e t h e r

Donna

St ur m an

h a d

a n

i n t e r e s t

i n

D evelopm ent

Cor p.

Ha d T done s o T w ould

have

l e a r n e d t h a t

Donna

S t u r m a n

a s s e r t e d

t h a t

s h e h a d an i n t e r e s t

i n

H. D evelopm ent

Cor p.

1 0 7 .

M a t e r i a l s i n MHT s

own c r e d i t f i l e s

r e f l e c t e d

t h a t

Donna

S t u r m a n

o r someone o t h e r t h a n

one

o f t h e

B r o t h e r s was a

s h a r e h o l d e r

o f H. Devel opm ent

C o r p . Upon


an d b e l i e f

T t o o k

no

s t e p s t o l e a r n

t h e

i d e n t i t y o f t h i s

s h a r e h o l d e r o r

d e t e r m i n e

w h e t h e r an d when

t h e

t r a n s f e r o f t h e

s h a r e h o l d e r s

i n t e r e s t s t o t h e B r o t h e r s h ad o c c u r r e d .

1 0 8 . Upon i n f o r m a t i o n and b e l i e f

T

d i d n o t f o l l o w

i t s

own

p o l i c i e s

and

p r o c e d u r e s

i n

c o n n e c t i o n

w i t h

t h e

l o a n s

made

t o D evelopm ent Cor p. Upon


a n d b e l i e f

T

was

e a g e r t o

make

t h e s e l o a n s t o

i m pr ove

i t s f i n a n c i a l

p o s i t i o n i n

th e

e v e n t t h e B r o t h e r s wer e

u n a b l e

t o r e p a y

t h e i r


31



d e b t s .

1 0 9 . As r e s u l t o f MHT s n e g l i g e n c e , H. Development

C o r p . s l o a n a p p l i c a t i o n was approved

a n d

t h e c or p or a te p ro pe rty

s e c u r i n g t h e l o a n

was

s u b s e q u e n t l y

f o r e c l o s e d

when

H.

Development

Corp.

f a i l e d

t o me e t t

l o a n

o b l i g a t i o n s .

1 1 0 .

I n a d d it i o n , MHT owed Wayne-Adam and t

s h a r e h o l d e r s d u t y o f r e a s o n a b l e

c a r e

i n t h e p ro ce ss in g an d

d e t e r m i n a t i o n o f l o a n a p p l i c a t i o n s .

1 1 1 .

MHT

knew o r s h o u l d have

known

t h a t a l l

o f

Wayne

Adams s h a r e h o l d e r s h ad

n ot c o nse nte d t o

t h e

p l e d g i n g o f

m aj o r i ty o f t h e c o r p o r a t io n s

s t o c k i n e x c h a n g e

f o r

p e r s o n a l

l o a n an d t h e m o r t g a g i n g o f

c o r p o r a t e

p r o p e r t y .

1 1 2 . Upon i n f o r m a t i o n and

b e l i e f ,

MHT d i d n o t c o n t a c t

Donna Sturman o r

h e r

c o u n s e l

t o

d e t e r m i n e

w h e t h e r

Donna Sturman

o b j e c t e d t o t h e

s e c u r i t y demanded b y

MHT and p r o v i d e d

b y t h e

B r o t h e r s f o r

t h e A pr i l 1988 l o a n s , which i n c l u d e d

t h e

p l e d g i n g

o f

7 o f

t h e


s h a r e s

o f Wayne-Adam s t o c k ,

n e g a t i v e

p l e d g e a f f e c t i n g t h e

c o r p o r a t e

p r o p e r t y a n d

a n

a g r e e m e n t t o

p r o v i d e

m o r t g a g e

on

s u c h p r o p e r t y .

1 1 3 . Upon i n f o r m a t i o n and b e l i e f ,

MHT

knew

o r s h o u l d

have known o f t h e a l l e g a t i o n s t h a t Donna Sturman

h ad

l o d g e d

a ga in st t h e B r o t h e r s i n t h e F i r s t

ew York

Supreme C o u r t A c t i o n

o r i n

t h e

S u r r o g a t e s

C o u r t

p r o c e e d i n g

a t

o r

p r i o r

t o

t h e

t i m e

t

made t h e A pr i l

1988

l o a n s .

1 1 4 .

M a t e r i a l s

i n

MHT s own c r e d i t f i l e s

r e fl e c t e d t h a t

Donna S t u r m a n ,

o r someone o t h e r t h a n on e o f t h e B r o t h e r s ,

was

32




o f Development

Corp.

Upon i n f o r m a t i o n and b e l i e f

T took no s t e p s t o l e a r n

t h e

i d e n t i t y o f t h e


o r

determine

whether and when t h e t r a n s f e r

o f t h e s ha re h o ld e r s

i n t e r e s t s

t o

t h e

B r o t h e r s

had

o c c u r r e d .

115. Upon

i n f o r m a t i o n and

b e l i e f

T d i d

not

fol low

i t s

own

p o l i c i e s and procedures

i n

connect ion w i t h t h e l o a n s made

t o

Development Corp. o r Wayne-Adam. Upon i n f o r m a t i o n

and

b e l i e f T was e a g e r

t o

make

t h e s e l o a n s t o

improve

ts

f i n a n c i a l p o s i t i o n

i n t h e

event t h e B r o t h e r s were unable t o repay

t h e i r


d e b t s .

116. As

a

r e s u l t o f MHT s n e g l i g e n c e

H.

Development

C o r p . s l o a n a p p l i c a t i o n

was approved

and t h e c or p or a te p ro pe rt y

s e c u r i n g

t h e lo a n

was

s u b s e q u e n t l y f o r e c l o s e d

when

H. Development

Corp. f a i l e d t o meet i t s l o a n o b l i g a t i o n s .

117.

As a

r e s u l t

o f

M a n u fa c tu r er s n e g li ge n c e

T

was

a b l e t o t a k e

c o n t r o l

o f Wayne-Adam and s e l l t h e

v a l u a b l e

c o r p o r a t e

a s s e t i n

a

t r a n s a c t i o n t h a t

n e t t e d

Donna Sturman no

proceeds .

118.

By r e a s o n o f

t h e foregoing , Donna Sturman

has

been

damaged

i n

an amount t o be proven a t t r i a l .

S ND FOR THIRD USE OF TION

(Inducing

o r P a rt ic ip a ti n g In Breach

o f

F i d u c i a r y

Duty

A l l

Defendants)

119.

P l a i n t i f f r e p e a t s and r e a l l e g e s each

and every

a l l e g a t i o n c o n t a i n e d i n paragraphs 1

though

118 above as

f u l l y s e t f o r t h h e r e i n .

33



120. The Brothers in

t h e i r

pos i t ions

as

o f f i c e r s and

d i r ec to r s and genera l pa r tne rs o f

the

Family Ente rp r i se s owed

f iduc ia ry

du t ies to Donna

Sturman.

121.

Upon

in fo rmat ion

and

be l i e f

each

of the

defendant s

knew

o r should

have known t h a t

th e proceeds o f the

loans t h a t

made

a t the

beques t

o f the

Brothers

were being

used ,

in

whole o r

in

pa r t

in

connec t ion with th e B ro th ers

scheme

to d iv er t

the

as s e t s

o f the Family Ente rp r i se s

to

en t i t i e s

in which th e Brothers would

persona l ly

bene f i t .

122.

Upon in fo rmat ion and be l i e f each of the

Defendants

knew

o r should

have known t h a t

th e

Brothers were

v io l a t i ng

f iduc ia ry dut i e s they owed to

Donna

Sturman.

123.

By reason o f

the

fo regoing , Donna

Sturman has been

damaged

in

an amount to be proven a t

t r i a l .

WHERE S

P l a i n t i f f

Donna Sturman r e spec t f u l l y reques t s

Judgment as

fo l lows:

1 th e F i r s t Cause o f

Action,

fo r an

adjudica t ion

determinat ion and

dec la ra t ion

t h a t

th e cla ims o f

each

of the

defendants

a re

equ i t ab ly subord ina ted to th e cla ims o f

Donna

Sturman;

2 th e Sec ond Cause of Action, fo r neg l igence

awarding compensa to ry

damages aga ins t Chase

in

an amount

to be

determined

a t

t r i a l ;

3

the

Third

Cause o f Action, fo r

inducing

o r

pa r t i c i pa t i ng

in

the breach o f f iduc ia ry duty awarding

compensatory damages

aga ins t

each o f

the

defendants

in

an amount

34



to be determined a t

t r i a l

4) For

P l a i n t i f f s cos ts

of

s u i t

5)

For pre

and post-judgment i n t e r e s t and, i f

permissible ,

at torneys

fees;

and

6)

For such

other

and

f u r t h e r r e l i e f as may be deemed

j u s t and proper .

Dated: New

York, New

York

December

24,

1998

LLP

TEWART

OCCHIPINTI MAKOW

By,

c ; ; t h l - e t t - - i ~ ~ .

S : : ; : : - t - e - w - a - r : 7 t - , - - : I ; : - : I ; : - : I ~

AtJorney fo r

P l a i n t i f f

1350

Broadway,

Sui te

2200

New

York,

New

York 10018

212)

239-5500

Of Counsel:

Helen

D

Cha itman, Esq .

ROSS

HARDIES

65 East 55th S t r e e t

New York,

New York 10022

212)

421-5555

35



Service List

Leonard L. Spielberg Esq.

Harrington Ocko Monk

81 Main Street

White Plains

New

York

10601

Mark

N.

Parry Esq.

Moses

Singer LLP

Attorneys for Chase Manhattan Bank

1301

Avenue

of the Americas

New York

New

York

10019 6067

Allan

J.

Kirschner

Tenzer Greenblatt Fallon Kaplan

Counsel for

SFS

Management Co. LP

The Chrysler Building

405

Lexington Avenue

New York New York 10174

Ingrid M. Bagby Esq.

Cadwalader Wickersham Taft

Esqs.

Attorneys for Boston Safe Trust Co.

100

Maiden Lane

New York New York

10038

Carolyn S. Schwartz Esq.

Office of United

States

Trustee

33 Whitehall Street

New

York

New

York

10004

Maria Patterson Esq.

Attorney for the Bank of New York

One Wall Street 29

Floor

New York

New York 10286

Joseph Warren

Executor of

and Attorney

for the Estate of Muriel Sturman

2039 Palmer Avenue

Larchmont

New

York

10538



Sheldon Eisenberger Esq

Law

Offices of Sheldon Eisenberger

Attorneys for Howard Stunnan

3 Broad Street

New

York

New

York

10004

Mark Chinitz

Esq

Stein Riso Haspel Jacobs LLP

805 Third Avenue

New

York New York 10022

The Honorable Prudence

C Beatty

United

States Bankruptcy

Court

Southern District of New York

One

Bowling

Green

New

York

New

York

10004



UNITED STATES

B NKRUPTCY COURT

SOUTHERN

DISTRICT

OF

NEW YORK

In

re

HOW RD P. STURM N

Debtor

Donna

A

Sturman

Pla in t i f f

aga in s t

Chase

Manhattan

Bank and

SFS

Management Corp . ,

Defendants.

Chapter

Case

No. 89-B-11932 PCB

Adv.

Pro.

No.

98-9435A

ORDER

DISMISSING

DVERS RY

PROCEEDING

WHERE S

on August

4,

1989

an involuntary pe t i t i on was

f i l ed

aga ins t

Howard

P. Sturman the ~ D e b t o r ) pursuant

to

Bankrup

Code

~ C o d e ) §303 seeking

an order

fo r

r e l i e f

under

Chapter 7; an

WHERE S

on December 11,

1998,

Donna A. Sturman

commence,

th i s adversary

proceeding

pursuant to

subord ina te ce r t a in

claims

a

i n t e re s t s

of

Chase

Manhattan

Bank;

and

WHERE S the l a s t ent ry

on

th e a dv er sa ry docket

i s

February

4, 2000;

and



WHERE S

appear ing

t h i s adversary proceeding should b

dismissed

un der Local

Bankruptcy

Rule

9020-1 fo r

lack

of t imely an

d i l i gen t prosecu t ion i s the re fore

ORDERED t h a t

th i s

adversary proceeding be and

hereby i;

dismissed

Dated:

New York New

York

May 19 2005

/ s /

Prudence

Car te r Beat ty

United Sta tes Bankruptcy Judge



STEWART OCCHIPINTI MAKOW, LLP

Charles Stewart, l l Esq. CS-7099)

1350 Broadway Suite 2200

NewYorl<:, New York 10018

212)

239 5500

WOLF HALDENSTEIN ADLER

FREEMAN

HERZ, LLP

Helen

Davis

Chaitrnan, Esq. HDC-4266) ,

270

Madison

Avenue

New

York

NewYork 10016

212)

545 4600

Attorneys

for

PlaintiffDonna Sturman


SOUTHERN

DISTRICT OF NEW YORK

x

re:

WAYNE A. STURMAN, BRUCE D

STURMAN, and HOWARD P STURMAN,

Debtors.

--------------------------------------------------------------x

DONNA STURMAN, et al

Plaintiff,

- against

THE CHASE MANHATTAN BANK as successor:

.

in

interest to MANUFACTURERS HANOVER

TRUST COMPANY and CHEMICAL BANK),

and SFS MANAGEMENT CORP.,

Defendants.

--------------------------------------------------------------x

ORDER

Chapter 7 Cases

89 B 11932 PCB)

89 B 11933 PCB)

89 B 11934 PCB)

Jointly Administered)

Adversary Proceeding

No. 98-9435A

Upon the motion ofThe Chase Manhattan Bank Chase ) for the entry of an order

dismissing the First Amended Complaint and awarding sanctions against plaintiffDonna

Sturman and her counsel, Charles A. Stewart, Esq., Stewart Occhipinti

Makow, LLP, Helen



Davis

haitman

Esq. and Ross Hardies; and good and sufficient notice

of

Chase s motions

having been given; and having considered the Memorandum

of

Law the affidavit ofCharles

Stewart

sworn

to March 9 1999 and the exhibits annexed thereto and the affidavit

of

Donna

Sturman sworn to March 9 1999 all submitted in opposition to Chase s motions; and upon the

hearing held with respect to Chase s motions on May 24 1999; and for good cause shown;

IT

IS

this _ day

of

May 1999 hereby ORDERED that:

Chase s motion to dismiss the First Amended Complaint is DENIED and

2. Chase s motion for sanctions against plaintiffDonna Sturman and her counsel

Charles A Stewart Stewart Occhipinti Makow LLP Helen Davis Chaitman and Ross

Hardies is DENIED.

UNITED STATES BANKRUPTCY JUDGE



CLOSED

U.S. Bankruptcy Court

Southern District of New York (Manhattan)

Adversary Proceeding #: 98-09435-pcb

Assigned to: Judge Prudence Carter Beatty Lead BK Case: 89-11932 Lead BK Title: Wayne A. Sturman Lead BK Chapter: 7 Demand:

Date Filed: 12/11/98 Date Terminated: 05/20/05 Date Dismissed: 05/19/05

Nature[s] of Suit: 457 Subordinate Claim/Interest

Plaintiff -----------------------

Donna A. Sturman

V.

Defendant-----------------------

Chase Manhattan Bank, (as successor in

interest to Manufacturers Hanover Trust

Company and Chemical Bank); and SFS

Management Corp.

c/o McCarthy Fingar Donovan11 Martine AvenueWhite Plains, NY 10606-1934(914) 946-3700

represented by Mark Nelson Parry

Moses & Singer LLP

The Chrysler Building405 Lexington Avenue

12th Floor New York, NY 10174(212) 554-7800Fax : (212) 554-7700

Email: [email protected] LEAD ATTORNEY

Filing Date # Docket Text

05/20/2005

Adversary Closed. This Adversary Proceeding Docket is Closed Subject

to the Filing of a Notice of Appeal within Ten(10)Days of the Entry of theOrder Terminating This Adversary Proceeding. (Gadson, Carol) (Entered:05/20/2005)

05/19/2005 33Order signed on 5/19/2005 Dismissing Adversary Proceeding. (Gadson,Carol) (Entered: 05/19/2005)

02/04/2000 32

Memorandum of Law By Mark N. Parry for Defendant Chase ManhattanBank in Support of [26-1] Motion For Summary Judgment dismissing firstamended complaint [Returnable: 11:00 12/17/99 Courtroom 701[PCB] ]

York Southern Live System https://ecf.nysb.uscourts.gov/cgi-bin/DktRpt.pl?72592583118951

12/21/2009 1



by Mark N. Parry . [EOD Date: 2/7/00. Doc. No: 32] (Entered:02/07/2000)

02/04/2000 31

Response By Defendant Chase Manhattan Bank To [29-1] Statement of uncontested material facts by Helen Davis Chaitman . [EOD Date: 2/7/00.

Doc. No: 31] (Entered: 02/07/2000)

01/21/2000 30

Memorandum of Law By Attorney Helen Davis Chaitman for plaintiff inreply to [27-1] Of Law Memorandum by Mark N. Parry . [EOD Date:1/24/00. Doc. No: 30] (Entered: 01/24/2000)

01/21/2000 29

Statement of uncontested material facts by Attorney Helen DavisChaitman for plaintiff Re: [26-1] [EOD Date: 1/24/00. Doc. No: 29]

(Entered: 01/24/2000)

11/29/1999 28

Affidavit by Donald M. Weisberg in support of the Chase ManhattanBank's motion RE: [26-1] Motion For Summary Judgment dismissing firstamended complaint [Returnable: 11:00 12/17/99 Courtroom 701[PCB] ] by Mark N. Parry [EOD Date: 12/1/99. Doc. No: 28] (Entered:12/01/1999)

11/29/1999 27

Supplemental Memorandum of Law By Mark N. Parry for Defendant

Chase Manhattan Bank in Support of [26-1] Motion For SummaryJudgment dismissing first amended complaint [Returnable: 11:00 12/17/99Courtroom 701[PCB] ] by Mark N. Parry . [EOD Date: 11/30/99. Doc. No: 27] (Entered: 11/30/1999)

11/29/1999 26

Motion By Mark N. Parry for Defendant Chase Manhattan Bank For

Summary Judgment dismissing first amended complaint [Returnable:11:00 12/17/99 Courtroom 701[PCB] ] [EOD Date: 11/30/99. Doc. No:

26] (Entered: 11/30/1999)

07/30/1999 25

Order Signed On: 7/28/99 Granting [24-1] Application For Admission ProHac Vice by Philip L. Guarino. [EOD Date: 7/30/99. Doc. No: 25](Entered: 07/30/1999)

07/29/1999 24Application By Philip L. Guarino For Admission Pro Hac Vice [EODDate: 7/30/99. Doc. No: 24] (Entered: 07/30/1999)

07/27/1999

Filing Fee Paid RE: [24-1] Application For Admission Pro Hac Vice byPhilip L. Guarino [ Filing Fee $ 25.00 Receipt # 96987] [EOD Date:7/30/99] (Entered: 07/30/1999)

07/15/1999 23

Brief/Memorandum by Helen Davis Chaitman, Attorney for Plaintiff Donna Sturman, In Opposition To [5-1] Motion To Dismiss FirstAmended Complaint and For Sanctions. [EOD Date: 7/26/99. Doc. No:23] (Entered: 07/26/1999)


12/21/2009 1



07/13/1999

Hearing Re: [19-1] Of Law Memorandum by Chase Manhattan Bank,[20-1] Of Law Memorandum by Chase Manhattan Bank, [21-1] Of LawMemorandum by Chase Manhattan Bank Schd For 2:30 7/28/99 at

Courtroom 701[PCB] [EOD Date: 7/23/99] (Entered: 07/23/1999)

07/13/1999 22

Affidavit Of Service Of [19-1] Of Law Memorandum by ChaseManhattan Bank, [20-1] Of Law Memorandum by Chase Manhattan

Bank, [21-1] Of Law Memorandum by Chase Manhattan Bank [EODDate: 7/23/99. Doc. No: 22] (Entered: 07/23/1999)

07/13/1999 21

Reply Memorandum Of The Chase Manhattan Bank in Further Support of [5-1] Motion To Dismiss First Amended Complaint by Chase ManhattanBank. [EOD Date: 7/23/99. Doc. No: 21] (Entered: 07/23/1999)

07/13/1999 20

Memorandum Of Law Of The Chase Manhattan Bank in Support of [5-1]Motion To Dismiss First Amended Complaint by Chase Manhattan Bank.[EOD Date: 7/23/99. Doc. No: 20] (Entered: 07/23/1999)

07/13/1999 19

Memorandum of The Defendant Chase Manhattan Bank in Support of [7-1] Motion For Sanctions by Chase Manhattan Bank. [EOD Date:

7/23/99. Doc. No: 19] (Entered: 07/23/1999)

04/26/1999 18

Reply Memorandum Of Chase Manhattan Bank In Further Support Of [5-1] Motion To Dismiss First Amended Complaint by Chase ManhattanBank. [EOD Date: 4/29/99. Doc. No: 18] (Entered: 04/29/1999)

04/14/1999 17

Transcript of Hearing Held on 3/16/99 RE: [5-1] Motion To Dismiss FirstAmended Complaint by Chase Manhattan Bank [EOD Date: 4/15/99.

Doc. No: 17] (Entered: 04/15/1999)

04/07/1999 16

Affidavit In Support by Attorney Charles A. Stewart, III RE: [14-1]Opposition by Donna A. Sturman [EOD Date: 4/8/99. Doc. No: 16]

(Entered: 04/08/1999)

04/07/1999 15

Affidavit In Support by Donna A. Sturman RE: [14-1] Opposition byDonna A. Sturman [EOD Date: 4/8/99. Doc. No: 15] (Entered:04/08/1999)

04/07/1999 14

Memorandum Of In Opposition by Donna A. Sturman Re: [5-1] Motion

To Dismiss First Amended Complaint And For Sanctions by ChaseManhattan Bank [EOD Date: 4/8/99. Doc. No: 14] (Entered: 04/08/1999)

03/26/1999 13

Transcript of Hearing Held on 3/16/99 RE: [5-1] Motion To Dismiss FirstAmended Complaint by Chase Manhattan Bank [EOD Date: 3/29/99.Doc. No: 13] (Entered: 03/29/1999)

03/23/1999 12

Notice by Attorney Helen Davis Chaitman To Substitute Attorney: HelenDavis Chaitman of Wolf Haldenstein Adler Freeman & Herz LLP For Old


12/21/2009 1



Attorney: Helen Davis Chaitman of Ross & Hardies [EOD Date: 3/29/99.Doc. No: 12] (Entered: 03/29/1999)

03/17/1999 11

So Ordered Stipulation Signed On 3/16/99 by and between plaintiff and defendant Re: Sturman shall serve her response to the Motion to Dismiss

and the Sanctions Motion on or before 4/6/999 at 5:00 p.m. Chase shallserve its response to these motions on or before 4/23/99 at 5:00 p.m.

Sturman shall seek no discovery from Chase, with respect to thisadversary proceeding or otherwise, until after this Court has ruled withrespect to Chase's Motion to Dismiss. [EOD Date: 3/17/99. Doc. No: 11](Entered: 03/17/1999)

03/09/1999 10

Certificate Of Service Of [7-1] Motion For Sanctions [EOD Date:

3/10/99. Doc. No: 10] (Entered: 03/10/1999)

03/08/1999 9

Motion By Defendant Chase Manhattan Bank To Stay Discovery PendingDecision on Motion to Dismiss [Returnable: 2:30 3/16/99 Courtroom701[PCB] ] [Last Day For Objections to Motion: 3/15/99 ] [EOD Date:

3/10/99. Doc. No: 9] (Entered: 03/10/1999)

03/08/1999 8

Memorandum of Law By Mark N. Parry for Defendant Chase ManhattanBank in Support of [7-1] Motion For Sanctions [EOD Date: 3/10/99. Doc. No: 8] (Entered: 03/10/1999)

03/08/1999 7

Motion By Defendant Chase Manhattan Bank For Sanctions [Returnable:2:30 3/16/99 Courtroom 701[PCB] ] [EOD Date: 3/9/99. Doc. No: 7](Entered: 03/09/1999)

02/16/1999 6

Memorandum of Law By Mark N. Parry for Defendant Chase ManhattanBank in Support of [5-1] Motion To Dismiss First Amended Complaint by

Chase Manhattan Bank. [EOD Date: 2/17/99. Doc. No: 6] (Entered:02/17/1999)

02/16/1999Added Attorney Mark N. Parry [EOD Date: 2/17/99] (Entered:02/17/1999)

02/16/1999 5

Motion By Defendant Chase Manhattan Bank To Dismiss First Amended Complaint [Returnable: 2:30 3/16/99 Courtroom 701[PCB] ] [EOD Date:2/17/99. Doc. No: 5] (Entered: 02/17/1999)

01/19/1999 4

So Ordered Stipulation Signed 1/15/99, Between Attorneys For PlaintiffsAnd Defendant Extending Time To Answer Or Move Re: [EOD Date:1/19/99. Doc. No: 4] (Entered: 01/19/1999)

01/04/1999 3Affidavit Of Service Of [2-1] Amended Complaint by Donna A. Sturman[EOD Date: 1/12/99. Doc. No: 3] (Entered: 01/12/1999)


12/21/2009 1



12/30/1998 2

First Amended Complaint RE: Jury Trial Demanded On Damage ClaimsFiled By Plaintiff Donna A. Sturman [1-1] Complaint NOS 457Subordinate Claim/Interest [EOD Date: 1/7/99. Doc. No: 2] (Entered:

01/07/1999)

12/11/1998

1 Summons[es] Issued on Chase Manhattan Bank in 98-09435 [1-1]Complaint NOS 457 Subordinate Claim/Interest Answer due 1/11/99 for

Chase Manhattan Bank ;Pre-Trial Conference Set For 3:00 2/17/99 atCourtroom 701[PCB] [EOD Date: 12/14/98] (Entered: 12/14/1998)

12/11/1998 1

Complaint [98-9435] Donna A. Sturman vs. Chase Manhattan Bank. NOS457 Subordinate Claim/Interest . [ Filing Fee $ 150.00 Receipt # 88032][EOD Date: 12/14/98. Doc. No: 1] (Entered: 12/14/1998)

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12/21/2009 1




SOUTHERN DISTRICT OF NEW YORK

--------------------------------x

In re : Chapter 7

HOWARD, BRUCE & WAYNE STURMAN, : Case No. 89-B-11932(PCB)

89-B-11933

Debtors : 89-B-11934

--------------------------------x Jointly Administered

DONNA STURMAN, :

Plaintiff, : Adv. Pro. No.99-8076A

-against- :

:

Mark Stuart Goldberg,

Individually and as Trustee :

of Debtors Estates

Defendant. :

--------------------------------x

ORDER DISMISSING ADVERSARY PROCEEDING

WHEREAS, on August 4, 1989 an involuntary petition was

filed against the Debtors pursuant to Bankruptcy Code §303 seek

order for relief under Chapter 7; and

WHEREAS, on February 8, 1999, Donna Sturman (the

"Plaintiff”) commenced this adversary proceeding against the Deb

alleging breach of fiduciary duty and waste of assets;

and



2

WHEREAS, there is no activity recorded on the docket o

this adversary proceeding since March 23, 1999; and

WHEREAS, it appearing this adversary proceeding should

dismissed under Local Bankruptcy Rule 9020-1 for lack of timely

diligent prosecution, it is therefore

ORDERED, that this adversary proceeding be, and hereby

dismissed.

Dated: New York, New York

May 20, 2005

/s/ Prudence Carter Beatty

United States Bankruptcy Judge



CLOSED




Assigned to: Judge Prudence Carter Beatty Lead BK Case: 89-11932 Lead BK Title: Wayne A. Sturman Lead BK Chapter: 7 Demand: $10000000


Nature[s] of Suit: 498 Other Action

Plaintiff -----------------------

Donna Sturman, Individually, as a Beneficiary of the Estates of Henry and

Muriel Sturman and as a Partner and/or

Shareholder in 6-8 Pelham Parkway

Corp., Cauldwell Management Corp.,

Anthony J. Griffen Corp., HP Howard &

Co., H. Development Corp., Wayne

represented by David H. Relkin

575 Eighth Avenue New York, NY 10018(212) 244-8722Fax : (212) 580-4409Email: [email protected]

V.

Defendant-----------------------

Mark Stuart Goldberg, Mark Stuart

Goldberg, Individually, and as the Trustee

of the Estates of Wayne, Howard and

Bruce Sturman

represented by Marc Stuart Goldberg

Harrington, Ocko & Monk, LLP81 Main StreetWhite Plains, NY 10601

(914) 686-4800Fax : (914) 686-4824Email: [email protected]


09/16/2009 7

Letter by the Honorable Prudence Carter Beatty addressed to Mr.

Relkin (related document(s) 5 ) filed by Clerk's Office U.S. Bankruptcy

Court. (Gadson, Carol) (Entered: 09/16/2009)

09/09/2009 6

Letter of Leonard I. Spielberg, in response to the letter of David H.

Relkin dated September 4, 2009, filed by Marc Stuart Goldberg on behalf of Mark Stuart Goldberg. (Goldberg, Marc) (Entered: 09/09/2009)


12/21/2009 1



09/04/2009 5

Application for Ex Parte Relief Pre-motion Conference Request filed byDavid H. Relkin on behalf of Donna Sturman. (Relkin, David) (Entered:09/04/2009)

09/04/2009 4

Pre Notice of Appearance in Adversary Proceeding Pre-motion

Conference Request filed by David H. Relkin on behalf of DonnaSturman. (Relkin, David) (Entered: 09/04/2009)

05/23/2005

Adversary Closed. This Adversary Proceeding Docket is Closed Subjectto the Filing of a Notice of Appeal within Ten(10)Days of the Entry of theOrder Terminating This Adversary Proceeding. (Gadson, Carol) (Entered:05/23/2005)

05/23/2005 3Order signed on 5/20/2005 Dismissing This Adversary Proceeding.(Gadson, Carol) (Entered: 05/23/2005)

03/23/1999 2

Notice by Attorney Helen Davis Chaitman To Substitute Attorney: HelenDavis Chaitman of Wolf Haldenstein Adler Freeman & Herz LLP For Old Attorney: Helen Davis Chaitman Ross & Hardies [EOD Date: 3/29/99.Doc. No: 2] (Entered: 03/29/1999)

02/09/1999

1 Summons[es] Issued on Mark Stuart Goldberg in 99-08076 [1-1]

Complaint NOS 498 Other Action, Not Related Answer due 3/11/99 for Mark Stuart Goldberg ;Pre-Trial Conference Set For 2:30 3/16/99 atCourtroom 701[PCB] [EOD Date: 3/16/99] (Entered: 03/16/1999)

02/09/1999 1

Complaint [99-8076] Donna Sturman vs. Mark Stuart Goldberg . NOS498 Other Action, Not Related . [ Filing Fee $ 150.00 Receipt # 90182]

[EOD Date: 3/16/99. Doc. No: 1] (Entered: 03/16/1999)


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12/21/2009 1



UNITED STATES

BANKRUPTCY

COURT

SOUTHERN I S T R I ~

OF

NEW

YORK

- - - - -

- - - X

In re

W YNE A. STURMAN,

Debtor.

In

r e

BRUCE D. STURMAN,

Debtor.

In re

HOW R

P.

STURMAN,

Debtor.

DONNA STURMAN

BUTLER,

Chapter 7

Southern Distr ic t

of

New

York

Bankruptcy

Case

No.

89-B-11932

PBA

:

V : : h a p t e r

Southern

Dis t r ic t

of

New York

Bankruptcy

Case

No.

89-B-11933 PBA

x

Chapter 7

Southern

Dis t r ic t

of

New York

Bankruptcy

Case

No. 89-B-11934 PBA

x

/

Plaint i f f

- a g a i n s t -

HOW R

STURMAN,

individually

an d

as Executor

of

th e E sta te

of

Muriel

Sturman

BRUCE STURMAN,

W YNE STURMAN,

JOSEPH

WARREN,

as

Executor

of

th e

E sta te

of

Muriel

Sturman 6-8

PELHAM

PARKWAY CORP.

CAULDWELL

MANAGEMENT CORP. ANTHONY J :

GRIFFEN CORP. HP HOW R CO.

H. DEVELOPMENT

CO.

WAYNE-ADAM CORP.

and CORNWALL

ESTATES,

INC.

Defendants.

- - - - - - - x

Adversary

Proceeding

No. 7

-

i 0 •

7002.. S.

VERIFIED

APPLICATION

FOR

REMOVAL



TO

THE HONORABLE

PRUDENCE BEATTY

ABRAM

UNITED

STATES

BANKRUPTCY JUDGE:

Donna Sturman Butler,

the

plaint i f f

in the above-

captioned

adversary proceeding

( Butler ),

by

her

attorneys,

Milbank,

Tweed Hadley McCloy for her application under

Rule 9027 of the Rules of Practice

and

Procedure in Bankruptcy

(the Bankruptcy

Rules ) to

remove

the above-captioned

civi l

action to this

Court, respectfully

represents

as fo llows:

Background

1. This

application

seeks

removal

to

th is

Court of

a

c iv i l action pending in

the

Supreme

Court of the

State

of

New

York,

County of New

York,

captioned Butler v. Sturman.

e t

a l .

Index

No. 15379/87, lAS Part 3 (Davis, J .

(the

Action ).

The Action was commenced in 1987,

prior to the

commencement

of the

bankruptcy

cases descr ibed

in paragraph 2

herein.

2. Involuntary peti t ions for re l ief (the

peti t ions )

under

chapter 7

of the Bankruptcy

Code,

11 U.S.C.

SS

101

e t

seg. (the

Bankruptcy

Code ), were fi led on August 4,

1989 in

the

United States Bankruptcy Court

for the

Southern

Dis t r ic t

of

New York against Howard P. Sturman, Bruce D

Sturman

and Wayne A Sturman (collectively,

the

Debtors ).

3.

On April 8,

1991,

th is

Court

entered

orders for

re l ief under

chapter

7 of

the

Bankruptcy Code

(the

Orders for

Relief ) in each

of

the Debtors cases.

2



4.

On

April 29, 1991, pursuant to

section 701(a)(1)

of the

Bankruptcy

Code 11 U.S.C. S 70l(a)(1), the United

States

t rustee appointed

Marc Stuart

Goldberg, Esq., as the interim

chapter

7

trustee

each

of

the

Debtors

chapter

7

cases.

The

Action Being

Removed

5.

By Summons and

Complaint dated

June 26, 1987,

Butler

commenced the

Action against each of the Debtors.

6 By Summons dated July

10, 1987

and

Amended

Complaint dated July 9,

1987 (the

Complaint and the

Amended

Complaint

are

hereinafter

collectively

referred to

as

the

Complaint ),

Butler

named

the following as

additional

defendants in

the Action: Howard Sturman,

in his

capacity as

co-executor o f the

estate

of Muriel sturman; Joseph Warren, in

his capacity as co-executor of the estate of Muriel

Sturman;

6-8 Pelham Parkway Corp.; Cauldwell Management Corp.;

Anthony Griffen Corp.; HP Howard Co.;

H

Development Co.;

Wayne-Adam

Corp.;

and

Cornwall

Estates, Inc.

(collect ively with

the

Debtors,

the

Defendants ).

7.

The Defendants,

including the Debtors,

answered

the Complaint

on

January 6, 1988.

Copies of

the

pleadings

in

the Action, inclUding the Summonses the Complaint

and

the

Defendants

answers,

are

annexed

hereto as Exhibits A

through

Q.

Upon

this

Cour t s request , we wil l

promptly

provide copies of

a l l

papers (which are voluminous) served in the Action.



...

,

i

8.

The

thrust of Butler 's

allegations

i s that the

Debtors

breached their

fiduciary

duties

owed

to

her

through a

persis tent

course

of self-dealing

and

wrongfully excluded

Butler

from sharing in the flow of in formation, management and revenues

of the ent i t ies

in which

she, along with the Debtors, has an

interest . .

As

a consequence of the Debtors alleged wrongful

actions, Butler

seeks

an accounting with

respect

to three

-

ew York general partnerships 1n which she

i s

a g e n e r . i ~ p a r t n e r

.

along with her

brothers,

the Debtors.

9.

In

the

Complaint,

Butler al p derivatively s . - : ~ . . . . . .

the Debtors for their acts

Ai

p f f i c e r s

a n d directg£1 of

t h a ~

. .1--4

sanen corpoTote

defendants, which

are

closely-held family

corporations.

Moreover,

Butle r a lso seeks an order. granting,.

injunctive r e l i e f agains,t the Defendants enjoining, among

other

things, the sale or transfer of

the

assets. of the corporate

-

defendants

andlor

the

three

New

York

general·

partnerships

in

.... • . t,-, _'

_ 0

....... , , : .

.

which

she and the Debtors a re par tn er s.

Finally, Butler

also oe

.• ~ _ j . . t ~ , _ . - •• '..

C > -

•• - >,- : _0

seeks

an award of

punitive

damages

against

the Debtors .

...,

--TC;?'Ti;J:;;'t10a 'rii

presently p e n d i ~ 9 ~ ' · ·

.

J u s t l Y ~ 4 ,

In.IAS Part 3 of

the

Supreme court of the S tate of

.:.,--.< : ; ; : : ~ -

New York,

New

York County. The Action

haa been

' IIIQ

l g r t b g ~

filinq.C)f t h P e t i t io n s

There

was

limited

discovery among the

A

_c -.· .:

~ _ o ~ ~ : P ; ; ~ : 0 : ~

.oJ

p arties prio r to the Act ion being stayed.

4



Grounds for

Removal

11 . This Court

has

jur isdict ion over the subject

matter of the

Action

under 28 U.S.C. S 1334(b).

12. The

Action

may

be

removed to

t h i s

Court pursuant

to (a) 28 U.S.C.

1452, 1334 and 157, (b) a ~ r u p t c y

Rule 90l l (a) (2) , and (c) the Standing Order

of

Referral

of

Cases

to

Bankruptcy

Judges

of the United

States i s t r i c tCourt

for

the

Southern i s t r i c tof New

York Ward

Acting C.J.) dated

July

10, 1984.

13.

s

the

Action

was

pending

as of

the

commencement

of

each

of the

Debtors

cases and the Orders for R elief were

entered on April 8, 1991,

t h i s

Application

i s

t imely submitted

pursuant to Bankruptcy Rule 9027(a)(2)(A),(B).

14. The Action

i s

a

c i v i l

action

other than

a

proceeding

before the United

States Tax

Court or a

c i v i l

action

by a governmental unit to enforce the governmental u n i t s

police

o r r egula to ry

power.



WHEREFORE Donna

sturman

Butler respectfully requests

that

the

Action be removed

to

this

Court.

Dated:

New

York,

New

York

June

28,

1991

Respectfully submitted,

MILBANK TWEED

HADLEY

&

McCLOY

Y ~ J ~

MeiUb'er of the Firm

Stephen J . Blauner

S.S.

1997)

1

Chase Manhattan

Plaza

New York, New York 10005

212

530-5000

Attorneys for Applicant

Donna

Sturman Butler

TO: Marc Stuart Goldberg,

Esq.,

interim chapter 7

Trustee

of

the

estates of Wayne A

Sturman,

Bruce

D Sturman and

Howard

P.

Sturman

Marc

Stuart

Goldberg

and

Associates

60

East

42nd

Street ,

Room

2501

New

York,

New

York 10165

Otterbourg,

Steindler ,

Houston & Rosen,

P.C.

230 Park Avenue

New

York,

New York 10169

Attn: Morton L. Gitter , Esq.

Attorneys

for Marc Stuart Goldberg, Esq.,

interim chapter

7 Trustee

of

the estates

of Wayne

A Sturman,

Bruce

D

Sturman and Howard

P.

Sturman

i

i

·i

.

6



Stroock

Stroock Lavan

Seven Hanover Square


Attn: Kevin L.

Smith

Esq.

Attorneys

for

Defendants

Howard

Sturman individually and as

Executor of the Estate of Muriel Sturman

Bruce Sturman Wayne Sturman 6 8

Pelham

Parkway

corp. Cauldwell Management

Corp.

Anthony

Griffen Corp. P Howard Co.

Development Co.

Wayne-Adam

Corp. and Cornwall

Estates

Inc.

Hesterberg Keller

32

Court Street

Brooklyn New

York 11201

Attn: James

F. McCoole

Esq.

Attorneys

for Defendant

Joseph

Warren

as

Executor

of

the Estate

of Muriel

Sturman

7



VERIFIC TION

ST TE

OF

NEW YORK

ss . :

COUNTY

OF

NEW

YORK

DONN

STURM N

BUTLER being sworn

says:

I am the

pla in t i f f

in a

civ i l action

pending in the

Supreme

Court of

the

State of New York County of New York

captioned Butler v.

Sturman

e t a l .

Index No

15379/87

lAS

Part

Davis J . . I have read and know the

contents

of

the

foregoing

Application. The

allegations of

the

Application

are

true to the best of my knowledge information and

belief .

~ ~ ~ U T L E R

~

to before

me th is

day of

June 1991.

Notary

Public

r r m ~

NOIilry

Public

State New Vtfk

No 43· 4919195

GJaltlie ln RLCf mlR4 CQlJIl1y

C c m m ~ s I O l l E x p i r ~ s

eblll3ry

29

8



xhibit



,

\

i

,\

Ii

i

,

SUPREME

COURT OF

THE STATE

OF

NEW

YORK

P la in t i f f

DONN

STURM N BUTLER,

Ii ~ Y OF

NEW

Ii

I

- - - - - - - -

-x

SUMMONS

-aga ins t -

I

HOW RD STURM N BRUCE STURM N

and W YNE STURM N

Index

Defendants,

I

- - - - - - - - -

- -x

,

i

SIR

S

YOU RE HEREBY SUMMONED to answer the complain t

in

t h i s

ac t ion and to serve

a

copy

of

your answer

upon

the a tto rn ey s fo r

the p l a i n t i f f

here in

Within 20 days a f t e r the se rv ice o f t h i s

summons, exclusive o f the

day

of

serv ice o r

wi thin 30

days

a f t e r

the serv ice i s complete if

t h i s summons

i s

no t personal ly

I

d el iv ere d to you w ith in the Sta t e of New

York); and in case

o f

:

your

f a i lu re to a nsw er, ju dgment

wi l l be

taken agains t

you by

MILBANK, TWEED

H DLEY McCLOY

1

Chase Manhattan Plaza

New York, N.Y. 10005

2 12) 530-5000

Attorneys fo r

P l a i n t i f f

Donna Sturman But le r

New

York,

New

York

June 26, 1987

Dated:

i de fau l t fo r

the

r e l i e f

demanded

in the complaint .

i:

II

i

II

I;

I

i



SUPREME

COURT

OF THE STATE OF NEW

YORK

COUNTY

OF

NEW

YORK

- - - - - - - -

-x

DONNA STURMAN

BUTLER

P la in t i f f ,

- aga in s t -

HOWARD

S URMAN

BRUCE STURMAN

and

WAYNE STURMAN

Defendants.

- - -

-x

COMPLAINT

Index No 53

1

P la in t i f f ,

Donna Sturman

Bu tle r B u tle r ) ,

by her

a t to rneys , Milbank,

Tweed, Hadley

McCloy, a l l eges fo r her

compla in t :

1.

P l a i n t i f f Donna

Sturman But ler i s a

res iden t

of the

Sta t e

of

New

York, and

cur ren t ly

r s i ~

a t

40

East

68th

St ree t ,

New York, New York.


and

be l i e r ,

At a l l

t imes

mentioned

here in ,

defendants Howard

Sturman,

Bru ce S turman and Wayne

Sturman each res ide

in

New York

County.

3

n

or about December 1,

19.78, Butle.r en tered

in to a

Par tnersh ip

Agreement th e Agreement with defendants , a

copy

o f

which

Agreement i s

annexed

here to as Exhib i t A.



·

4.

But le r and th e

defendants are the so le

genera l

p ar tn ers in

Pelham

Racquetba l l and Heal th

a New York par tnersh ip

the

pa r tne rsh ip ) .

5. Pelham Racquetbal l and Heal th

Club

d/b /a Metrof i t

Athle t i c

Club

o f Pelham

opera tes

a racque tba l l and hea l th c lub

loca ted a t 6 8 Pelham

Parkway

Pelham Manor New York.

Upon

informat ion and be l i e f , the

racque tba l l

club i s th e

only asse t

owned

by

th e par tnersh ip .

6. The Agreement was

made

and en tered in to between

But le r and

the defendants

fo r

th e purpose among others , of

p ro f i t i ng

from

the business of the

c lub .

7. Since the incep tion o f the par tnersh ip , But l e r has

been sys temat ica l ly excluded from the m an age me nt a nd a f f a i r s o f

th e par tnersh ip

by defendan t s .

Despi te

repeated

reques t s by

But le r ,

defendants

have refused to consu lt

with

h er or

inform

he r

as

to

any

mat ters

r e la t ing to

th e

par tnersh ip .

Since

1981

But le r

has

been d en ie d i nf o rm a ti on

re ga rd in g th e

a f f a i r s of the

pa r tne rsh ip ,

inc lud ing access

to

books

and records ,

o ther

than

a

copy o f the A gree me nt a nd incomplete ta x re tu rn s fo r

ca lendar

years

1983 1985.

Defendants

have

contin\led to

re fuse

to provide

But le r

w ith in fo rm a tio n re ga rd in g the

par tnersh ip

a f f a i r s ,

o r

access

to t books and records ,

despi te

th e ex is tence of an

agreement en tered i n to between

But le r and

defendants in January

1987

which

prov ides t h a t

defendants

must provide

But ler

with

2



. /

documents

r e l a t i n g

t o t h e family p a r t n e r s h i p s and c o r p o r a t i o n s i n

which

she has an ownership i n t e r e s t .

8. On June 24 1987

counsel f o r

B u t l e r l e a r n e d

from

counsel

f o r defendants t h a t

t h e

p a r t n e r s h i p

a s s e t s may have been

s o l d .

B u t l e r s counsel d i s c o v e r e d t h i s t r a n s a c t i o n only a f t e r

d i r e c t l y

i n q u i r i n g about t

9. Defendants d i d

no t

give

B u t l e r any n o t i c e

o f th e

proposed s a l e nor d i d they

inform

h e r o f any p a r t n e r s h i p meet ing

a t

which

t h e sUbjec t was t o

be

d i s c u s s e d . Despi te

r e q u e s t s

defendants

have

n o t

provided

B u t l e r

with

any documen ts

about

t h e

s a l e .

1

Counsel f o r t h e defendants has

i n d i c a t e d

t h a t

t h e

purchase p r i c e f o r th e Pelham Racquetba l l

Club

i s 1 500 000

with t h e


t a k i n g back

a l l paper and

t h e f i r s t

payment

being made i n 1988.

11.

In

l a t e 1986 one

o f t h e defendants o f f e r e d

t o buy

out

B u t l e r s i n t e r e s t

i n t h e p a r t n e r s h i p which

defendants

contend

i s twenty p e r c e n t

f o r 900 000.

FIRST USE

OF T I ~

12. B u t l e r

r e a l l e g e s

paragraphs 1-11.

13.

Upon i n f o r m a t i o n and b e l i e f a t a l l tim es d urin g

t h e

cont inuance o f

t h e


and up t o

t h e p r e s e n t t ime the



\

defendants

had

e x c l u s i v e

charge and a c c e s s t o

t h e

books

o f

account , r e c o r d s and d a t a

o f t h e

p a r t n e r s h i p .

14.

B u t l e r

has

duly

performed

a l l

t h e

terms

and

c o n d i t i o n s o f

s a i d

Agreement

on

h e r p a r t agreed t o be performed.

15. B u t l e r

has

r e q ue s t e d o f de fendan ts i nf o rma ti on

r e g a r d i n g p a rt ne rs h ip t ra n s ac ti o ns and has

requested

an

examinat ion o f th e


books, r e c o r d s

and d a t a a l l

o f

which

has been r e f u s e d .

16.

Defendants have breached

t h e i r

f i d u c i a r y

duty t o

B u t l e r by

s u b s t a n t i a l l y exc lud ing h e r

from


a f f a i r s

i n c l u d i n g

conceal ing

i n f o r m a t i o n concerning th e s a l e

o f t h e

p a r t n e r s h i p a s s e t s .

17. By reason o f d ef en d a nt s a c t i o n s regarding a s a l e

o f t h e

p a r t n e r s h i p a s s e t s which

would r e s u l t

i n

a

t r a n s f e r of

t h e p r t n ~ s h i p books and r e c o r d s t o t h ir d p a rt ie s B u t l e r w i l l

f o r e v e r be prevented

from

determining whnt amounts are owing t o

h e r as a p a r t n e r f o r t h e p a s t t e n y e a r s o f t h e

p a r t n e r s h i p s

o p e r a t i o n and t h e

t r u e

v a l u e

o f

h e r


i n t e r e s t .

18. B u t l e r has no adequate remedy a t law.

WH R FOR

BUTLER

demands

t h a t

ju dgment b e

e n t e r e d :

1 g r a n t i n g

a

temporary

r e s t r n i n i n g

o r d e r p r e l i m i n a r y

and

permanent

i n j u n c t i v e r e l i e f b a r r i n g defendants

from

th e s a l e

o r

t r a n s f e r o f t h e

p a r t n e r s h i p a s s e t s ;



(2)

di rec t ing

t h a t an

account

be

taken o f

the

a f f a i r s

o f the

pa r tne r sh ip and t h a t defendants b e comp elle d to

de l ive r

o r make ava i l ab l e

to But le r

a l l par tnersh ip books

and

records fo r

he r

i n spec t ion

(3) gran t ing such o the r and

fu r the r r e l i e f as t h i s

Cour t may deem j u s t

and

proper t oge the r with

an

award o f

fees

cos t s

and

disbursements .

Dated: June

26, 1987

MILBANK

TWEED

H DLEY

McCLOY

1

Chase

Manhattan Plaza

New

York,

N.Y. 10005

(21 )

530-5000

Atto itleys

fo r P l a i n t i f f

Donna

Sturman

But ler

- 5 -



PARTNERSHIP AGREEJ.:ENT - THE

PELHA. 1

RACQUETBALL

HEALTH CLUB

AGREEMENT made

as of Dc c.hlDe,.

1978

flmon :

HOW R P.

STURMAN

of

200

North

Columbus Avenue, Mount

Vernon New

York ONN A.

STURMAN of

40 East

68th

Street

New York, New York BRUCE D. STURMAN

of

200 North Columbus

Avenue, Mount

Vernon New

York and

W YNE

A. STURM N

of

30

East 65th Street New York, New York, collectively referred

to as

the part ies and/or partners.

The

part ies

agree

as

follows:

1. Formation

name and

business:

The parties

hereby

form a

partnership under the

name

THE

P L ~ ~

RACQUETBALL HEALTH CLUB to engage

in the

o w n e r s h ~ ? rnanage-

ment operation sale and

other dealings

with respect

to

racquetball

courts and re la te d sp orts health and appurtenan:

f i l i t ies t premises

located a t 6 8

Pelham Parkway,

P e l h a ~

Hanor

New

York. The

principal o ffice sh all be located at

200 North Columbus Avenue,

unless the

partners

agree

o t h e ~ · i s e

2.

Term: The

partnership

shal l

begin

on Decenber

1978 and shal l continue unt i l December 31 1998 unless terminatec

prior t he re to cons is ten t with

the p ro vis io ns o f

this

agreerr.ent.

3.

Original

capita l :

The ori gina l cap it al of the

partnership

shal l

consist of

1 ;00

cash to be

contribu:ec

as

follows:



HOWARD

P. STURMAN

DONNA

A STURMAN

BRUCE D STURMAN

WAYNE A STURMAN

~ C

c.JO

6 ; C.

i ;.;

' J()O,

2 0

J

4. Capital accounts:

A capital

account

shall be

maintained for each

par tner which

shal l

eonsisr D f

his frac

t ional in teres t

in the original

capi tal

of

the

~ r t n e r s h i p

a increased

by

h is a dd itio na l contributions to capi ta l

and by his

share

of

partnership profi ts , and b

~ e c r e s e d

by

distributions

to

him in reduction

of

partnership capital

and by his share

of partnership

losses charged to

his

capita l

account.

5. In teres t : No in teres t

shal l

be paid

to

any

partner on

his capita l

account or on any undistributed

partnership

prof i t s

6. Prof i t and

loss

and voting: The

net

profi ts

0:

the

partnership shal l be divided

and the net losses

shall be

borne

in the

following

propoYtions:

HOWARD

P. STUR IAN 30

BRUCE D T U } ~ 30

DONNA A STURMAN 20

WAYNE

A

T U } ~ 20

In any

matter

requir ing consent

of

the partners, a majority of

partners in number, and not in

interes t ,

shall

be

required

for

approval

of

such matters .

7.

Distr ibution:

Distribution

of

prof i t s

i f

any.

shal l be

made

from

time to time

or

a t

such

time

as

a majority

-2-



of

the

partners

shall

direct .

8. Management and o m D e n s a ~ i o n

A.

Any partner

may

elect

to be

part

of the

Management Committee (sometimes called herein

managing

partners ). The Management Committee shall manage the usual

daily business operat ions of the

partnership.

Without l imiting

the gener ali ty o f the

foregoing,

the Management Committee

shall

be

authorized

and

empowered to:

(1)

Operate

any

business

normal

or

customary

for

the

owner

of

a recreational

sports

fac i l i ty similar to that of

the

partnership,

i nc luding , without

l imitation, a pro shop,

vending

machines, le ssons, h ea lth programs, snack

bar,

tournaments ~

o ther s ervic es for users

of the partnership s

faci l i t ies and

to grant concessions for the

above,

including television or

other broadcasting rights;

(2)

Perform any and a l l acts

necessary

or

appro?riate

to the ope ra tions o f the

fac i l i t ies

including, but not limited

to, defending or set t l ing

l i t igat ion

regarding the

partnership;

(3)

Procure a l l necessary in su rance covering the

r isks attendant

upon

operation

of

h e a ~ t h

and

sports

fac i l i t ies

(4) Execute and deliver deeds, deeds of t rus t notes,

leases,

subleases, bil ls of

sale, financing

s

tatemen

ts security

agreements and any and a l l

other

ins truments necessary or inciden

ta l to

the

conduct

of the partnership s

business;

(5) Coordinate a l l

accounting

and cler ical

functions

of

the

partnership

and employ

such

agents and

other

management

or service personnel as may

from

time

to

time

be required to

car ryon the business of the

partnership.

B.

Notwithstanding the generality

of

the

fore

going, the l1anagement Conunitteeshall

not

be empowered without

th e consent of a

majority

in number of the partners to:

-3-



(a) Do

any

act

in contravention

of this

Agreement;

(b)

Except

as

specif ical ly

permitted herein,

se l l or exchange

a l l

or ub::::':: ltially a l l of the partnership 's

assets;

(c) Do any act

which

would make i t impossible

to

carryon

the

ordinary

business of

the partnership;

(d) Confess a

judgment against

the

partnership; or

(e) Possess

partnership property

or

assign any

rights

in specif ic

partnership

property

for other than

a

partner

ship

purpose.

In

consideration for

services

to be

rendered

by

the

Management

Committee,

the members

of

the Management

Committee

shal l be

ent i t led to

receive a sum in aggregate,

equal to

of g=oss revenues from the operation of the partnersh ip business.

The incividual partners on

the

Committee shall

be

ent i t led to

receive such share

of

the aforesaid

aggregate

compensation as

thei= individual compensation,

on the

basis of

agreements to

be ~ o r k out amongst the members of the Committee. from time

to

time,

pursuan t to

which their respec t ive a lloca tions of

required duties wil l be

determined. In

the

event

that

there

is any dispute a t

any

time regarding service on the Management

Committee,

or

allocation

of propor tionate shares

to

individual

members the

partners

shal l forthwith

vote

in favor of hiring

an independent

manager

of the

day-to-day

operation of

the

partnership,

w h i ~ h

manager

shall

be

compensated

on

such

terms

and condit ions

as

the partners shal l approve.



·

I t

is

the intention

of the partners

that member-

ship

in the

Management Committee

shal l require bona fide

effor ts

of those persons

serving

therein, and tha t allocation

of

services

to

be performed, responsibi l i t ies ,

and allocation of

compensation

to the individual members shal l be

based

on exper ience, devot ion

of time as required, and other. equitable

factors.

9.

a n k i ~ n

account in

the name of

the partner

ship shall be

maintained a t

such

bank or banks

as

the partners ,

from time

to

time, shal l

select Signature

of only one

partner

shal l be required on

checks,

notes or in struments o f indebted-

ness in

the

name

of

the partnership.

10. ooks The

partnership

books shall be maintained

at

the

principal office

of

the partnership,

and each partner

shal l

at

a l l

times have

access thereto.

11.

Restrictions on

sale

of partnership interest :

No

partner

shal l

assign,

se l l

t ransfer ,

pledge,

create

a

security in terest in , encumber,

or

in any other manner dispose

of

the whole

or any

par t of

his in teres t in- the partnership

except upon

withdrawal

of a partner as

hereinafter set

out.

12. Withdrawal. a y partner shall have the

r ight

to

withdraw from

the

partnership

a t any

time

upon

writ ten

notice of in te ntio n to withdraw, served upon the other

partners

a t the office of the

partnership

at leas t three months

before

the intended date of

withdrawal.

The

withdrawal

of any p r t n ~

shal l

have

no

effec t upon

the

continuance of the partnership

business. The

remaining partners

shal l have the right ei ther

-5-



to purchase the w i ~ h r w i n g par tn er s en ti re

interes t in

the

partnership

or

to terminate and l iquidate the partnership

business. I f

t he remaining

partners elect

to

purchase the

en ti re in te re st of

the withdrawing

partner,

they

shall

serve

notice

in writing of such

election

upon

the

withdrawing part-

ner at the office

of

the

partnership

within 90 days af ter

receipt of

his notice

of intention to withdraw. I f a rena in ins

partner

shal l not elect to participate in the

purchase

of t h ~

withdrawing

partner s in teres t

he

shal l serve

written

notice

of

his intention not to par t ic ipate

upon the

other partners

at the office of the partnership within 60 days af ter the

service

of

the voluntari ly withdrawing

partner s

notice

of

intention to withdraw.

b Each remaining partner

who elects to

purchase

(hereinafter

a purchasing partner ) the

interest

of

the

withdrawing

partner shal l pay:his proport ionate share

of the

purchase price

(the price to be

determined under Para-

graph 12

(c»).

The purchasing partner s proportionate share

is the rat io of the

individual

purchasing partner s percentage

of

profi ts

and losses in the

partnership (as

set out

in Para-

graph

6 to the

to tal of a l l

purchasing partners

percentage

of

the profi ts and losses

in the

partnership

(as

set out

in

Paragraph 6).

(c) The purchase

price

paid to the withdrawing

partner shal l be

the

greater of the following :

•

The agreed value of

the withdrawing partner

s

6



in te re st in the

partnership fixed by l l of the

partners.

In

no event shall a e r t ~ f i c t e of

Agreed

Value be effective un

less

signed

by

l l

of

the

partners.

The

~ r t n e r s

may

at

~ n y

time execute

a new

Certif icate of Agreed

Value

which shall

automatically

replace

l l prior Cert if ica te s of Agreed Value

and in

no

event shal l any par t .of

the l s t

Certificate of

Agreed

Value be

effective;

or

B

The

i r

market

value

of the withdrawing

pa=tner

ship interest as of the end of the month preceding

the

date of

notice

given

by the

withdrawing

partner under Paragraph 12 a

above.

The ir

market value shall

be determined by

appraisal .

The

withdrawing partner and

the

purchasing

partners

acting as

a group

shal l

each appoint one appraiser who

Shall

in

tu=n

jointly choose one umpire. The

three

appraisers then named

shal l act with

promptness, and the

decision of

any two

as

to

the

fai r

market

value

for the

purchase

price of

the

in teres t

shal l

be binding on the part ies hereto. The fees charged by

the

three appraisers

shal l

be paid

for:

one-half by the

withdrawing

partner

and one-half by the

purchasing

partners

prorated among

the

number thereof .

d

The

purchase

price shal l

be

paid as follows:

Twenty 20 )

percent of the purchase

price

in

cash on the closing

date

of the sale;

B The

unpaid

balance shall be

dividec intc

ten 10)

equal instal lments ,

and each installment

shall

b ~

payable

semi-annually

over the next five 5

years fol lowing

-7-



\

,

. ,

the

closing

date. The obligation for the

unpaid

balance

of

the

purchase price shal l be evidenced by a series of ten 10

promissory notes, each in

the principal

amount of one-tenth

of

the

unpaid balance, each bearing interest at the

rate

of

seven

(7 ) percent

per

annum from date of making, .and shall

provide for accelerat ion

of the

unpaid

balance

in

the

event

of

default of

principal

or interest

on

any note

due,

providin£

any such default

is

not cured within

th i r ty

30 days

fter

the

giving

of

written

notice

of

such

defaul t

by

the

holder

of the

notes to the maker. The notes shal l provide for

repayment at any time, without penalty.

The date

of

the closing

of

the

t rans

action shal l be within sixty 60

days

fter

the

purchasing

partners give notice

of

exercise of the

option

to purchase,

in which

notice the

exact

time

and

place

shal l

be designated

by

the

purchasing

partners.

The place

shal l

be

in

the City

of New

York or

the

principal office

of

the partnership.

e f

none of

the remaining

partners elect

to

purchase

the

in teres t

of

the withdrawing partner, l l the

partners shal l proceed

with reasonable promptness

to l iquidate

the busin ess

of the

~ r t n e r s h i p

All

the

partners,

i n c l u d ~ n g

the

withdrawing

partner,

shal l

share

in

the

profi ts

and

losses

of the business

during the period of

l iquidation

in the

s m

proportions

in which they shared

such

prof i t s

and

losses r ~ r

to withdrawal. The proceeds

of l iquidation

and any

debit

-8-



balances due an d

c o l l e c t e d

from any o f the partners s h a l l

be used and di s t r i but e d.

f i r s t

to

payor

provide

for

the

payment

o f

a l l

partnership

l iab i l i t ies

an d

l iq u id atin g

ex

penses an d obligations and,

second,

to pay the

c a p i t a l

accounts du e to the p a r t n e r s as shown on the books of the

p a r t n e r s h i p ,

13.

Dea th: a) Upon the death o f an y

p a r t n e r ,

the surviving partners

s h a l l

have the

r ig ht e ith er

to

purchase

the e n tire in teres t o f the decedent

in

the p artn er

ship

or to

terminate

and

l i q u i d a t e the partnership

business,

The death o f a p artn er s h a l l

have

no e f f e c t on the co ntin ua

t ion of the


business. I f

the

surviving

partners

e l e c t to

purchase

th e d ec ed en t s interest

they s h a l l serve

notice in ~ ~ i t i n g

o f such

electio n , within

days

af ter the

appointment o f

a

p e r s o n a l

r ep re se nt at iv e o f the

e s t a t e , o r,

i f

a t

the

time

o f

such

e l e c t i o n

no

l eg a l r ep re se nt at iv e

has

been appointed,

upon a n y o n e o f

the

known

l e g a l

h e i r s o f

the decedent

at

the l as t known address o f such h e i r , I f a

surviving p artn er s h a l l n o t e l e c t to p a r t i c i p a t e

in

the

pur

chase o f

th e d ece de nt s in teres t

he

s h a l l serve

w r i t t e n notice

o f h is in ten tio n

not to

p a r t i c i p a t e

upon

the

o t h e r

surviving

partners

a t

the

of f i c e o f th e

partnership within

days a f t e r

the death

o f

th e dec ede nt.

b)

I f an y or a l l

o f

the

s u rv iv in g p a rt ne rs

e l e c t to purchase the

in teres t of

the ~ n t in the

partner

ship,

the

purchase

p r i c e ,

method

of payment and t he p ro po rt io n-

-9 -



·

\

ate share of

the

purchase price to be

paid by each

purchasing

partner

shal l

be

the same as set

forth

in Paragraph with

regard

to the

purchase

of

a

withdrawing

partner s

interest

(c) I f th e surviv ing

partners

do not elect to

purchase the in teres t of the decedent in the partnership; the

surviving partners

shal l

proceed with reasonable promptness

to l iquidate the business of the

partnership.

The surviving

partners and the estate of the deceased

partner

shal l share

in the

prof i ts and losses of the business

during

the period

of l iquidat ion

in

the same proportions

in

which they

shared

such profi ts and losses prior to the death of the decedent.

The proceeds of l iquidation and any

debit

balances due and

collected from any of the partners shal l be

used

and i s t r i ~

buted; f i r s t to payor provide for the payment

of a l l

p r t ~ e r ~

ship l i ab i l i t i es and l iquidat ing expenses and obligations;

second,

to

payor

provide

for

the

payment

of

a l l

obligations

to estates of

deceased

partners; and, thi rd, to pay the capital

accounts due

to

th e surv iv ing

partners.

as shown on

the

books

of

the partnership,

14. Dissolution and Termination: The partnership

shall

be dissolved

and

i t s

business

wound up upon

the

occurrence

of the ear l ies t of the following events:

a

December 31,

1998;

(b) The determination of the parties that the

partnership should be dissolved;

-10-



c)

The insolvency o r bankruptcy of the


d)

The sale or

o th er d is p os it io n

o f a l l

o r

s u b s t a n t i a l l y

a l l o f

th e p a r t n e r s h i p s

a s s e t s ; o r

e) The

death,

incompetency, insolvency or

bankruptcy o f a sole remaining partner.

I f the

p a r t n e r s decide

or i f i t becomes n e e ~ s r y under t h i s

provision to

l i q u i d a t e an d

d i s t r i b u t e

th e

assets of

the corpora

t ion,

th e p ro ce du re

s h a l l

be

th e

same

as tha t

s ta te d in

Paragraph 12 w ith re fe re nc e to termination in the event o f a

p a r t n e r s

withdrawal.

15.

N otices:

Wherever

provision

i s m de in

t h i s

agreement

fo r

n o t i c e ,

such notice s h a l l

be

deemed

to have

been

duly made

given, an d

served

i f mailed by United

States

e g i s t e e ~

M ail, Return

Receipt Requested, addressed to

the party e n t i t l e ~

to

receive such notice

a t th e

a d d r e ~ s o f th e office of the

p a r t n e r s h i p ; provided, however. t h a t each

party

hereto may

change such mailing address

by

giving

each

other party hereto

w ri tte n n ot ic e o f

h is

election

to

change

such

address an d

h is

new

ad d ress.

Except

where otherwise s p e c i f i e d in t h i s

agreement.

an y

n o t i c e ,

offer

o r

acceptance

s h a l l

be

deemed

to

have been

given on th e date on

which

i t was mailed.

16.

Modifications: o m o d i f i c a t i o n , amendment or

waiver

o f th is

Agreement, o r an y p a r t

hereof,

s h a l l

be

v a l i e

-11-



•

or effective

unless

in w ritin g and

signed

by l l partners;

and

no

waiver of

any

breach of condition

of

this

Agreement

shal l

be

deemed

to

be

a

waiver

of

any

other

subsequent breach

or

condition

whether of

l ike

or different nature.

17. Applicable Laws This Agreement

shal l

be

governed by and construed in accordance with the

laws of the

State

of ew York applicable to

contracts

made and to

be

wholly performed within.New York

18. Arbitration:

ny

dispute

arising out

of or

concerning the

in terpretat ion

performance

operation

or

breach of this agreement

will

be submitted to arbitrat ion

in ew

York

City be fore and pursuant to the Rules of the

~ e r i c n Arbitration

Assoc ia tion then obtaining.

19. Counterparts:

This Agreement

may be executed

in counterparts

each

of which shal l be deemed

an original

and ll

of

which

taken

together

s ll

consti tute

one and

the same instrument.

20.

Successors and Ass.igns: This

Agreement

shall

be binding upon

the

parties hereto and thei r respective execu-

tors

administrators

legal

representat ives

heirs successors

and

assigns

and shall inure

to

the benefi t of the parties

hereto

and

except as othenvise provided

herein

to thei r

respective

executors

administrators legal representatives

heirs

successors and assigns.

12



•

·

21. Captions

and

Gender:

All t i t l s and

captions

contained in th is Agreement are for

convenience

only nd

shal l not be deemed par t of

th is

Agreement. he

masculine

gender herein sh l l

include

the masculine nd feminine as

the

text requires.

22. Binding

effect : he

covenants and

agreements

herein contained shal l

extend to nd

be

binding

and obligatory

upon the

parties

hereto and

th ir

respective executors

administrators and successors.

IN

WITNESS WHEREOF the part ies hereto have hereunto

set their hands and seals

l l as

of the d y and year f i r s t

above written.

~ ~ ~ ~

ONN U ~

13



;

•

0

DDENDUM

TO P R T N R S H I ~ GREEMENT OF

THE PELH M RACQUETBALL HEALTH CLU DATEDfd:JI1Ja rj S 1 9 7 l

The undersigned

p a rtie s

to th is addendum h er eb y ag ree

that the

following

provision

is hereby

added to .

the above

agreement:

23. Indemnification.

The pa r t i e s hereto j o i n t l y and severally hereby

agree to indemnify an d hold harmless any managing

partner

o f the P artnership

from

an y l iab i l i ty

l os s

damage cost

o r expenses o f whatever kind or n atu re including

c o u n se lo r

attorneys fees

which

an y managing partner incurs

as

a

r e s u l t of any act or fa ilu re to a c t taken by such managing

partner

in good fa ith in

connection

with the

business

of

the Partnership. The

extent

of the indemnification hereunder

s ha l l be the damage or l iab i l i ty

suffered

by such managing

partner

in

question

less the percentage thereof equal to

such

p a rtn e r s percentage

share of the partnership pr of i t s or losses.

t

is

the

intention of

the

p artie s th at no managing partner

should

incur damages or

l iabi l i t ies

geyond such managing p a rtn e r s

pro rated

share

thereof based on

h is or her

respective

percentage



I

.

.

1

in

sharing

of Partnership

proffts

or losses

IN WITN SS WHtR OF

the parties

hereunder have

executed this document the /5- 1 day of February ~ 9 7 9

A 1 W 2 ~

· LH\ IJl

.

2



•

•

.

SUPREME OURT OF THE

STATE

OF

NEW YORK

OUNTY OF

NEW YORK

DONN STURM N BUTLER

Plaintiff

against

HOW RD

STURMAN

BRUCE STURM N and

W YNE

STURMAN

Defendants•

SUMMONS

ND COMPLAINT

MILBANK TWEED

HADLEY

Ml<CLOY

H SE M NH TT N PL Z

NE W YORK N Y 1O l<

2 2 · ~ 3 · r i O O O

ATTORNEYS FOR

Donna

Sturman Butler

)

)



xhibit



COUNTY OF NSH

YORK

..... : _ . - ~ . _

I

- -

II ONN

- - - - - - - - - - - - x

STUN 1AN BUTLER,

Pla in t i f f

-

against

-

SUMMONS

Index

No.

15379/87

HOWARD

S ~ ~ ~ J Individual ly

and

a s Execu to r-of

the

Estate of

Muriel Sturman, BRUCE

S T U ~ ~ N and

WA lNE STURltTA.. L e t g l

Defendants.

- - - - - - - x

SIR

S

YOU ARE HEREBY S ~ 1 N E D

to answer the complaint

in

th i s

act ion and to serve

a

copy of your answer

upon

the attorneys

for

the pla in t i f f

her ei n w it hi n 20 days a f t e r

the

service

of

th i s

summons,

exclusive of.

the day of

service

or

within 30

days

a f t ~

the

service i s complete i f th i s

summons

i s not

personally

d eliv ere d t o

you

within

the

State

of New

York :

and

in

case

of

your fa i lure to

answer,

judgment wil l

be

taken

against you

by

d efa ult for the

re l i e f

demanded

in

the

complaint.

n

Dated:

New York, New York

July 10, 1987

MILBANK, TWEED,

HADLEY McCLOY

1 Chase

Manhattan

Plaza

New

York,

N.Y. 10005

212 530-5000

Attorneys

for

Pla in t i f f

Donna Sturman

Butler



i

I.

I

SUPREME COURT OF THE STATE OF NEW

YORK

COUNTY

OF NEW

YORK

- - - - - - - - - - - - x

DONNA STURMAN BUTLER

----

la in t i f f

- against -

HOW R STURMAN individually and as

Executor of

the

Estate of Muriel

Sturman,.

BRUCE STURMAN W YNE

STURMAN JOSEPH WARREN as Executor

of

the Estate

of Myriel

Sturman,

6-8

PELHAM PARKWAY CORP. CAULDWELL

MANAGEMENT

CORP.

ANTHONY

J.

GRI

FFEN

CORP.

HP

HOW R CO. H. DEVELOPMENT

CO.

WAYNE ADAM

CORP. and

CORNWALL

ESTATES INC.,

Defendants.

_.---

-

- - - - - - - - - - - - - - x

Index

No.

15379/87

NDED

COMPLAINT

Hon\,Martin Evans

la in t i f f Donna Sturman Butler

( Butler ),

by her

attorneys, Milbank,

Tweed

Hadley'

McCloy

alleges for her

amended

complaint:

THE PARTIES

1. laint i f f

Donna Sturman

Butler is

a

resident of th

State of w York, and curr ent ly r es ides a t

40

East 68th

Street

New

York, N.Y.

2.

Upon information

and

bel ief a t a l l

times

mention

herein, defendants Howard Sturman, Bruce Sturman and Wayne



·

•

Sturman tithe Sturman Brothers

tl

each reside in w

York

County.

The

Sturman

Bro th ers a re

the b ro the rs o f p la in t i f f

3.

la in t i f f

and the

Sturman Brothers

are the

only

children

of

Henry and

Muriel

Sturman,

both

deceased.

la in t i f f

and

the Sturman

Brothers

ar e general

partners and

shareholders

i

numerous family

business ent i t ies lithe Sturman Family

Enterprises ) ,

in clu din g, b ut not l imited

to ,

the corporate

defendants and three

w

York

general

partnerships.

4.

Defendant

Howard

Sturman i s one of

two

Executors o

the

E state of Muriel

Sturman.

5.

Defendant Joseph Warren

i s the

other Executor of

the E state of Muriel

Sturman.

6. Defendant 6-8 Pelham

Parkway

Corp. 6-.8 Pelham )

i s a w York corporation with

i t s principal

place

of

business

200 North Columbus Avenue, Mt.

Vernon, w York.

The

Sturman

Bro th ers a re off icers

and directors of 6-8

Pelham.

la in t i f f

i

a 25 percent shareholder of

6-8 Pelham;

the

Sturman Brothers

ar

the other

shareholders.

7. Defendant Cauldwel l

Management

Corp.

Cauldwell

i s a ~ York corporation with

i t s principal

place of business


Mt.

Vernon, w York.

The

Sturman

Broth ers a re off icers

and

directors

of

Cauldwell.

la in t i f f

e i the r owns out r ight or

has

a benef ic ia l

in teres t

in

25 percent

of the shares of stock of Cauldwell.

The

remaininq

shareholder

2



are

e i the r

the

Sturman

Brothers

and/or

the Estate of

Muriel

sturman.

a Defendant Anthony

Griffen

Corp. Griffen ) is

New

York

corporation

with i t s

principal

of place business

a t

20

North Columbus

Avenue,

Mt. Vernon,

New

York. The

Sturman

Brothers are

off icers

and directors of

Griffen. Pla in t i f f ei th

owns outr ight or

has

a beneficial in teres t in 25 percent of the

shares of

stock

of

Griffen;

the remaining shareholders are the

Sturman Bro ther s and /o r

the E state of Muriel Sturman.

9.

Defendant

P

Howard Co. ( HP Howard )

is

a

New

York

corporation

with i t s

principal

place

of

business

at

20

North Columbus

Avenue,

Mt.

Vernon, New York.

The

Sturman

Brothers are

off icers

and directors of P Howard. Pla in t i f f ow

25

percent

of the shares of stock of P Howard and

the

remainin

sha reho lder s a re

the

Sturman Brothers.

10 . Defendant

Development

Co. ( H. Development )

a

New

York

corporation

with

i t s pr incipal place of business a t


Mt. Vernon, New York. The

sturman

Brothers are

off icers of

Development and the Sturman Brother

and pla in t i f f are directors Pla in t i f f is a shareholder of

Development and

bel ieves her shares of stock to

equal

25

percent

of

a l l

shares;

the

Sturman Brothers are the remaining

shareholders.

11.

Defendant Wayne-Adam

Corp.

( Wayne-Adam )

a

New York

corporat ion with i t s pr incipal place of business at 20

- 3 -



1 1

orth Columbus

Avenue,

Mt

Vernon, ew

York. The

Sturman

Brothers are

off icers

and

directors of Wayne Adam Pla in t i f f

owns 25 percent.

of

the shares

of

stock

of

W a ~ l e A d a m the Sturm

Brothers are the

remaining

shareholders.

12 . Defendant Cornwall

Estates,

Inc. ( Cornwall ) i s

ew York corporat ion with i t s principal

place of

business

locate

a t 200

North

Columbus Avenue, Mt

Vernon, ew York.

The Sturma

Bro th ers a re off icers

and directors

of Cornwall.

Pla in t i f f

own

25

percent

of

the

shares of stock of

Cornwall;

the

Sturman

Brothers are the

remaining

shareholders.

Creation of The

Sturman

Family Enterpr ises

13 . Henry Sturman

died

in 1973. Prior to h is death,

Henry Sturman acquired

the

assets which comprise

the

vast

maj

ori

ty of the

presel .t

holdings of

the Sturman ent i t ies Unde

tl,e Last Will and Testament

of

Henry Sturman, Muriel Sturman

wa

beqL1eathed the fr lct_ional

hare of

the residtlary

es ta te which

e ~ l a l l e d

the

maximum

estate

tax

mari ta l

deduction

allowable

in

determining federal esta te tax. The

residue

of t he p rope rt y,

both real and

personal , was

bequeathed

to

pla in t i f f and

the

Sturman Brothers

in equal

shares, s t i rpes

14.

Upon

information and

bel ief

the Last Will and

Testament

of Henry Sturman

was

submitted for

probate

in

Surrogate s

Court,

Westchester

County,

in 1973.

Upon the de ath

of

Muriel

Sturman,

defendant

Howard

Sturman succeeded

her as

a

4



executor.

Upon

information an d bel ief th e esta te o f Henry

Sturman has n ot been c lo se d .

15.

Muriel

Sturman died

in 1980. Under

the

Last

Will

an d

Testament

o f

Muriel

Sturman a l l

o f

h e r

p ro p e rt y

was

bequeathed

to t es ta m e nt ar y T r u st e es to

d iv id e i n t o four

equal

s ep ar at e T ru st s fo r th e b e n e f i t

o f pla in t i f f

an d the

Sturman

B ro t h e rs .

Defendant Howard

Sturman

i s one o f

th e

two

Trustees

an d one o f th e

two

Executors. Defendant Joseph Warren is

the

o t h er Tru s t e e an d

Executor.

16.

The

La s t

Will

an d Testament o f Muriel Sturman

was

submitted fo r probate in S u r r o g a t e s Court

ew

York County in

1980.

The esta te o f Muriel

Sturman has

no t

been c l o s e d .

The

P a r tn e r sh ip s

17.

The

Sturman Family E n t erp ri s es

include in

a d d itio

to a t lea s t th e seven c o r p o r a te defendants a t

leas t

th r e e ew

York

g e n e ra l

p a r t n e r s h i p s

in

which p la in ti f f is

a

general p a r t n

along with th e

Sturman

B ro t h e rs .

18 .

Pla in t i f f

i s

a

g e n e ra l

p a r tn e r in

Pelham

Racquetball an d

Health

Club

d / b / a

M e t r o f i t

A t h l et i c Club o f

Pelham

which

o p e r a te s

a

racq u et b al l an d h e a l t h club lo c a te d a

6- 8 Pelham Parkway

Pelham Manor ew York. n

o r

about

December 1 1978

p l a in t i f f

e n te r e d

i n t o a p art n ers h i p

agreemen

with th e Sturman

Brothers who

a re the o th e r g e n e ra l

p art n ers .

Although th e p a r t n e r s h i p agreement

i n d i c a t e s tha t

th e p la in t i f f

5



i n t e r e s t

i s

percent

p l a i n t i f f

believes t h a t

her

r i g h t f u l

share i s 2S percent.

19 . P l a i n t i f f i s a general

par tner in Pelham

Associates

and

her

par tnership

share

i s

2S

percent.

The

other

general partners are

the

Sturman Brothers.

20 . P l a i n t i f f

i s

a general

par tner in

Yorkville

Associates

which owns and

operates

valuable

rea l e s t a t e locate

in Manhattan. P l a i n t i f f s i n t e r e s t i s 25 percent

although

5

percent of p l a i n t i f f s i n t e r e s t may

s t i l l

be held by the

Estate

of Muriel Sturman in which

case

p l a i n t i f f has a beneficial

i n t e r e s t

in

t h a t

5

percent.

Each

of the

Sturman

Brothers

has

a

i n t e r e s t i d e n t i c a l

to

t h a t of p l a i n t i f f ; the Estate of

Muriel

Sturman may hold a 20

percent i n t e r e s t .

The

Sturman

Brothers Wrongful

Acts

- / In Ope ra tin g the

Sturman

Family Enterprises

21. The Sturman Family Enterprises are control led

exclusively by the Sturman Brothers and operated from

headquarters

located

a t 200 Columbus Avenue Mt Vernon ew

York.

22. Upon information and

b e l i e f

the

Sturman

~ r o t r s

t r e a t the Sturman Family Enterpr ises as one business and as

s e

f o r t h below ignore the d i s t i n c t i o n s between th e v ar io us

defendant

corporat ions

and par tnerships in

dealings

with

themselves

and

with p l a i n t i f f .

6



23. Upon information and bel ief the Sturman

Brothers

cause the Sturman Family

Enterprises as

well

as

other

ent i t ies

i n which the

sturman

Brothers wrongfully

have

excluded pla in t i f

to

engage

n

an

extraordinary

number

of

in ter en t i ty

t ransact ions .

Upon information and

bel ief

a t l eas t

one

of

the

purposes of these

t ransact ions

is

to deny

pla in t i f f her

r ightfu

share n the prof i t s of the Sturman Family

Enterpr ises .

24 .

Upon

information and

bel ief

the

Sturman

Brothers

who control

the

corporate

defendants do

n ot fo llo w procedures

corporate governance

required under w York law

such

as holdi

meetings of

shareholders

v n

notice of meetings

of

shareholders maintaining

proper

corpo ra te records

sending

f inancial

statements to

shareholders .

or

maintaining updated

s to ck r ec or d books.

Rather

the

Sturman Brothers t r ea t

the

Sturman

Family Enterprises

as par t

of one big

family business

a family

business

from which they exclude pla in t i f f .

25 . Upon information ana

bel ief the

Sturman Brothers

have for

the i r own

personal

accounts

engaged n t ransactions

w

t he c or po ra te defendants on

other

than an arms length

basis

to

the

pre judice

of

the

corporate defendants.

26.

Upon

information

and

bel ief one

reason

tha t the

Sturman

Brothers conduct the

business

of the Sturman Family

Enterprises n th is manner

i s to deprive

pla in t i f f

of her r igh

7



l·

.

•

~

Sturman Brothers Total Exclusion

of

P l a i n t i f f from

the

Sturman

Family Enterprises

27 . For a t

l e a s t the

pas t ten (10) years, the Sturman

Brothers

have

i n t e n t i o n a l l y excluded p l a i n t i f f from the

governance,

management,

a f f a i r s

and

her r i g h t f u l

share of

p r o f i t s of the

Sturman

Family

En te rp ri se s, desp it e p l a i n t i f f s

express desire and e f f o r t s to play an active role in

the

a f f a i r

of the Sturman

Family

Enterprises.

28. Upon

information and b e l i e f the Sturman Brothers

have

excluded p l a i n t i f f for

the

purpose

of permit t ing the

Sturm

Brothers to

obtain

excessive remuneration for themselves from t

Sturman

Family Enterpr ises

to

th e det riment

of

p l a i n t i f f

and th

Enterprises.

Upon information

and

b e l i e f

t h i s

excessive

remuneration includes, but i s not l imited

to , x t r o r ~ i n r y

management

fees

paid to the Sturman

Brothers ,

extraordinary

t r a v e l

and

entertainment

expenses incurred by the

Sturman

Brothers which

were

paid for by the Sturman Family Enterprises,

as

well

as

payment

of

extraordinary

personal

expenses.

29.

The

above-mentioned a c t i v i t i e s

of the

Sturman

Brothers

have

prejudiced p l a i n t i f f and the Sturman

Family

Enterprises. For the

pas t

ten years, the Sturman Brothers

have

caused the Sturman

Family

Enterprises c o l l e c t i v e l y to make

d i s t r i b u t i o n s

of a t

f i r s t 2,000

and

then, 3,000 per month, to

p l a i n t i f f .

The

amount of

the monthly d i s t r i b u t i o n to

p l a i n t i f f

does

not

vary.



fj

30.

•

la int i f f

does

n ot re ce iv e

notice

of

annual

meetings of the shareholders of the corporate defendants;

pla in t i f f

does not receiv e notice of any specia l

meetings

of

shareholders;

pla in t i f f

has never

been

p rovided with

annual

f inancial

statements of th e corpo ra te defendants; and pla in t i f f

has not

been

p rovided with notice of par tnership meetings or

be

consulted with respect to par tnership

decisions.

The

Sturman

Bro ther s permit pla in t i f f no

knowledge about the Sturman Family

Enterpr ises. They

d ep riv e h er

of the par t ic ipa t ion in

managem

to

which

she i s

ent i t led

by

law:

31.

Upon

information

and

bel ief in the past the

Sturman Brothers

have caused

the

Sturman Family Enterprises

to

engage in many

extraordinary t ransact ions without

any notice to

pla in t i f f including

but not

l imited

to

th e possible

l iquidat ion of Cornwall Estates Inc.

The Sturman

Brothers

w Scheme

32.

In

January

1987

pla in t i f f and

her

representat iv

commenced

discussions

with the

Sturman Brothers and

the i r

representat ives for the purposes o f p rovid ing pla in t i f f with

information

to

which she i s legally ent i t led re la t ing

to

the

Sturman

Family Enterpr ises

and

has never

received.

33.

la in t i f f

and

the

Sturman Brothers

reached an

agreement

se t

forth

in a l e t te r dated February

9

1978.

Under

the

terms

of

the

agreement

the

Sturman

Brothers

were

obligated

9



to provide

p l a i n t i f f immediately

w ith o rg an ic

documents

f o r each

Sturman Family

E n t erp ri s e as w ell as

documents r e f l e c t i n g t i t l e

to

a l l p r o p e r ty owned In

a d d i t i o n the

Sturman Brothers were

o bli ga te d t o

provide

p l a i n t i f f

immediately

with copies o f

ta x

r e t u r n s an d e x i s t i n g f i n a n c i a l statements

for

each Sturman

Famil

E n te r p r ise

fo r

th e p a s t th r e e years. n o r before A pril 15

1987 th e Sturman Brothers were

o b lig a te d

t o provide p l a i n t i f f

with 1986 ta x r e t u r n s an d

expanded

f in a nc ia l r ep or ts

fo r each

e n t i t y . The Sturman Brothers were al s o

o b lig a te d

to provide

p l a i n t i f f

an d h er r e p r e s e n t a t i v e s

a t

h er re qu est

access

to th e

books

an d

records o f an y S tur ma n Family E n t i t y .

34. The Sturman Brothers f a i l e d t o t a l l y to

comply

with

th e l e t t e r

o r

s p i r i t o f t h e i r February 9 1978 agreement.. They

p ro vid ed v er y few

documents to

p l a i n t i f f an d then only when

the

wanted

to .

In d i cat i v e

o f t h e i r

r esponse

was

th e r e p r e se n ta tio n

to th e p l a i n t i f f s r e p r e s e n t a t i v e s t h a t th e r e

were

no

e x i s t i n g

f i n a n c i a l

s t a t e m e n t s

fo r th e

Sturman

Family

E n te r p r ise s

The

f a l s i t y

o f

the Sturman rep res en t at i o n s to

p la in ti f f i s

demonstr ated by th e f a c t

t h a t

th e

Asset

Purchase Agreement fo r

Pelham Racquetball an d Health Club dated ay 1 1987 s t a t e s

t h a

Pelham Racquetball an d Health Club d e liv e r e d to th e purchaser

a u d ite d balance s h e e t s o f

Pelham Racquetball

and

Health Club and

o f

defendants

6-8 Pelham Parkw ay C orp. as

o f

December 31 1986

1985

an d 1984 an d

r e l a t e d

a u d ite d

s t a t e m e n t s

o f

o p e r a tio n s

sto c k h o ld e r s

eq u i t y an d

chanqes

in f i n a n c i a l

p o s i t i o n .

10



. .......

t

.

35. se v e r a l

occasions

June o f

1987 p l a i n t i f f s

rep res en t at i v es

were

permitted to v i s i t th e h ea dq ua rt er s of the

Sturman Organization to review p ie c e s o f paper p u r p o r t e d l y

c o n s t i t u t i n g

th e

books

an d

records

o f

defendants

Wayne Adam

Cauldwell an d

A.J.

G ri ffe n .

The books

an d

records

provided had

s i g n i f i c a n t gaps including fo r example th e lack o f gener al

l e d g e rs and documentation to

support

extensive i n t e r - e n t i t y

t r a n s a c t i o n s .

The

char ade o rch es t rat ed by the

Sturman Brothers

i s b e s t demonstrated

by the

f a c t t h a t during t h i s

period the

i n d i v i d u a l

defendants

c o v e r tly

were

n e g o tia tin g

and/or

had

e n t e re d

in to c on tr ac ts to s e l l

th e

a s s e t s o f th r e e Sturman Fami

E n te r p r ise s

- -

Pelham c ~ ~ e t b l l an d Health Club A.J. G ri ffe n

and Pelham Associates

- -

behind th e back o f th e p l a i n t i f f

36.

Upon

information and b e l i e f the Sturman

Brothers

r e a l i z e d

the f i r s t h a l f o f

t h i s

year

t h a t t h e i r scheme of

excluding

p l a i n t i f f

from the flow

of

information business

a f f a i r s and p r o f i t s o f

th e

Sturman Family E n te r p r ise s

was

drawin

to an end.

37. I n an

attempt t o s e c r e t e from

p l a i n t i f f

knowledge

of

the Sturman

B ro t h e rs

a c t i v i t i e s breach o f

t h e i r

.. f id u c ia r

d u t i e s

th e

Sturman Brothers

e mb ar ke d u po n a

plan to

s e l l

the

a s s e t s o f th e Sturman Family E n t i t i e s an d to c u t o f f a t th e

pas

p l a i n t i f f s r i g h t to have th e Sturman

Brothers

account fo r t h e i

a c t i v i t i e s

o f th e p a s t te n y e a rs .

Upon information

an d b e l i e f

th e

Sturman Brothers p la n to d i s p o s e imminently o f the as s et s o



t

t

the

Sturman Family

Enterprises

and

to

do so

without te l l ing

pla in t i f f

38 .

In

addition

upon

information

and bel ief the

Sturman

Brothers

wish

to hide the

deta i l s

of the

asset

sales

fro

pla in t i f f because various aspects of the t ransact ions could not

withstand scrut iny.

39. Pla in t i f f obtained the f i r s t glimmer of the Sturma

Brothers unlawful

scheme when

p la in t i f f

heard a

rumor tha t the

assets of

the

Pelham Racquetball and Health Club may have

been

sold. I f

pla in t i f f

had

not

heard th i s rumor pla in t i f f

would

never

have

learned of

th i s

t ransact ion

or

two

others entered

int

by the

Sturman Brothers

behind her back.

40. pon information and

bel ief

the

Sturman

arothers

are

embarking on a plan

to

covert ly se l l the

assets

of the

Sturman

Family Enti t ies

and

to obtain

personal

benef i t s from a t

leas t

some

of these t ransact ions

derogation

of the i r f iduciar

dut ies to pla in t i f f

41.

pon

information

and

b elie f a t le as t

some

of the

asse t sa le

t ransact ions entered

into by the sturman

Brothers

and

which may

be entered

into

in

the

fu ture are

not

arms-

length

t ransact ions and

are in

breach of

the sturman Brothers

f iduciary

dut ies

to

pla in t i f f

12



I

I

•

FIRST USE OF TION

42.

Pla in t i f f

repeats and

realleges paragraphs

through

41.

43.

Upon

information

and

bel ief

at

a l l

times

during

the

past six

years and

up

to the present time .the

Sturman

Brothers had exclusive charge and access to

the

books

of

accoun

records and

data

of

the

Pelham Racquetball and Health Club

( Pelham Racquetball ).

44. Pla in t i f f has

duly

performed

a l l

the terms

and

conditions of her obl igat ion as a partner .

45. Pla in t i f f

has requested

of

the

individual

defendants information

r eg arding th e

t ransact ions

of

Pelham

Racquetball and has

requested an

examination

of Pelham

Racquetbal l s books, records and data,

a l l of

which have been

refused.

46 .

The Sturman

Brothers

breached and

wil l

continue

t

breach the i r s tatutory duty to pla in t i f f

by fa i l ing

to provide

unimpeded access

to a l l of the

partnership books.

47. The Sturman Brothers

breached

and will continue t

breach the i r

s ta tu tory duty to

pla in t i f f

by

excluding

her from

partnership affa i rs

48 . Upon information and bel ief the Sturman Brothers

breached the i r

f iduciary

duty

to

pla in t i f f

by

excluding

her

fro

p ar ti ci pa ti ng i n

the prof i t s of Pelham Racquetball , by

appropriating for themselves personally opportun it ies

r ightfu l l

13



i

t t

t

belonging

to Pelham

Racquetball,

and

by entering

into

transact ions on behalf of Pelham Racquetball for t h e i r

personal

benefi t and to the detr iment

of

the i n t e r e s t s

of

p l a i n t i f f .

49 .

n June

24, 1987,

counsel

for

p l a i n t i f f

learned

from counsel for

defendants t h a t the partnership

assets

m y

hav

been

sold.

But le r s counsel

discovered

t h i s t ransact ion

only

a f t e r

d i r e c t l y

inquiring about

i t .

50.

Counsel

for the

defendants

has indicated

that the

purchase

price

for the Pelham Racquetball Club i s 1,500,000,

with

the partnership taking back a l l paper and the f i r s t paymen

being made

988

51. In l a t e

1986,

one of the

Sturman Brothers

offered

to buyout p l a i n t i f f s i n t e r e s t i n the

partnership,

which the

Sturman Brothers

contend i s 20

percent, for 900,000.


have

breached t h e i r fiduciar

duty

to p l a i n t i f f by

entering into

a t ransact ion concerning the

sale

of a l l partnership assets

without

notice to her.

53. Upon information and b e l i e f the Sturman Brothers

have

breached t h e i r f iduciary duty to p l a i n t i f f by entering

int

a sa le

of assets

which

i s

not a arm s-length

t ransact ion.

54.

he

Sturman Brothers have breached t h e i r

fiduciar

duty to p l a i n t i f f by substant ia l ly excluding her from the a f f a i

of

Pelham Racquetball, including concealing information

concerning

the sale

of par tnersh ip assets .

14



•

•

I

55.

y r eason o f th e sturman Brothers plan to c o v e rt l

s e l l

a l l o f th e a s s e t s o f Pelham Racquetball w hi ch w oul d r e s u l t

i n

th e

t r a n s f e r o f p a r tn e r sh ip books an d r ecor ds to t h i r d

p a r t i e s

p l a i n t i f f

w i l l

fo re v e r

be

prevented

from

deter mining

what amounts a re owing to h e r as

a

p artn er fo r the p a s t te n year

o f th e p a r t n e r s h i p s

o p e ra t i o n

an d the t ru e value o f

h e r

i n t e r e s t s

in

th e p a r t n e r s h i p .

56.

P l a i n t i f f has no adequate

remedy a t

law.

SECOND C USE OF CTION

57.

P l a i n t i f f

r e p e a ts

and

r e a l l e g e s par agr aphs

1

thr ough

56.

58.

Upon information

an d b e l i e f a t

a l l times during

th e

p a s t te n years and up to

th e

p r e s e n t time the Sturman

Brothers

had e x c l u s i v e

charge

an d

access t o

th e

books

o f

accoun

I records and

d a ta o f

Pelham

A s s o c i a t e s .

59.

P l a i n t i f f

has du ly

performed

a l l

the terms an d

c o n d itio n s o f h e r

o b l i g at i o n

a s

a p a r t n e r .

6 P l a i n t i f f h as r eq ue ste d o f th e

i n d i v i d u a l

defendants in fo rm atio n r eg ar din g t he

t ran s act i o n s

o f

Pelham

A s s o c i a t e s

and has

requested an

examination

o f Pelham A s s o c i a t e

books re c o rd s

and

d a t a

a l l

o f w hich have been refused.

61. Th e Sturman B r o t h e r s

br eached and w i l l continue t o

breach t h e i r s t a t u t o r y d u t y t o

p l a i n t i f f

by

f a i l i n g

to p r o v i d e

unimpeded

access

to

a l l

o f th e

p art n ers h i p

books.

15



•

62.

The

Sturman Brothers breached

and will

continue t

breach

t h e i r s t a t u t o r y

duty

to

p l a i n t i f f by excluding

her from

partnership a f f a i r s .

63.

Upon

information

and

b e l i e f

the

Sturman

Brothers

may

have breached t h e i r fiduciary duty to

p l a i n t i f f

by

excludin

her from p a r t i c i p a t i n g in the p r o f i t s

of

Pelham Associates by

app rop ri at ing f or themselves

personal oppor tuni t ies

belonging

t

Pelham Associates

and

by

entering

into

transactions

on

behalf

Pelham Associates

fo r t h e i r

personal

benef i t .

64 . The

Sturman Brothers have breached

t h e i r

f iduciar

duty

to

p l a i n t i f f

by ente ri ng in to

a t ransact ion

concerning the

sale

of

partnership assets without

notice to

her .

65.

reason

of the Sturman Brothers act ions

regarding the

sale

of the partnership assets which would r e s u

in

the t r a n s f e r of

partnership

books

and

records to t h i r d

p a r t i e s

p l a i n t i f f w i l l forever

be

prevented from determining

what amounts

are

owing

to her

as a partner

for the

past

ten

ye

of

the p a r t n e r s h i p s operation and

the

t rue value

of

her

partnership i n t e r e s t .

66 . P l a i n t i f f has

no adequate remedy a t

law

THIRD CAUSE OF ACTION

67.

P l a i n t i f f

repeats

and

r ll g s

paragraphs

through 66 .

16



68 Upon information and

bel ief

a t

a l l

times during the

past

ten

years and

up to

the

present

time

the

Sturman

Brothers

had

exclusive charge and access

to

the books of account records

and

data

of

Yorkvil le Assoc ia tes.

69. Pla in t i f f has dUly

performed a l l

the

terms

and

conditions of her obligation

a partner.

70.

Pla in t i f f has

requested

of the

individual

defendant s i nforma ti on regarding the transactions of Yorkville

Associates and

has requested an examination

of

Yorkville

Associates

books

records and

data a l l

of

which have been

refused.

71.

The

Sturman Brothers breached the i r sta tutory duty

to

p la in t i f f

by

fa i l ing to provide unimpeded access to

a l l

of

the

partnership

books.

72. The Sturman Brothers breached the i r f iduciary duty

to

p la in t i f f

by

excluding her from partnership

affa i rs

and wil l

continue to

exclude

p la in t i f f

in

the future un less the Court

grants

the

re l i e f

requested.

73 .

Upon information and bel ief the Sturman Brothers

may have breached the i r fiduciary duty

to

p la in t i f f by excluding

her

from

part ic ipat ing

in the prof i ts of

Yorkvi l le Associates by

app rop ri at ing fo r themselves persona lly oppor tun i ti e s r ight fu l ly

belonging to

Yorkville

Associates and

by entering

into

transact ions

on behalf o f Yorkvil le Assoc ia tes for the i r persona

benef i t

and

to

t he det riment

of the

in te res t s

of

p la in t i f f

7



74 .

y reason

o f

the Sturman B ro t h e rs a c tio n s

pla in t i f f w i l l

fo re v e r be

prevented from determining what amou

are owed to

h e r

fo r

the

p a s t ten years an d from part icipating i

f u tu r e p art n ers h i p d e c isio n s.

75 . la int i f f

has

no adequate remedy a t law.

FOURTH C USE OF CTION

76. la int i f f r e p e a ts and real l eg es par agr aphs

thr ough 75.

77. Upon

information

an d bel ief

fo r the

p a s t

te n

yea

th e Sturman

Brothers have

ignored

c o rp o ra t e r equir ements forms

and

governance

in

d e a lin g

with pla in t i f f and th e Sturman

Family

E n t erp ri s es . The Sturman Brothers

have disregarded ent i re ly th

in d iv id u a l c o rp o ra t e

s t r u c t u r e s an d

ident i t ies

an d

have

t ra n sf er re d f re e ly funds among

th e

c o r p o r a tio n s an d

p a r tn e r sh ip

y

re fu sin g to obser ve the requis i te c o rp o ra t e

fo rmal i t i es

the

ac t ivi t ies with

r e sp e c t to th e c orp ora tio ns m irror

the i r condu

with

re sp e c t to the

p a r t n e r s h i p s .

78 .

Because o f

th e course

o f d ealin g

by the Sturman

B ro t h e rs t h e dis t inct ions

between

th e c or po ra te

ent i t ies and

t

p art n ers h i p s should

be d i s re g a rd e d

with

re sp ect to

pla in t i f f an

th e

Sturman

B ro t h e rs .

79. la in t i f f seeks

a

d e c l a r a t i o n tha t with r e sp ec t

h e r th e c o u rt d e c la re tha t th e c o rp o ra t e

defendants

be

deemed

c o ns tr u ct iv e p a rt ne r sh i ps .

18



•

•

80

through 79

FIFTH

USE OF TION

la in t i f f repeats

and

real leges paragraphs

81

Upon

information

and

bel ief

the

Sturman

Brothers

who

allegedly are

officers and directors

of

A J

Griffen

Corp

have fa i led to observe the requisi te legal requirements

concerning

corporate management

and

operations

in the i r

dealings

with pla in t i f f and

have

t reated A J Griffen i f were a

partnership

82 The Sturman Brothers have never p rovide d p la in t i f f

with

notice of shareholder

meetings

or

extraordinary t ransaction

entered into

by

A J Griffen

83

At

a l l re levant

times up

to the present

the

Sturman Brothers had exclusive charge

and access

to the books of

account

records and

data

of A J Griffen

84 l a in t i f f has requested

of

the Sturman Brothers

informat ion regard ing

t ransact ions

of

A J Griffen and requested

an examination of

the books

records and data

Only

extremely

l imited documentation was provided and the Sturman Brothers

hav

refused

to provide pla in t i f f with meaningful information

85 The

Sturman Brothers have

breached

the i r

fiduciary

duty as constructive

general

partners

of

pla in t i f f by excluding

her

from

the a f fa i r s

of

A J Griffen

including

concealing

information

concerning

the

sale of

i t s

assets

and by

19



/

•

•

•

appropriating for

themselves personally

opportunities r ightful ly

belonging

to A.J. Griffen.

86.

y

reason of


actions,

pla in t i f f

will

forever

be

prevented

from

determining

what amoun

are

owed

to

her

for

the pas t ten years, and

from

pa rt ic ip a ti ng i

future business

decisions.

87. Pla in t i f f has no adequate remedy a t law.

SIXTH

C USE OF CTION

88.

Pla in t i f f

repeats and real leges paragraphs

1

through

87,

89.

Upon information

and bel ief the Sturman

Brothers

who al legedly are off icers

and

,d ire ct or s o f

Wayne Adam

Corp.

( Wayne-Adam ), have fai led

to

observe

the

requisi te l egal

requirements

concerning

corporate management

and

operations in

the i r dealings with

pla in t i f f and

have

t reated Wayne Adam

as i f

were

a

par tnership,

90.

The

Sturman

Brothers

have

never

provided

pla in t i f

with

notice of shareholder meetings or

extraordinary

t ransact io

entered

in to by

Wayne Adam.

91. At a l l re levant times

and

up to the present, the

Sturman Brothers had exclusive charge

and

access

to

the

books

o

account, records

and

data of

Wayne Adam.

92. Pla in t i f f has requested of t

Sturman

Brothers

i nformation regard ing

t ransact ions

of

Wayne Adam

and

requested

20



/

I

•

•

•

examination

of the

books

records

and data. Only extremely

l imited documentation

was provided and

the

Sturman

Brothers hav

refused to provide

pla in t i f f with

meaningful information.

93.

Upon

information

and

bel ief

the

Sturman

Brothers

may

have

breached the i r fiduciary duty to

pla in t i f f

by excluding

her from par t ic ipat ing in the prof i t s

of

Wayne Adam by

appropriating

for themselves

persona lly opportunit ies r ightfu l ly

belonging to Wayne Adam and by ente ri ng i nt o t rans ac ti on s on

beh alf of

Wayne Adam for

the i r personal benef i t

and

to the

detriment of the in teres ts of pla in t i f f

94.

The

Sturman

Brothers

breached

the i r

fiduciary

duty

to

pla in t i f f

by

excluding

her from the affa i rs of

Wayne Adam and

wil l

continue

to exclude pla in t i f f

in

the

future unless

the.

Cou

grants

the re l i e f requested.

future business decis ions.

SEyENTH

C USE OF

CTIQN

y

reason

of the Sturman

Brothers

actions

Pla in t i f f

repeats and rea l lege

paragraphs

1

Pla in t i f f

has

no adequate remedy

a t

law.

97.

96 .

95.

through 96.

pla in t i f f

wil l forever be

prevented

from

determining what amoun

are owed to

her

for the pas t ten years

and from

part icipating i

~

98.

Upon

information and

bel ief the Sturman Brothers

who allegedly

are

off icers

and

directors

of

6-8

Pelham Parkway

21



•

Corp. Pelham Parkway ),

have

fa i

led

to observe the requi si te

legal requirements concern ing corporate management and operation

in

the i r

dealings

with pla in t i f f

and have t reated Pelham

Parkwa

as

i f

were

a

par tnership.

99. The Sturman Brothers have never p rovided pla in t i f f

with

not ice of

shareholder

meetings or extraordinary t ransact ion

entered

into by Pelham

Parkway.

100.

At

a l l re levant times and up to

the

present ,

the

Sturman Brothers had exclusive

charge

and

access

to the books o

account, records

and data of

Pelham

Parkway.

101. Pla in t i f f has requested of

the

Sturman Brothers

information regarding t ransact ions

of

Pelham Parkway and

requested an examination of the

books,

records and data . The

Sturman Brothers have refused

to

provide pla in t i f f with

meaningful

information

such as gener al ledger s

and records

support ing in ter -enterpr ise t ransact ions.

102. Upon information and bel ief the Sturman Brothers

may have breached the i r f iduciary duty

to

pla in t i f f

by excludin

her from par t ic ipat ing in

the

prof i t s of Pelham Parkway,

by

app ropr ia ti ng for themselves pe rsona ll y opportuni ti es r ightfu l l

belonging to Pelham Parkway, and by

enter ing

into

t ransact ions

b eh alf of

Pelham Parkway

for

the i r

personal benef i t

and

to the

detriment of the in teres ts of

pla in t i f f .


breached

the i r f iduciary dut

to pla in t i f f by excluding

her

from

the affa i re of

Pelham Parkwa



•

and wil l

continue

to

exclude pla in t i f f

in

the

future unless

the

c ou rt g ra nts the

re l i e f

requested.

104.

The Sturman Brothers

have

breached the i r fiduciar

duty

as

construct ive

general

partners

of

pla in t i f f by

excluding

her

from the affa i rs

of

Pelham

Parkway,

including

concealing

information

concerning

the sale

of

i t s

assets , and

by

appropri at ing for

themselves

persona lly oppor tuni tie s r ightfu l l

belonging

to Pelham

Parkway.

105. y reason

of

the Sturman

Brothers

actions,

pla in t i f f will

forever be

prevented from determining what

amou

are

owed

to

her

fo r

the

past

ten

years,

and

from

par t ic ipat ing

future

business decis ions.

106. la in t i f f has no adequate remedy at law.

EIGHTH

C USE

OF CTIQN

... /

107.

through 106.

la in t i f f repeats and

real

leges

paragraphs

108.

Upon

information

and

bel ief

the

Sturman

Brothers

who allegedly are off icers and directors of Cauldwell

Manageme

Corp.

( Cauldwell ),

have fai led

to observe the requisi te legal

requi rements concerning

corporate

management and

operations

in

the i r dealings with pla in t i f f and

have

t reated

Cauldwell

as i f

were

a

partnership .

23



•

•

109. he Sturman Brothers

have never

provided pla in t i f f

with notice of shareholder meetings or

extraordinary

t ransact ion

entered into by Cauldwe11.

110.

At

a l l

relevant t imes and up to

the

present

the

Sturman Brothers

had

exclusive charge and access

to the

books of

account records and data of Cauldwell.

I l l Pla in t i f f has

requested

of the

Sturman

Brothers

informat ion regard ing

t ra ns ac ti on s o f Cauldwell

and requested

an

examination

of

the books

records and data .

Only

extremely

l imited documentation

was

provided and the

Sturman

Brothers hav

refused to

provide pla in t i f f

with meaningful

information.


bel ief

the Sturman

Brothers

may have breached

t he i r

f iduciary duty to pla in t i f f by excluding

I

her

from

par t ic ipat ing in the prof i t s of cauldwell by

appropriat ing

for

themselves

persona lly oppor tuni ti es

r ightfu l ly

i

I belonging

to Cauldwell

and by enter ing into

t ransact ions

on

behalf of Cauldwell for t he i r personal benef i t

and

to

the

detriment of

the

in teres ts of pla in t i f f

I

113. he Sturman Brothers breached the i r f iduciary duty

to

p l a in t i f f by

excluding her

from

the a f fa i r s of Cauldwell

and

wil l continue

to

exclude pla in t i f f in

the

future

unless the

Cou

gran ts the re l i e f requested.

114. reason of the Sturman Brothers act ions

p l a in t i f f

wil l

forever

be

prevented

from

determining

wha t amoun

24



l

•

J

l

are

owed

to

her for the pas t ten

years,

and from

part ic ipat ing

future

business

decisions.

115. la in t i f f has

no

adequate

remedy

a t

law.

NINTH

USE

OF ACTION

116.

l a in t i f f repeats and rea l leges

paragraphs

1

through

115.

117. Upon information

and

bel ief


who al legedly are off ice rs and

di rec tors of

HP Howard Co.

n

Howard ,

have fa i led

to

observe

the requisi te

legal requiremen

concerning

corporate management and operations

in

the i r

deal ing

IWith notice of

shareholder

meetings or extraordinary t ransact io

;

entered in to

by

HP Howard.

I

I

119.

At

a l l

re levant times and up to

the

present,

the

Sturman

Brothers

had

exclusive

charge

and

access

to the

books

o

account, records and data of HP

Howard.

120.

la in t i f f has

requested

of the Sturman Brothers

i nfo rma tion rega rding t ransact ions of

HP Howard and

requested a

examination

of

the

books,

records and

data.

They have refused

provide any

meaningful

information

or documentation.

121.

Upon

information and

bel ief the

Sturman

Brothers

may

have

breached

t he i r

f iduciary

duty

to

p la in t i f f by

excludin

- 25 -



·

•

I

I

her from par t ic ipat ing in the prof i t s

of

HP

Howard

by

appropri at ing for themselves personally opportunit ies

r igh t fu l l

belonging to HP Howard and

by

ent er ing i nt o tr an sact ions on

behalf

of

HP Howard for the i r personal

benef i t

and to the

d etrim en t of the in teres ts of

pla in t i f f


breached

the i r

fiduciary

duty

to

pla in t i f f

by excluding her

from

the affa i rs of

HP

Howard and

will

continue to

exclude pla in t i f f in

the future

unless the Cou

g rants the

re l i e f

requested.

123. y reason of

the sturman

Brothers

actions,

pla in t i f f will

forever be

prevented from determining

what

amoun

are

owed

to

her

for

the past ten

years,

and from

part icipating

i

future business

decisions.

124.

Pla in t i f f

has no adequate

remedy

at law.

I

125.

through

124.

TENTH C USE OF CTION

Pla in t i f f

repeats and real leges

paragraphs

1

126. Upon information and bel ief the

Sturman

Brothers,

who

al legedly are

off icers

and directors

of

Cornwall

Estates,

Inc. ( Cornwa ll ),

have fai led to

observe

the requis i te

legal

requi rements concerning corporate management

and

operations in

the i r dealings with pla in t i f f

and

have t reated Cornwall

as

i f

were

a

partnership .

26



<

,

•

•

/

.

127. The sturman

Brothers have

never p rovided p la in t i f f

with

notice of

shareholder

meetings

or

extraordinary t ransact ion

entered into by

Cornwall.

128. At

a l l

relevant

t imes

and up

to

the present, the

Sturman

Brothers had exclusive charge and access to the books of

account, records

and

data of Cornwall.

129. Pla in t i f f has requested of


information regarding t ransact ions

of

Cornwall and requested an

examination of the books, records and data.

The

Sturman

Brother

have refused to provide pla in t i f f

with

any

meaningful

information.


may have

breached

the i r

f iduciary

duty to pla in t i f f by excluding

her from par t ic ipa t ing

in the

prof i t s of Cornwall,

by

app ropr ia ti ng fo r themselves personally opportun it ies r ightfu l ly

I

lbelOnging to

Cornwall,

and by

entering

i nt o t ransac ti on s

on

Ibehalf of

Cornwall

for

the i r personal benefi t and to the

de tr iment o f

the

in teres ts of

pla in t i f f

131. The Sturman

Brothers

breached the i r fiduciary

duty

to

pla in t i f f

by excluding her from

the

af fa i rs of

Cornwall and

wil l

continue

to exclude p la in t i f f in the future

u nless the

Cou

grants

the re l i e f

requested.

132. reason

of


actions,

pla in t i f f

wil l forever be prevented from

determining what

amoun

27



I

I

•

I

are owed

to her

for

the

past ten years, and from part icipating i

future business decisions.

133. la in t i f f has

no

adequate

remedy a t law.

ELEVENTH C USE OF CTION

134. la in t i f f repeats

and

real leges

paragraphs

1

through 133.

135.

Upon

information and bel ief the

Sturman

Brothers,

who

allegedly

are off icers

and directors of B. Development Co.

B. Development ),

have

fai led to observe

the

requisi te legal

requirements concerning corporate

management

and

operations

in

the i r

dealings with

p l a in t i f f

and have t reated

H Development as

I

i f were a partnership .

I

136.

The

Sturman Brothers

have never provided pla in t i f

jWith

notice

o f s ha reho ld er meetings

or

extraordinary

t ransaction

ilentered

into

by

B.

Development.

137.

At

a l l

relevant times and up

to the presen t, the

I

Sturman

Brothers

had

exclusive

charge

and

access to the

books

of

and

data

of B. Development.

la in t i f f

has

requested

of

the Sturman Brothers38.

account, records

I

I

information regard ing

t ransact ions of

B.

Development and

requested an

examination of

the books, records

and data. The


refused

to provide

pla in t i f f

with any

meaningful

information.

28

\ ... /



39 Upon

information

and bel ief


may have breached

the i r

f iduciary

duty to pla in t i f f by

excluding_

her from

part ic ipat ing

in

the prof i t s of

H Development

by

app ropr ia ti ng for

themselves

personal ly opportuni ti es

r ight fu l ly

belonging

to

H Development and by entering into transactions

on

b ehalf of H Development

for

the i r personal benef i t and to the

detr iment

of the in te res t s of

p la in t i f f

140. The Sturman Brothers breached

the i r

f iduciary duty

to p la in t i f f by

excluding

her

from the

af fa i rs of H Development

and

wil l continue to exclude

p la in t i f f in

the

future unless

the

Court

grants

the

re l i e f

requested.

141. By reason

of

the

Sturman

Brothers actions

p la in t i f f

wil l

forever be

prevented from determining what amounts

are

owed to her for the

past

ten years and from part ic ipat ing in

future

business

decisions.

142. Pla in t i f f has no adequate remedy a t law.

TWELFTH CAUSE OF ACTION

143. Pla in t i f f repeats and realleges paragraphs

through

142.

144.

Pla in t i f f

i s a 25 shareholder of Wayne Adam Corp.

145.

Pla in t i f f

brings

th is claim derivat ively on behalf

of Wayne Adam Corp. against

the Sturman

Brothers.

146.

I t would be

fu t i le for

p la in t i f f to ask the Board

of

Dire cto rs o f Wayne Adam to bring th is action on i t s own behal

29



• 1

.

f

I

t

since the Board

i s under

th e exc lu siv e control of the wrongdoer

the Sturman Brothers, who are

i t s

sole off icers and directors


bel ief


have

rece ived excess ive remuneration from

Wayne Adam have

I

engaged in

personal

t ransact ions with Wayne Adam for less than

arm s-length

consideration,

have

entered into re la ted company

t ransact ions with Wayne Adam and have appropriated for

themselves personally opportun it ies

r ightfu l ly

belonging to

Wayne Adam

a l l to

the

detriment

of

the shareholders.


have

breached

the i r

fiduciary

duty

to

shareholders

by

surrept i t ious ly

engaging

in

a plan to se l l the assets of a l l of

Ithe Sturman

Family Enterprises,

including

Wayne Adam.

149. The Sturman Brothers have breached the i r

fiduciar

duty by fai l ing to provide shareho lders

with

the requisi te noti

150.

.

C f

meetlngs,

I

lac lons.

I

I

and

an opportunity

to

consider

and vote upon the i r

THIRTEENTH

CAUSE

OF

ACTION

Pla in t i f f

repeats and real leges

paragraphs

1

through

149.

151. Pla in t i f f i s a

25

shareholder of 6-8 Pelham

Parkway Corp.

152.

Pla in t i f f

br ings

th is claim der ivat ively

on

behal

of

Pelham Parkway

against

the

Sturman

Brothers.

I

30



•

53 I t would be fut i le

fo r

pla in t i f f

to ask

th e Board

o f

D i re c t o rs

o f P el ha m P ar kw ay

to

b r in g th is a c tio n on i t s

own

bp.half s in th e

Board

i s under th e exclusive c o n tr o l

of

th e

wrongdoers

th e

Sturman

Brothers

who

a re

i t s

sole

officers

an d

directors


an d

bel ief

th e Sturman

Brothers

have received excessive remuneration

from

P el ha m P ar kw ay have

engaged in p e r s o n a l

t ran s act i o n s

with

Pelham

Parkway fo r less

than a r m s- le n g th c o n si d er a ti o n have

e n t e re d

i n t o r e l a t e d

company t ran s act i o n s with P el ha m P a rk wa y a nd have appropriated

fo r

themselves

p e rs o na ll y o p p o rt u ni ti e s

r ightful ly

belonging

to

Pelham Parkway a l l

to th e

detriment

o f

th e shareholders.

155. Upon information an d

bel ief

th e Sturman Brothers

have

breached

t he i r

fi d u ci ary duty

to

shareholders by

surrepti t iously

engaging in

a

p l a n

to se l l th e as s et s o f a l l o f

th e Sturman Family E n te r p r ise s inclUding P el ha m P ar kw ay .

156. The Sturman Brothers have breached

the i r f id u c ia r

duty by fa i l ing to provide shareholders w ith th e requis i te n o ti

o f

meetings and

an o p p o rt u n i t y

to

consider


a c t i o n s .

FOURTEENTH

USE OF TION

157.

Pla in t i f f r e p e a ts and r e a l l e q e s

par agr aphs

thr ouqh 156.

31



I I

158. Pla in t i f f

ei ther

owns 5

of th e

shares o f or

has

a

5 b e n e f i c i a l in teres t

in Cauldwell anagementCorp.

159. Pla in t i f f

b ri n g s

th i s claim d eri v at i v el y on

b e h a l f

o f Cauldwell a g a in st

th e

Sturman Brothers.

160. t would be fut i le

fo r

pla in t i f f

to

ask

th e

Board

o f D ire cto rs o f Cauldwell

to b r in g this

a c tio n

on i t s own

behalf

s i n c e

th e

Board i s

under

th e

exclusive

c o n t ro l

of th e

wrongdoer

th e Sturman

B ro t h e rs

who

are i t s so le off icers and d i r e c t o r s .


an d bel ief th e

Sturman Brothers

have r ec e iv e d e x ce ss iv e remuneration from Cauldwell have engage

i n

p e r s o n a l


with

Cauldwell

fo r

le a s

than a rm s -

length c o n sid e r a tio n have e n t e re d

i n t o

r e l a t e d

company

t ran s act i o n s

with

Cauldwell and have appropriated

fo r

themselv

p e rs o na ll y o p p o rt u ni ti es r ightfu l ly belonging

to

Cauldwell

a l l

to

t he d etr im en t o f t he s ha re ho ld er s.

162. Upon

information an d bel ief th e

Sturman Brothers

have br eached

the i r

fi d u ci ary duty to shareholders

by

surrepti t iously

engaging

i n

a

p l a n

to

se l l

th e

as s et s

of

a l l

of

th e Sturman

Family

E n t e r p r i s e s including Cauldwell.

163.

The

Sturman Brothers

have

breached the i r f id u c ia r y

duty by fa i l ing to provide

s h a re h o l d e rs

with

th e

requisi te n o tic

o f meetings

an d

an o p p o rt u n i t y to consider an d vote upon the i r

a c t i o n s .



FIFTEENTH CAUSE OF

ACTION

164.

Pla in t i f f rep eat s and r e a l

leges

paragraphs

1

thr ough 163.

165. Pla in t i f f

a

5

s h a re h o l d e r

o f

HP

Howard

Co.

166.

Pla in t i f f b ri n g s th is claim d e r i v a t i v e l y on

b e h a lf

o f HP Howard a g a i n s t th e Sturman Brothers.

167. t would be fu t i l e fo r pla in t i f f to

ask th e Board

o f D ire cto rs o f

HP

Howard

to

b ri n g

th is

act i o n on

i t s own b eh al f

sin c e th e

Board

is under t he e xc lu si ve co n tro l o f th e wrongdoers

th e Sturman

Brothers who are i t s

so le

off icers and d i r e c t o r s .

168.

Upon

information

an d

bel ief

th e

Sturman

Brothers

have r ec ei ve d e x ce ss iv e remuneration

from

HP Roward have

engage

in personal t r a n s a c t i o n s with

HP

Howard fo r l e s s than a r m s -

le n g th co n s i d erat i o n have e n te r e d i n t o r e l a t e d company

tr a nsa c tions

with HP Howard and have appropriated fo r themselve

p e rs o na ll y o p p or tu n it ie s r ightful ly belonging to

HP

Howard.


an d

bel ief th e Sturman Brothers

have breached the i r

f iduc ia r y

duty to

shareholders

by

surrept i t iously

engaging

in a

p l an to sel l

th e a s s e t s o f a l l o f

th e Sturman Family E n t erp ri s es in c lu d in g

HP

Howard.

170. Th e Sturman Brothers have

breached the i r

fi d u ci ary

duty

by fa i l ing to

provide

shareholders

with

th e

r e q u i s i t e

n o t i c

o f meetings an d an o p p o rt u n i t y to c o n sid e r an d vote upon the i r

a c tions.

- 33 -



J

•

SIXTEENTH

CAUSE

OF ACTION

171. Pla in t i f f r e p e a ts an d rea11eqes

paragraphs

through 170.

172. Plaint i f f

ei ther

owns 5

o f the shares o f o r has

a 5 b e n e f i c i a l

in teres t

in Cornwall E s t at es Inc.

173. Pla in t i f f b r in g s this claim de r iva tive ly on b e h a lf

o f Cornwall aq ai n s t th e Sturman

Brothers.

174. t would

be

fut i le

fo r pla in t i f f to ask

th e Board

o f D ir ec to rs

o f

Corwall to b ri n q th is

a c tio n

on

i t s own

b e h a lf

sin c e th e Board i s under th e exclusive co n t ro l

o f

th e

wronqdoers


who

a re i t s

s o l e

off icers and d i r e c t o r s .

175. Upon information an d bel ief th e Sturman Brothers

have r ec e iv e d e x ce ss iv e r emuner ation from Cornwall have·enqaqed

in

p e rs o n a l

t r a n s a c t i o n s with Cornwall fo r less

than

a r m s- le n q

c o n sid e r a tio n

have e n te r e d into r e l a t e d company t ran s act i o n s

with

Cornwall and

have a p p :o p r ia te d fo r themselves o p p o r tu n itie

r iqht fu l ly belonqinq

to

Cornwall

a l l to

th e

detrim ent o f the

shareholders.

176. Upon information an d

bel ief

th e

Sturman Brothers

have

breached

the i r fi d u ci ary duty t o shareholders by

surrepi t i t iously enqaqinq

in

a

p la n

to

se l l

th e a s s e t s

o f

a ll o

th e Sturman Family E n t erp ri s es in c lu d in q Cornwall.

177.

The Sturman B ro t h e rs have

breached

the i r fi d u ci ary

duty by fa i l inq to p rov id e s ha re ho ld er s w ith th e r e q u i s i t e n o t i c

34



I

I

o f

meetings and

an

opportunity

to consider an d

vote upon

t h e i r

act i o n s .

SEVENTEENTH CAUSE OF ACTION

178.

Plaint i f f rep eat s

and r e a l l e g e s

paragraphs

through 177.

179.

Pla in t i f f

ei ther

owns 5

o f th e shares o f o r has

a 5 b e n e f i c i a l in te res t in

A.J. G r if f e n

Corp.

180.

Pla in t i f f

b r in g s

th is claim d e r i v a t i v e l y on b eh al f

o f A.J.

G r if f e n a g a i n s t th e Sturman Brothers.

181.

I t

would

be

fut i le

fo r

pla in t i f f

to

ask

th e

Board

o f D ire c to rs o f A.J. G r if f e n to b r in g

th is

act i o n

on i t s own

b eh al f sin c e th e

Board i s

under

th e e x clu siv e c o n tro l o f th e

wrongdoers th e Sturman B r o th e r s

who

a re

i t s sole

off icers and

Idirectors

182.

Upon

information an d bel ief the Sturman Brothers

I have received

excessive remuneration

from

A.J.

Griffen have

[engaged

in

p e r so n a l


with A.J.

G r if f e n

fo r

l e s s

than

a r m s- l en g t h c o n si d er a ti o n

an d

have appropriated

fo r

themselves

o p p o r t u n i t i e s r ight fu l ly belonging to A.J. G r if f e n

a l l

to th e

d e tr ime n t o f th e sh a r e h o ld e r s.

183. Upon

information an d

bel ief

th e

Sturman

Brothers

have

breached

the i r

f i d u c i a r y

d u ty to

shareholders by

surrepet i t ious ly engaging

in a

p la n

to se l l th e

a s s e t s o f

a l l o f

th e Sturman Family E n t e r p r i s e s in c lu d in g A.J. G r if f e n .

35



I

184.

Th e


breached the i r

f id u c ia r y

duty

by fa i l ing to provide shareholders

with

the r e q u i s i t e n o tic

o f meetings

and

an opportunity

to

consider

an d vote upon the i r

act i o n s .

EIGHTEENTH CAUSE

OF

ACTION

185. Pla in t i f f r e p e a ts and real l eg es

paragraphs

1

thr ough 184.

186. Pla in t i f f i s a

25

shareholder

o f

H Development

Corp.

187. Pla in t i f f b r in g s th is

claim d e r i v a t i v e l y

on b e h a lf

o f H Development a g a i n s t

th e

Sturman

Brothers.

188. I t would

be.

fut i le

f o r pla in t i f f to ask th e Board

o f

D i rect o rs

o f

H Development to b rin g th is

a c tio n

on

i t s

own

b eh alf sin c e the Board i s under th e

e x c l u s i v e

c o n tr o l

o f

the

wrongdoers th e Sturman Brothers

who

a re

i t s

so le off icers

an d

directors

189.

Upon

information

and

bel ief

th e

Sturman

Brothers

have r ec ei ve d e xc es si ve

r emuner ation from H Development

have

engaged in p e rs o n a l t r a n s a c t i o n s with H

Development

fo r less

than a rm s -l en g th c o n si d er at io n have e n t e re d i n t o

r e l a t e d

company t r a n s a c t i o n s

with

H

Development and have appropriated

f o r

themselves

p e r s o n a l l y

o p p o rt u n i t i es

r ightfu l ly

belonging to

H Development a l l to th e

d e t ri m e n t o f th e shareholders.

36




bel ief


have

breached

the i r fiduciary duty

to shareholders

by

surrepti t iously

engaging

in

a

plan to

se l l

the

assets

of

a l l of

the

Sturman

Family

Enterprises

including

H

Development.


have

breached the i r

f iduciary

duty by

fa i l ing to

provide

shareholders

with

the requisi te

notic

of meetings and an opportunity to consider


actions.

WHEREFORE

pla in t i f f demands

judgmen t be entered:

1. On the f i r s t cause of

action

direct ing tha t an

account

be

taken

of the

a f fa i r s

of

Pelham

Racquetball

and

Health

Club.

2. With re sp ec t to the second cause

of

action

direct ing tha t an account be taken of the affa i rs of

Pelham

Associates.

6. With respe ct to the s ixth cause

o f actio n

direct in

tha t a cons truc tive par tnersh ip be imposed

upon

Wayne Adam Corp.

and tha t

an account be taken of

i t s affa i rs

3.

With

respect

to the

th i rd

cause

of

action direct in

tha t

an

account be

taken

of

the

a f fa i r s of Yorkv il le Assoc ia tes .

4. With

respect

to the fourth cause o f action

declaring tha t

const ruc tive par tnersh ips

be

imposed with respect

to th e c or po ra te defendants an d tha t an account

be taken

of the

a f fa i r s

of the corporate

defendants.

7.

With respect

to

directing tha t a constructive

Pelham Parkway

Corp.

and tha t

the seventh cause

of action

partnership

be

imposed

upon 6 8

an account be taken of

i t s affa i rs

5. With respe ct to the f i f th cause

o f actio n

direct in

a cons truc tive par tnership

be

imposed upon A.J. Griffen and

an account be

taken

of

i t s affa i rs

tha t

tha t

8.

With

respect

to

the eig hth

cause

of

action

directing t ha t

a

cons truc tive par tnership be

imposed

upon

37



i

Cauldwell

Management Corp.

and th t

an account be

taken of i t s

ff irs

9.

With respect

to the

ninth cause of

action

direct i

th t a

constructive

partnership be imposed

upon P

Howard Co.

and th t an account be taken

of i t s

ff i rs

10 . With respect

to the tenth

cause of

action

direct i

th t

a

const ruc tive par tnersh ip

be imposed

upon Cornwall

Estate

Inc.

and th t an account be

taken of i t s ff irs

11 . With respect to t he e le ve nt h

cause

of

action

directing

th t

a constructive

partnership

be

imposed upon

Development Co.

and

th t an account be

taken of i t s

ff i rs

12.

With respect

to Wayne Adam Corp.

direct ing th t

damages

be

awarded against the Sturman Brothers in an amount to

be

determined t t r i l and th t they

be

enjoined from breaching

the i r

f iduciary

duties

to

i t s

shareholders.

13. With

respect

to 6 8

Pelham Parkway

Corp.

direct in

th t damages

be

awarded against

the Sturman

Brothers in

an

amo

to be

determined t t r i l

and

th t

they be enjoined

from

breaching th ie r f iduciary duties to

i t s

shareholders.

.

14 With re sp ect to Cauldwell Management Corp.

directing th t

damages

be awarded against the Sturman Brothers

an amount to

be

determined

t

t r i l

and

th t

they be enjoined

from breaching the i r f iduciary duties to

i t s

shareholders.

15. With

respect

to A.J. Griffen Corp. direct ing

th

damages be awarded

against


in an amount

to

be

determined

t t r i l and th t they be enjoined

from

breaching

i

the i r

fiduciary

duties

to

i t s

shareholders.

i

16. With re sp ect to

P

Howard

Co. d ir ec ti ng t ha t

damages

be

awarded against the Sturman Brothers in an amount to

be

determined

t t r i l and th t

they be

enjoined from breaching

the i r

f iduciary

duties

to

i t s shareholders.

17 . With respect

to

Development Co.

direct ing

th

damages

be awarded

against


in

an

amount

to

be determined t t r i l and th t they

be enjoined

from breachin

the i r f id u ci ar y d u ti es

to

i t s shareholders.

18. With respect to Cornwall Estates

Inc. direct ing

th t

damages

be

awarded

a ga in st the

Sturman

Brothers

in

an amo

to

be

determined

t t r i l and

th t

they be

enjoined

from

breaching the i r f iduciary duties to i t s

shareholders.

38



J

19. Granting a temporary

restra ining order,

preliminar

and permanent injunctive re l i e f barring defendants from

the sale

or t ransfer of

the assets

of

any

of

the Sturman

Family

Enterprises

without written

notice

to

pla in t i f f

and a 30-day

opportunity thereaf ter for

pla in t i f f

to

examine

the t ransact ion

during which

period

pla in t i f f will

be provided a l l t he n eces sa ry

information

via disclosure

proceedings.

20.

Granting

a temporary

restra ining order,

preliminar

and permanent

injunctive re l i e f barring defendants from the

sale

or t ransfer of the

assets

of any of the

Sturman

Family nti t ies

which are not the bes t in teres ts of the

ent i t ies

and

designed

to maximize return to a l l

of the general

partners ,

including

pla in t i f f

21.

Directing tha t defendants be compe lled to del iver

or make ava ila ble to p la in ti f f a ll books and records

of

the

Sturman Family En te rp ris es for her i nspe ct ion.

22.

Awarding pla in t i f f

punit ive

damages against the

Sturman Brothers

an amount to be det ermined af ter discovery

and

t r i a l

23.

Granting such other and

fur ther re l i e f

as

th is

cour t may deem jus t and proper

together

with a fee

of

costs and

di

sbursements.

.

Dated: July 9,

1987

MILB NK

TWEED H DLEY

McCLOY

1

Chase

Manhattan

Plaza

New York, New

York 10005

212) 530-5000 .

Attorneys

for

Pla in t i f f

Donna Sturman Butler

-

39

-



SUPREME OURT OF THE STATE OF

NEW YORK

OUNTY OF NEW YORK

DONN STURM N BUTLER

Plaint iff

against

HOW RD

STURMAN BRUCE STURMAN

and W YNE STURMAN

et

l

Defendants

MENDED COMPLAINT

M I L B A N K . T W ~ J E . U L ~ J Y

M CLOY

CHASE MANHAT TAN I ~ L A Z A

NEW

YORK. N .Y.

10006

:l12·6ao·O OO

~ T T O R N E Y 8

R

Plaintiff



xhibit



(

;

·

I

I SUPREME COURT

OF

THE

STATE

OF NEW YORK

COUNTY OF NEW YORK

I

--------------------------------------X

ONN STURMAN

BUTLER

Plaint i f f

-against-

HOW R STURMAN

Individually

and

as

Executor

of the

Estate

of

Muriel

Sturman,

BRUCE

STURMAN W YNE

STURMAN

JOSEPH

WARREN as Executor

of the

Estate

of

Muriel

Sturman,

6-8 PELHAM P RKW Y CORP., CAULDWELL

M N GEMENT CORP., ANTHONY

J .

GRIFFEN

CORP., HP

HOW R

CO., H.

DEVELOPMENT

CO., WAYNE ADAM CORP.,

and CORNWALL ESTATES INC.,

·

·

·

Index No. 15379/87

ANSWER

Defendants. :

--------------------------------------X

Defendants, their attorneys, Stroock

Stroock

Lavan,

as

and

for their

answer to the complaint,

allege as

fol

, lows:

1. Deny knOWledge or information

sufficient

to form a

be l ie f as to

the

allegations

of paragraph

1

of

the

complaint.

2.

Admit the

allegations

of

paragraph

2 of

the

com-

,plaint .

I 3.

Deny

the

allegations

of

paragraph 3

of

the com-

i

plaint , except admit

that

the

pla in t i f f and her

brothers

Howard,

i Bruce and

wayne Sturman are

the only

children

of

Henry and Murie

I

Sturman

and that

they are

general

partners in a number of genera

partnerships

and

shareholders

in

a number

of corpo ra tions.

4. Admit the allegations of paragraphs 4 and 5 of the

complaint.



I

' -,

; J

5.

Admit the

allegations

of paragraph 6 of the com

I

I

plaint but deny knowledge or information

as

to the principal

j

.:

place

of business of

6-8

Pelham Parkway Corp. and deny knowledge

or

information as to

the

names of of the officers and direc-

tors of said

corporation.

6. Deny knowledge

or information sufficient

to form a

belief as

to the allegations of paragraph

7

of the complaint but

admit that

the

pla in t i f f is a beneficiary of

the

estate of Muriel

Sturman and that the estate owns a l l of the outs tanding

shares

of

Cauldwell Management Corp.

7.

Deny knowledge

or

information

sufficient

to

form a

be l ie f

as

to

the

allegations

of

paragraph

8

of

the complaint

but

admit

that

the

pla in t i f f is

the beneficiary

of

the estate

of

,Muriel

Sturman and

that the estate owns

a l l

of

the outs tanding

shares

of Anthony J .

Griffen

Corp.

8.

Deny

the

allegations

of

paragraph 9

of the

com

p la int except

admit

that

the defendant H.P. Howard Co. is a

New York corporation with i ts principal place

of

business at 200

North Columbus Avenue, Mt. Vernon, New York and that Howard,

but admit that Howard, Bruce and

Wayne

Sturman are off i

Deny the

allegations

of paragraph 10 of the com-

.

iBruce and wayne Sturman

are

officers and directors of said corpo-

; I

j

rat ion.

i

I

icers

and

directors

of

H.

Development

Corp.

and

that

they

own

I

I

shares of stock in said corporation.

I

-2-



10 . Admit

the

allegations of

paragraph

11

of

the

com

plaint .

11.

Admit

the

allegations of

paragraph

12 of

the

com-

plaint

but deny that 200

North

Columbus Avenue Mt. Vernon New

York

is the principal place of business o f Cornwall Estates Inc

12.

Deny

the

allegations of

paragraph

13 of

the

com-

plaint except admit that Henry Sturman died in 1973 and that th

pl int i and Howard Bruce

and Wayne

Sturman were

the beneficia

ries of the estate of Murie l Sturman.

13 . Admit

the

allegations of paragraph 14 of

the

com

plaint .

14 .

Admit

the allegations of paragraphs

15

and

16

of

the

complaint.

15.

Deny

the


the

com

plaint .

16 . Deny the allegations of

paragraph

18

of

the com-

plaint but admits

that the

pl int i and Howard Bruce and

Wayne Sturman entered into

a

partnership

agreement in

or about

1978 and

begs

leave

to refer to

said

agreements

upon

the

t r i l

o

18.

17.

· this

action.

i

I

iPlaint

•

Admit

the

allegations

of

paragraph 19 of

the

com

Deny

the


the

com

.p la int

except

admit

that

the

pl int i

is

a

general

partner

in

:Yorkvil le Associates that her present interest in

the

I

3



i P

i

;: partnership is 20 that the estate of Muriel Sturman is a part

ner in Yorkville

Associates

and

that

the plaint i f f is

a

benefi-

:

ciary of

· the esta te of Muriel Sturman.

19. Deny knowledge or

information suff ic ient

to form a

be l i e f

as to

the

allegations o f pa ragraph 21

of

the complaint.

20 . Deny

the allegations

of

paragraphs

22 23

24

25

and 26 of

the complaint.

2 Deny

the allegations

of

paragraphs

27 28

29 30

and

31 of

the

complaint.

22 .

Deny the allegations of

paragraph

32 of the com-

plaint

but

admit

that

the

plaint i f f

and

her

attorneys

met

with

Howard Bruce and Wayne Sturman and

their

attorneys

in

January

of

98

to discuss

ent i t ies

in

which

the

plaint i f f

had an inter

es t

23 . Deny

the allegations

of

paragraph

33

of the

com-

plaint

and re qu est lea ve to refer .

24. Deny

the allegations

of

paragraph

34 of

the

com

plaint

FIRST CAUSE

OF ACTION

Deny

each

of the allegations of

paragraph

44

of

Deny the

allegations

of

paragraph

43

of the

com


paragraphs

35 36 37 38

27.

26.

25.

:

:\39

40 and 41 of the

complaint.

I

:Ipla in t

:

;: the complaint.

4



l

r

·

~ m t the allegations of

paragraph 45 but deny

8.

:I

i that the

informat ion

regarding

the Pelham Racquetball transact ion

has been refused.

29.

Deny the allegations of parag raph

46 7

and

8 of

the complaint.

30.

Deny knowledge or information sufficient to form a

belief as to the allegations

of

paragraphs 9 and 50 .

31 . Deny the

allegations

of parag ra ph

5

of the com

pla in t .

32 .

Deny

the allegations

of parag ra phs

53 54 55

and

56

of the

complaint.

SECOND CAUSE OF ACTION

33.

Deny knowledge or

information sufficient to

form a


of

paragraph

58

of

the complaint.

34. Deny the allegations

of paragraph

59

of

the com

pla in t .

35 . Deny the allegations

of para graph

60 but admit

; that pl in t i

requested

information from

the

individual defen

dan ts rega rd ing

Pelham

Associates

and

that

said

information was

i

provided.

: 36 . Deny each

and every

allegation of

paragraphs 61

62 63 64 65

and

66 of the complaint.

·i

r

·,



of

paragraphs 68 and 69

of

r

ithe

complaint.

5



I

_ . .

I

I

; plaint .

i

38. Deny the allegations of paragraph

70

of

the com

39. Deny

the allegations of

paragraphs 71 72

73 74

and 75

of

the complaint.

FOURTH FIFTH SIXTH

SEVENTH

EIGHTH NINTH TENTH N

ELEVENTH CAUSES OF

ACTION

40. The Fifth Sixth Seventh Eighth

Ninth Tenth

and Eleventh Causes

of

Action have been

dismissed.

TWELFTH CAUSE OF ACTION

41. Admit the allegations of paragraph 144

of

the com

plaint .

42.

Deny knowledge or information

sufficient to

form a


of pa ragraph 145 of

the complaint.

43. Deny the allegations of paragraphs 146 147 148

and

149

of

the

o m p l i n t ~

THIRTEENTH CAUSE OF ACTION


of

paragraph 151 of the com

plaint .

i

:1

belief

45.

Deny knowledge or information

sufficient to

form

as

to the

allegations

of paragraph 152 of the complaint.

46. Deny

the

allegations

of

paragraphs 153 154 155

iand

156

of

the

complaint.

FOURTEENTH

CAUSE OF ACTION

47.

Deny

the

allegations

of paragraph

158

of the

com

plaint

6



\. .

I

48.

Deny knowledge

or

information

suff icient to

form a

Deny the allegations of paragraphs 160,

161,

162

49.

belief as to the allegations of pa ragraph 159 of the complaint.

d

I

and 163 of

the complaint.

FIFTEENTH CAUSE OF ACTION

50. Deny the allegations of paragraph 165 of the com

plaint .

51.

Deny knowledge

or information suff icient to

form a

belief

as

to the


the

complaint.

52.

Deny

the allegations

of paragraphs

167, 168,

169

and

170

of the

complaint.

SIXTEENTH CAUSE OF ACTION

53.

Deny

the

allegations

of

paragraph 172 of

the

com

plaint .

54.

Deny knowledge

or information sufficient to

form

bel ief as to the allegations of paragraph 173 of the complaint.

55. Deny the allegations of paragraphs 174, 175, 176

and 177 of

the

complaint.

SEVENTEENTH CAUSE OF ACTION

57.

Deny knowledge

or

information

suff icient to

form

the

allegations of

paragraph

180

of

the

complaint.

56.

Deny

the allegations of

paragraph 179

of the

com

i lplaint excep t admits the plaint i f f is a beneficiary of the estat

llof Muriel

Sturman.

bel

ief

as

to

I

i



58. .Deny

the

allegat

ions

of paragraphs

181 182

8

and

184 of

the

complaint.

BI

GHTEENTH CAUSE OF ACTION

59.

Deny

the

allegations

of

paragraph

186

of

the

com

plaint .

I

60. Deny knowledge

or

information sufficient

to

form

a

belief as to

the allegations of

paragraph 187 of the

complaint.

61. Deny the allegations of paragraphs 188 189 190

and

191

of the complaint.

FIRST

AFFIRMATIVE DEFENSE

62.

The

complaint

fai ls

to

state

causes

of

action

cog

nizable by the

Courts of the

State of New York.

SECOND

AFFIRMATIVE

DEFENSE

63. The

Fourteenth

and

Seventeenth

Causes of Action

:

are b arred because the

plaint i f f .has no

standing to proceed

as a

residuary

beneficiary

of the estate of Muriel Sturman.

THIRD

AFFIRMATIVE DEFENSE

The Twelfth

Thirteenth

Fourteenth Fifteenth

4.

:lSixteenth

Seventeenth and Eighteenth

Causes

by t he app li cable sta tute

of l imitations.

of Action are

barre

FOURTH

AFFIRMATIVE DEFENSE

65.

The

irs t Second

Third Twelfth Thirteenth

I Fourteenth Fifteenth

Sixteenth

Seventeenth and

Eighteenth

Icauses

of

Action

are

barred

pursuant

to

the

doctrine

of

laches

;[and waiver.

d

I

-8-



WHEREFORE

the

defendants

demand judgment dismissing

t ion.

I

i

I

I the

complaint

and awarding the costs and

disbursements

of

the ac-

:I

i l

;

Dated:

New

York

New

York

January 6,

1988

STROOCK STROOCK

LAVAN

Attorneys for Defendants



212

806-5400

TO MILBANK TWEED HADLEY

McCLOY

Attorneys

for

Plaint i f f

One Chase Manhattan Plaza

New York

New

York

I

;

;

I

i

I

;

;

I

I

i

i

I

-9-



. ~ . ,

__

. l _ ~ : - ~ ~

.-.

I.No. 1 5 3 7 9 / 8 7 ~ SUPREME COURT OF THE

~ COUNTY

OF

NEW

YORK

S T A ~

OF

NEW

YORR..·

~

DONNA STURMAN

BUTLER,

Pla in t i f f

-against-

HOW RD

STURMAN, Individual ly

and

as

Executor

of

th e E state of

Muriel Sturman,

BROCE STURMAN,

and

WAYNE

STURMAN, e t a l

, ,

Defendants.

Defendants

SEVEN

HANOVER SQUARE

NBWYORE.

N.

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xhibit



•

SUPREME COURT

OF

THE

STATE

OF NEW YORK

COUNTY

OF

NEW YORK

--------------------------------------X

ONN S ~ U R N BUTLER

•

•

Plaint i ff

Index

No. 15379/87

:

MEN E NSWER

-against-

·

·

HOW R

STURMAN

Individually and as

Executo r of

the

Estate

of Muriel

Sturman

BRUCE

STURMAN W YNE

STURMAN JOSEPH WARREN

as Executor

of the

Estate

of

Muriel

Sturman

6-8 PELHAM P RKW Y

CORP.

CAULDWELL

M N GEMENT CORP. ANTHONY J .

GRIFFEN

CORP.

HP HOWARD

CO

H.

DEVELOPMENT CO WAYNE-A6AM

CORP.

and CORNWALL

ESTATES

INC.

Defendants.

:--------------------------------------X

Defendants by their attorneys Stroock Stroock

; Lavan as

and

for their answer to

the

complaint allege as

f

lows:

1. Deny knowledge

or information sufficient

to form

be l ie f as to the

allegations

of

paragraph 1

of the

complaint.

2.

Admit

the

allegations

of

paragraph

2

of the

com-

I 1 .

p unto

3.

Deny

the allegations of paragraph

3

of the

com-

;p la int

except

admit that the plaint if f

and

her brothers

Howar

:

Bruce and

wayne Sturman are

the only

children

of

Henry and Mu

I

Sturman and

that they are

general

partners in

a number

of gene

partnerships and

sha reho lder s in

a number

of corpora tions.

4.

Admit

the allegations of paragraphs

4 and 5

of t

complaint.



..

5.

Admit

the

allegations of

paragraph

6 of the

com-

p l a i n t

but

deny

knowledge

or

information

as

to the principal

place

of.

business

of

6- 8

Pelham Parkway

Corp.

and deny k n o w l e

or

information as to the names of a ll of the o f f i c e r s and d i r e

tors of said

corporation.

6.

Deny knowledge

o r information sufficient to

form

belief as to the allegations of paragraph 7 of the complaint

admit t h a t the

plaint i f f

is

a

beneficiary

of

the

e s t a t e of

Mu

Sturman an d t h a t the estate owns

a ll of

the o ut st an di ng s ha re s

Cauldwell

Management

Corp.

7.

Deny knowledge

o r information sufficient to

form

b e l i e f as to the allegations of paragraph 8

of

the complaint

admit

t h a t the plaint i f f

is the

beneficiary of the estate

of

Muriel Sturman and t h a t

the e s t a t e

owns

a ll of

the outstanding

shares

of Anthony

Griffen

Corp.

8. Deny

the a l l e g a t i o n s

of

paragraph

9 of

the

com-

p l a i n t except admit

that

the defendant

H.P. H ow ard

O is a

New

York

corporation

with

i t s

p r i n c i p a l

place of business

at

2

North

Columbus Avenue Nt. Vernon

New

York and

t h ~ t

Howard

Bruce an d Wayne Sturman

are officers

and directors

of

said cor

ration.

9.

Deny

the allegations

of p ar agr ap h 10 of the com

p l a i n t but admit t h a t Howard Bruce and

Wayne

Sturman are o

cers

and d i r e c t o r s

of H

Development Corp. and

that

they own

shares of

stock

in

said

corporation.

-2 -



:> . •

10. Admit the allegations of paragraph 11 of the com

plaint .

11.

Admit the allegations

of paragraph

12

of

the co

plaint but deny that 200 North Columbus Avenue Mt. Vernon

York is the

principal

place

of

business of Cornwall Estates I

12.

Deny the allegations of paragraph 13

of

the com

plaint

except

admit

that Henry Sturman

died

in 1973 and that

pl int i

and Howard Bruce and wayne Sturman w

the

benefic

ries

of

the estate

of Muriel

Sturman.

13.

Admit the allegations of paragraph 14 of the co

plaint .

14.

Admit

the

allegations

of

paragraphs 15 and 16 o

the complaint.

15.

Deny the allegat ions

of paragraph

17

of

the com

plaint .

16.

Deny the allegations of paragraph 18 of the com

plaint but admits that the plaint i f f and Howard Bruce and

Wayne

Sturman

entered in to

a

partnership

agreement

in

or

about

1978 and begs

leave

to refer to

said

agreements upon the t r i l

this

action.

17. Admit the allegations

of

paragraph 19

of

the co

plaint .

18.

Deny the allegations

of paragraph

2

of

the com

plaint

except admit that

the

plaint iff

is a

general

partner i

Yorkvil le Associates that

her

present interest

in the

-3-



partnership

is

~ O that the estate of

Muriel

Sturman is a par

ner

in Yorkv il le

Associates

and

that the

plaint i f f is a benefi-

ciary of

the estate

of Muriel

Sturman.

19. Deny knowledge

or

information

suff icient

to form

belief as to the


the

complaint.

20. Deny the allegations of

paragraphs

22

23

24 2

and 26

of

the complaint.

21.

Deny the allegations of paragraphs 27 28 29

and 3

of

the complaint.

22. Deny the allegations of paragraph 32

of

the com

plaint

but

admit

that

the pl int i and her attorneys met with

Howard Bruce and Wayne Sturman and

their

attorneys in January

of 1987 to discuss enti t ies

in

which

the plaint iff

had an inte

est .

23.

Deny the allegations of paragraph 33 of the com

plaint .

24.


paragraph

34

of the

com

plaint .


of

paragraphs 35 36 37

39 40 and 4 of the complaint.

RST

USE OP TION

26. Deny the allegations of paragraph

43

of

the

com

plaint .

27. Deny each

of

the

allegations

of paragraph 44

of

the

complaint.

4



28. Admit

the

allegations of paragraph 45 but deny

that the information r egard ing the Pelham

Racquetball

transact

has been refused.

29. Deny


46.

47

and

48

the complaint.

30.

Deny knowledge

or information

sUfficient to form

belief

as to

the

allegations

of

paragraphs 49 and

50.

31. Deny the allegations of paragraphs 5 and 5

of

the complaint.

32. Deny the allegations of paragraphs 53 54 55 a

56 of the c o m p l ~ n t

SECOND CAUSE OF ACTION

33.

Deny knowledge or

information sufficient to

form

belief as to the allegations of paragraph 58 of the

complaint.

34. Deny

the

allegations of paragraph 59 of the com

;

plaint .

35.

Deny


60

but admi

that

pl int i

requested

information

from

th e ind iv id ua l

defen

dants regarding Pelham Associates and that said· information wa

provided.

36.

Deny

each·

and

every allegation of

paragraphs

61


37. Deny the allegations of paragraphs

68

and

69

of

the

complaint

•

62 63 64 65

and 66

of the

complaint.

1

5



C : ~ y

A •

38. Deny the

allegations

of paragraph 7

of

the com

plaint .

39. Deny th e allegations of paragraphs 71 72 73 74

and

75 of

the

complaint.

FOURTH

FIFTH

SIXTH SEVENTH

BI GHTH N

IHTH

TENTH

AND

BLBVENTH CAUSBS OF ACTION

40.

The Fifth Sixth

Seventh

Eighth

Ninth Tenth

and Eleventh

Causes

of Action

have

been dismissed.

TWELFTH CAUSE OP Ac:rtOtf

41.

Admit the

allegations of

paragraph 144

of the

com

plaint .

42. Deny knowledge

or

information sufficient to form

belief as to the

allegations

of

paragraph


43 .


paragraphs

146 147 148

and 149 of the

complaint.

THIRTEENTH CAUSE OF ACTION

44 . Deny the allegations of paragraph 151 of the com

pl int

45.

Deny knowledge or

information

sufficient to form

belief as

to the allegations of paragraph

5

of

the

complaint.

46.

Deny the allegations

of

paragraphs

153

154

155

and 156

of the complaint.

FOURTEENTH CAUSE OF ACTION

47.

Deny

the

allegations of paragraph

158 of the com

plaint .

6



;

.

.

•

48 .

Deny knowledge or

information suff icient

to form

belief as to the

allegations

of

paragraph


49. Deny

the allegations of

paragraphs 160 161 62

and 163

of the

complaint.

PI

F I EENTH CAUSB O F ACTION

50.

Deny

the allegations

of paragraph 165 of

the

com-

plaint .

51.

Deny knowledge or information sufficient to form

belief

as to the allegations of paragraph

166

of

the complaint.

52. Deny the allegations of paragraphs

167,

168, 169

and 170 of the complaint.

SIX l BBN l H CAUSB

Oll

ACTION

i

i

plaint .

I

I

:

53. Deny

the allegations

of paragraph 172

of

the com-

54. Deny knowledge or information suff icient to form

belief as

to

the

allegations

of paragraph 173 of the complaint.

55. Deny

the

allegations of paragraphs

174,

175, 176

and 177 of the complaint.

SBYBN TBBNTH CAUSB Oll ACTI OIl

I

i plaint

except admits the plaint iff

is

a beneficiary of the estat

56.

Deny the

allegations

of

paragraph

179

of

the com

/

i of Muriel

Sturman.

57 . Deny knowledge or information suff icient to form

belief as to the

allegations of paragraph

180

of the

complaint.

-7-



58 ny the allegations of paragraphs 181 182 183

and 184

of

the complaint.

EIGHTEENTH CAUSE OF ACTION

59 Deny

the

allegations

of

paragraph 186 of

the

com

p l a i n t .

6 ny knowledge

or

information

s u f f i c i e n t

to

form

b elief

as to

the allegations of paragraph 187 of

the

complaint.

61 . Deny the allegations of paragraphs 188 189 19 0

and 191

of

the complaint.

PIRST APPIRMATIVB DEPEXSB

62. The complaint f a i l s

to

state causes of action cog

nizable

by the Courts of the S tate

of

New York

SECOND AFPIRMATIVE DEFENSB

63 .

The

Fourteenth

and Seventeenth

Causes of

Action

are barred because the plaintiff has

no

standing

to

proceed

as a

residuary

beneficiary

o f the e s t a t e of Muriel Sturman.

THIRD AFPIRMATIVE

DBFENSE

64. The

irst Second

Third Twelfth

Thirteenth

Fourteenth F ifteenth

Sixteenth

Seventeenth and

Eighteenth

Causes of Action

are barred

by the

applicable s t a t u t e

of l i m i t a

;

t ions

FOURTH AFFIRMATIVE DEFENSE

65 .

The F i r s t Second Third Twelfth

Thirteenth

Fourteenth

F ifteenth

Sixteenth

Seventeenth and

Eighteenth

Causes of

Action are barred

pursuant to the

doctrine

of laches

and

waiver

and

e stoppe l.

-8 -



FIFTH

AFFIRMATIVE

DEFENSE

66. Plaint i f f

never

requested

the directors of the

fendant corpo ra ti ons to commence an action on behalf of the co

porations

and

has

failed to conform to the conditions of

Busin

Corporation

Law

S

626.

WHEREFORE

the defendants demand judgment dismissing

the complaint

and awarding

the costs and disbursements of the

t ion.

Dated:

New York New York

January 22, 1988

I

d

,

,

:i

i

i

I

: i

TO

STROOCK STROOCK V N

Attorneys

for

Defendants



212

806-5400

MILBANK

TWEED

HADLEY McCLOY

Attorneys for Plaint i f f

One Chase Manhattan

Plaza

New York New York

-9-



Index No. l:i.1Z.2.D:17

lAS

,'r.c

I

SUi REME COUR; OF

THE STATE

'OF

NEW

YORK

COUNTY OF NEW

YORK

DONNA STURMAN

BUTLER

j lJavis .I .

II

Plaint iff

-against-

HOWARD

STURMAN individually and

as

Executor o f the

Estate of

Muriel

Sturman, BRUCE STURMAN

WAYNE STURMAN

JOSEPH WARREN as

Execu to r of

the

Estate o f Mur ie l

Sturman 6-8 PELHAM PARKWAY CORP.,

CAULDWELL

MANAGEMENT CORP.,

ANTHONY

I GRIFFEN CORP., HI

HOWARD

CO.,

H.

DEVELOPMENT CO.,

WAYNE ADAM

CORP., and

CORNWALL ESTATES INC.,

Defendants.

NOTICE

OF

REMOVAL

M I L BA N K . T W g g n . I l A D . gy M e ~ o y

I I I ~ \ I ~ MJ\NIIA I I AN PLAzA

ln c Y WOOl )

21:. ·t<.;J()·l )(U)O

TIORN VS FOR Plaint iff

)

_

)

)




SOUTHERN DISTRICT OF NEW YORK

--------------------------------------x

In re : Involuntary Chapter 7

WAYNE A. STURMAN, Case Nos. 89 B 11932(PCB)BRUCE D. STURMAN, : 89 B 11933(PCB)

HOWARD P. STURMAN, 89 B 11934(PCB)

(Jointly Administered)Debtors. :

--------------------------------------x

Donna Sturman Butler,

Plaintiff : Adv. Pro. No. 91-5900

Against

Howard Sturman, individually :and as Executor of Estate ofMuriel Sturman, Bruce Sturm an, :Wayne Sturman, Joseph Warren,as Executor of Estate of Muriel :Sturman, et al.

:Defendants

___________________________________x

ORDER DISMISSING AND CLOSING ADVERSARY PROCEEDINGFOR LACK OF PROSECUTION

WHEREAS, on June 28, 1991 Donna Sturman Butler commenced this

adversary proceeding seeking removal of a state court action; and

WHEREAS, no action has been taken in this adversary proceeding

since the date this adversary proceeding was commenced; and

WHEREAS, it appearing that this adversary proceeding should be

dismissed under pursuant to Federal Rule of Civil Procedure 41(b) and

Local Bankruptcy Rule 9020-1 for lack of timely and diligent



prosecution, it is therefore

ORDERED, that this adversary proceeding be, and hereby is,

dismissed; and it is further

ORDERED, that this adversary proceeding be, and hereby is,

closed.

Dated: New York, New YorkMarch 21, 2005

/s/ Prudence Carter BeattyUnited States Bankruptcy Judge



CLOSED




Assigned to: Judge Prudence Carter Beatty Lead BK Case: 89-11934 Lead BK Title: Howard P. Sturman Lead BK Chapter: 7 Demand:


Nature[s] of Suit: 459 Application For Removal

Plaintiff -----------------------

Donna Sturman Butler

V.

Defendant-----------------------

Howard Sturman, Howard Sturman, individually and as Executor of the Estate of Muriel Sturman, Bruce

Struman, Wayne Struman, Joseph Warren.


03/22/2005

Adversary Closed. This Adversary Proceeding Docket is Closed Subjectto the Filing of a Notice of Appeal within Ten(10)Days of the Entry of theOrder Terminating This Adversary Proceeding. (Gadson, Carol) (Entered:03/22/2005)

03/22/2005 3Order signed on 3/21/2005 Dismissing And Closing Adversary ProceedingFor Lack Of Prosecution. (Gadson, Carol) (Entered: 03/22/2005)

10/19/1993 2

Any Document Docketed before 10/19/93 was Entered on Computer

Document Imaging [EOD Date: 10/19/93. Doc. No: 2] (Entered:10/19/1993)

06/28/1991 1

Complaint [91-5900] Donna Sturman Butler vs. Howard Sturman . NOS459 Application For Removal . [ Filing Fee $ 120.00] [EOD Date:10/19/93. Doc. No: 1] (Entered: 10/19/1993)


12/21/2009 1




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