Case 1:25-cv-02524 Document 1 Filed 03/27/25 Page 1 of 57
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
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`FEN COSYNS, derivatively on behalf of
`LUXURBAN HOTELS INC.,
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`Case No.: 1:25-cv-02524
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`DEMAND FOR JURY TRIAL
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`Plaintiff,
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`v.
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`BRIAN FERDINAND, SHANOOP KOTHARI,
`DAVID BERG, JIMMIE CHATMON, AIMEE
`NELSON, LEONARD TOBOROFF, and
`JEFFREY WEBB,
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`Defendants,
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`and
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`LUXURBAN HOTELS INC.
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` Nominal Defendant.
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`VERIFIED SHAREHOLDER DERIVATIVE COMPLAINT
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`Plaintiff Fen Cosyns (“Plaintiff”), by Plaintiff’s undersigned attorneys, derivatively and on
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`behalf of Nominal Defendant LuxUrban Hotels Inc. (“LuxUrban” or the “Company”), files this
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`Verified Shareholder Derivative Complaint against defendants Brian Ferdinand (“Ferdinand”),
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`Shanoop Kothari (“Kothari”), David Berg (“Berg”), Jimmie Chatmon (“Chatmon”), Aimee
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`Nelson (“Nelson”), Leonard Toboroff (“Toboroff”), and Jeffrey Webb (“Webb”) (collectively, the
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`“Individual Defendants,” and together with LuxUrban, the “Defendants”) for breaches of their
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`fiduciary duties as directors and/or officers of LuxUrban, unjust enrichment, abuse of control,
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`gross mismanagement, waste of corporate assets, and for violations of Section 14(a) of the
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`Securities Exchange Act of 1934 (the “Exchange Act”), and against Defendants Ferdinand and
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`Kothari for contribution under Sections 10(b) and 21D of the Exchange Act. As for Plaintiff’s
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`complaint against the Individual Defendants, Plaintiff alleges the following based upon personal
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`knowledge as to Plaintiff and Plaintiff’s own acts, and information and belief as to all other matters,
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`based upon, inter alia, the investigation conducted by and through Plaintiff’s attorneys, which
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`included, among other things, a review of the Defendants’ public documents, conference calls and
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`announcements made by the Defendants, United States Securities and Exchange Commission
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`(“SEC”) filings, wire and press releases published by and regarding LuxUrban, legal filings, news
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`reports, securities analysts’ reports and advisories about the Company, and information readily
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`obtainable on the Internet. Plaintiff believes that substantial evidentiary support will exist for the
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`allegations set forth herein after a reasonable opportunity for discovery.
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`NATURE OF THE ACTION
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`1.
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`This is a shareholder derivative action that seeks to remedy wrongdoing
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`committed by the Individual Defendants from May 9, 2023 through August 20, 2024, both dates
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`inclusive (the “Relevant Period”).
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`2.
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`LuxUrban is a Delaware-incorporated hospitality company. In August 2022,
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`seeing an opportunity from the downturn in the hospitality industry caused by the COVID-19
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`pandemic, LuxUrban pivoted from providing short-term residential rentals of multi-family and
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`individual properties, to the hotel space. LuxUrban’s entry into the hotel space involved the
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`utilization of Master Lease Agreements (“MLAs”). By using MLAs, LuxUrban would not own
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`any of its hotels outright but would rather enter long term leases with hotels and then rent out the
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`rooms themselves, generating revenue from room rentals and other hotel fees such as check-in and
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`check-out fees and food services. This opportunity was limited, so LuxUrban sought to quickly
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`increase the number of hotels under its MLAs to fund operations and future growth.
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`3.
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`In August 2023, recognizing its own limited experience in hotel management, the
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`Company announced that it was partnering with Wyndham Hotels & Resorts, Inc. (“Wyndham”).
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`This partnership with Wyndham would purportedly increase LuxUrban’s brand recognition and
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`streamline the Company’s hotel business by rebranding the Company’s hotel portfolio into one of
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`Wyndham’s “Trademark Collection” and “Travelodge” brands. The partnership with Wyndham
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`also allowed the Company to utilize Wyndham’s online booking platform which would decrease
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`the Company’s operating costs. Wyndham also agreed to provide the Company with capital on a
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`property-by-property basis.
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`4.
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`During the Relevant Period, the Individual Defendants made multiple false and
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`misleading statements about the number of hotels with which the Company had executed MLAs.
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`On May 9, 2023 the Company claimed it had executed an MLA for the Trinity Hotel. Similarly,
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`on November 8, 2023, the Company claimed it had executed an MLA with the Royalton Hotel in
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`New York City. Weeks later, on November 30, 2023, the Company claimed it had executed an
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`MLA with the Truss Hotel in New York City. The Company also claimed it had executed an MLA
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`for the James NoMad Hotel in New York City, which would have been the largest MLA in the
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`Company’s history. In fact, all of these statements were false, as the Company in truth never signed
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`MLAs for any of the properties mentioned above.
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`5.
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`The truth began to emerge on January 17, 2024 when Bleecker Street Research
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`issued a report (the “Bleecker Street Report”) alleging that the Company had not actually executed
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`an MLA with The Royalton Hotel and that the Company had announced three other hotel deals
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`before the Company actually executed MLAs with the property owners. The Bleecker Street
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`Report also questioned disclosures in the Company’s Form 10-Q for the third quarter of 2023,
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`alleging that the Company did not have all of the disclosures required by the generally accepted
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`accounting principles in the United States of America (“GAAP”). The Bleecker Street Report also
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`noted issues with the Company’s Receivables from On-Line Travel Agents (the “OTAs”), stating:
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`The company recorded $22.8 million in revenues in Q1 2023, with none of those
`sales resulting in receivables from OTAs. But in Q2 and Q3, the combined revenue
`of $63 million resulted in ~$13 million in OTA pending payments. Even odder, the
`company switched to management under Wyndham in early Q3 (August), which
`management claims will result in fewer OTA bookings, but the QoQ [quarter over
`quarter] value of OTA Receivables went from $5.9 million to $12.9 million in this
`first quarter under the Wyndham banner.
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`6.
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`The Company disputed the allegations in the Bleecker Street Report, claiming that
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`the report had “multiple inaccuracies” and that Bleecker Street Research was not familiar with the
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`industry. LuxUrban also doubled down on its false statements by stating, “[a]s previously
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`announced, the Company is scheduled to begin welcoming guests on or before January 30, 2024
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`at The Royalton by LuxUrban, Trademark Collection® by Wyndham, and has a set date with the
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`property’s ownership to be delivered possession of the asset.”
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`7.
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`On this news, LuxUrban’s stock price fell $0.58 per share, or 12%, on January 17,
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`2024, and fell another $0.30 per share, or 10%, the following day, to close at $3.89 per share on
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`January 18, 2024.
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`8.
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` The truth continued to emerge when “The Royalton by LuxUrban, trademark
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`Collection ® by Wyndham” did not begin to welcome guests on January 30. Moreover, on
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`February 2, 2024, LuxUrban announced “the termination of discussions to add the Royalton Hotel
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`to its roster of properties,” and further stated that “a complete set of definitive agreements relating
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`to the lease were not, and will not be, entered into by the Company.” The Company then stated
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`that it would only announce acquisitions when the MLA process was fully completed. To soften
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`the blow to investors, however, Defendants falsely claimed that they had executed an MLA for the
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`James NoMad Hotel, alleging it was the largest executed MLA in the Company’s history.
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`9.
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`On this news, LuxUrban’s stock price fell $0.99 or 22%, to close at $3.50 per share
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`on February 5, 2024.
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`10.
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`The truth continued to emerge on March 12, 2024 when Bisnow reported (the
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`“Bisnow Report”) on LuxUrban’s purported deal with The Royalton Hotel having failed to
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`materialize. It also made allegations regarding additional deals that the Company had announced
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`that did not have executed MLAs, stating:
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`The company also said in its two most recent quarterly filings that it had the 179-
`room Trinity Hotel in Los Angeles “under lease,” a deal that was announced in
`May. The Chetrit Group owns that hotel and denies it has a deal with LuxUrban.
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`“The deal did not go through,” Michael Chetrit told Bisnow in an email.
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`Ferdinand told Bisnow that LuxUrban “fully executed a lease,” but claimed Chetrit
`didn't update the building at 741 Eighth Ave. to make the changes necessary for
`operating the hotel.
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`“We even wired them money which we have not gotten returned,” Ferdinand wrote.
`Ferdinand forwarded Bisnow an email, dated Oct. 2, from one of the company's
`attorneys, containing a draft letter to Chetrit outlining the lack of repairs at the
`building and demanding repayment.
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`In that letter, LuxUrban attorneys wrote, “As a result, we will not be executing
`the proposed lease and will not be taking possession of the Premises.”1
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`11.
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`On March 26, 2024, the Company announced that it had walked away from a deal
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`with an unnamed hotel, which was later confirmed to be the Trinity Hotel.
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`12.
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`On May 10, 2024, Bisnow reported that LuxUrban’s hotels were no longer
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`accessible on Wyndham’s online platforms. Three days later, on May 13, 2024, the Company
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`announced that, on May 6, 2024, the Company had terminated its franchise agreements with
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`1 All emphasis has been added unless otherwise noted herein.
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`Case 1:25-cv-02524 Document 1 Filed 03/27/25 Page 6 of 57
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`Wyndham and would be moving the Company’s hotel listings back under LuxUrban’s full control.
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`13.
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`On this news, LuxUrban’s stock price fell $0.085 per share, or almost 12%, from
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`a closing price of $0.709 on May 9, 2024 to close at $0.624 per share on May 10, 2024.
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`14.
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`The truth fully emerged on August 21, 2024 when the Company issued an
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`amendment on Form 10-Q with the SEC for a correct disclosure concerning the Company’s
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`financial statements and internal controls over financial reporting as of March 31, 2023 as set forth
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`in its first quarter of 2024 Form 10-Q. The Company reported, inter alia, that: (i) the Company
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`did not correctly apply charges allocated to the Channel Retained Funds, which resulted in a
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`decrease in the Channel Retained Funds in the amount of $1,500,000; (ii) the Company failed to
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`recognize a bad debt expense of $7,843,456; (iii) the Company incorrectly recognized revenue of
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`reservations that were cancelled by the merchant service provider in the amount of $2,633,926;
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`(iv) the Company incorrectly recognized receivables from On-line Travel Agencies in the amount
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`of $6,749,769; (v) the Company incorrectly recognized receivables from the City of New York to
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`the amount of $984,744; (vi) the Company did not reflect the net receivable due from the City of
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`New York to a reduction of $3,201,640; (vii) the Company did not properly amortize prepaid real
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`estate taxes in the amount of $342,212; and (viii) the Company incorrectly recognized revenue for
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`reservations that were paid for, but for which the guest had not yet stayed at the property, in the
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`amount of $8,050,248.
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`15.
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`On this news, the price of the Company’s common stock fell $0.003 per share, or
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`approximately 3.947%, from a closing price of $0.076 per share on August 20, 2024, to close at
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`$0.073 per share on August 21, 2024. The following trading day, it fell to $0.071 per share.
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`16.
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`Since the end of the Relevant Period, the Board has undergone numerous changes.
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`Indeed, immediately prior to December 19, 2024, the Board consisted of Defendants Toboroff and
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`Case 1:25-cv-02524 Document 1 Filed 03/27/25 Page 7 of 57
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`Nelson and non-parties Elan Blutinger (“Blutinger”), Kim Schaefer (“Schaefer”), and Alex
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`Lombardo (“Lombardo”). On December 19, 2024, Defendant Toboroff and non-party Schaefer
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`resigned. Defendant Nelson and non-parties Blutinger and Lombardo then nominated and elected
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`Elster to fill one of the vacancies. On December 20, 2024, Defendant Nelson resigned from the
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`Board and Blutinger, Lombardo, and Elster nominated Alex Moinian (“Moinian”), Daniel Shapiro
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`(“Shapiro”), Defendant Ferdinand, and Bradley Theodore (“Theodore”) to the Board. They also
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`reappointed Defendant Ferdinand as the Company’s CEO, thereby allowing him to continue
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`breaching his fiduciary duties to the Company.
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`17.
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`During the Relevant Period, the Individual Defendants breached their fiduciary
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`duties to the Company by personally making and/or causing the Company to make a series of
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`materially false and misleading statements to investors that failed to disclose, inter alia, that: (1)
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`LuxUrban had not signed an MLA for either the Royalton Hotel or the Truss Hotel, and neither
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`property was an “operating” property for LuxUrban; (2) neither the Royalton Hotel or the Truss
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`Hotel were “under lease,”; (3) LuxUrban had no basis to state that the Royalton Hotel or the Truss
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`hotel would “open[]” “on or around December 1, 2023,”; (4) the Trinity Hotel in Los Angeles was
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`not “under lease,”; (5) LuxUrban’s reported totals of properties under lease, operating, and
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`properties under lease, not operating, were materially overstated at all relevant times; and (6) the
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`statements created a false impression of the Company’s growth. As a result of the foregoing, the
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`Company’s statements were materially false and misleading and/or lacked a reasonable basis at all
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`relevant times. Additionally, the Individual Defendants breached their fiduciary duties by causing
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`the Company to fail to maintain adequate internal controls.
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`18.
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`The Company has been substantially damaged as a result of the Individual
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`Defendants’ knowing or highly reckless breaches of fiduciary duty and other misconduct.
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`19.
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`In light of the Individual Defendants’ misconduct—which has subjected the
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`Company, its former Chief Executive Officer (“CEO”), and its former Chief Financial Officer
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`(“CFO”) and Co-CEO to a federal securities fraud class action lawsuit pending in the United States
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`District Court for the Southern District of New York (the “Securities Class Action”) and which
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`has further subjected the Company to the need to undertake internal investigations, the need to
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`implement adequate internal controls, losses from the waste of corporate assets, and losses due to
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`the unjust enrichment of the Individual Defendants who were improperly overcompensated by the
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`Company and/or who benefitted from the wrongdoing alleged herein—the Company will have to
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`expend many millions of dollars.
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`20.
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`For the reasons set forth herein, a majority of the Board of Directors (the “Board”)
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`cannot consider a demand to commence litigation against themselves on behalf of the Company
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`with the requisite level of disinterestedness and independence.
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`JURISDICTION AND VENUE
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`21.
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`This Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1331 because
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`Plaintiff’s claims raise a federal question under Section 14(a) of the Exchange Act (15 U.S.C.
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`§ 78n(a)(1)), Rule 14a-9 of the Exchange Act (17 C.F.R. § 240.14a-9), Section 10(b) of the
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`Exchange Act (15 U.S.C. § 78j(b)), and Section 21D of the Exchange Act (15 U.S.C. § 78u-4(f)).
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`Plaintiff’s claims also raise a federal question pertaining to the claims made in the Securities Class
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`Action based on violations of the Exchange Act.
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`22.
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`This Court has supplemental jurisdiction over Plaintiff’s state law claims pursuant
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`to 28 U.S.C. § 1367(a).
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`23.
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`This derivative action is not a collusive action to confer jurisdiction on a court of
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`the United States that it would not otherwise have.
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`24.
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`Venue is proper in this District pursuant to 28 U.S.C. §§ 1391 and 1401 because a
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`substantial portion of the transactions and wrongs complained of herein occurred in this District
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`and the Defendants have received substantial compensation in this District by engaging in
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`numerous activities that had an effect in this District.
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`PARTIES
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`Plaintiff
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`25.
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`Plaintiff is a current shareholder of LuxUrban. Plaintiff has continuously owned
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`Company common stock at all relevant times.
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`Nominal Defendant LuxUrban
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`26.
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`LuxUrban is a Delaware corporation with its principal executive offices at 212
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`Biscayne Blvd, Suite 253, Miami, FL 33137. LuxUrban common stock trades on the OTC market
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`under the ticker symbol “LUXH.”
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`Defendant Ferdinand
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`27.
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`Defendant Ferdinand is a co-founder of the Company and co-founded the
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`Company’s predecessors, SoBeNY Partners LLC and Corphousing LLC. Defendant Ferdinand
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`served as the Company’s CEO since its inception until November 8, 2023. Defendant Ferdinand
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`then served as Co-CEO with Defendant Korthari until March 1, 2024, when Defendant Ferdinand
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`began to transition from the CEO position until May 31, 2024. Ferdinand continued to serve as
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`Executive Chairman of the Board until he resigned from the Board on June 27, 2024. He was
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`reappointed to the Board on December 20, 2024. Also on December 20, 2024, Defendant
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`Ferdinand was named as Interim CEO.
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`28.
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`During the Relevant Period, before the false and misleading statements were
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`exposed, Defendant Ferdinand sold approximately 726,556 shares of Company stock on inside
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`information, for which he received approximately $5,100,806 in proceeds. His insider sales, made
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`with knowledge of material nonpublic information before the material misstatements and
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`omissions were exposed, demonstrate his motive in facilitating and participating in the schemes.
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`29.
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`The Form 8-K the Company filed with the SEC on December 20, 2024 stated the
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`following about Defendant Ferdinand:
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`Mr. Ferdinand has served as Interim Chief Executive Officer and as a member of our Board
`since December 2024. Previously, Mr. Ferdinand served as Chief Executive Officer and
`Chairman of the Board of the Company prior to transitioning into a consultant
`role. Mr. Ferdinand was the Founder and Manager of both Corphousing LLC and SoBeNY
`Partners LLC prior to their conversions into C corporations in January 2022, and has been
`the Chief Executive Officer (or Co-Chief Executive Officer) and Chairman of the Board
`of our company since that date. Prior to founding our company in 2017, Mr. Ferdinand was
`Chief Operating Officer and a partner at VacationRentals LLC, a provider of loyalty-
`branded, hotel-alternative accommodations, and prior to that, from 2011 through 2014,
`Mr. Ferdinand served as a member of the Board of Directors and Head of Corporate
`Strategy at Liquid Holdings, Inc. (“Liquid”), a designer and operator of fintech-based
`brokerage order execution platforms and services. Liquid filed for Chapter 11bankruptcy
`protection in January 2016. From 2002 through 2011, Mr. Ferdinand served as Managing
`Director and partner at ECHOTrade LLC, a proprietary trading firm, where he oversaw
`that company’s expansion from 30 to nearly 1000 licensed traders working in offices
`throughout the United States and internationally in a joint back-office partnership with
`Merrill Lynch and Bank of America. Mr. Ferdinand entered into an Offer of Settlement
`with the Securities and Exchange Commission on April 22, 2020, in connection with
`allegations that he, as a board member of Liquid Holdings Group Inc., (a) reviewed a Form
`10-Q and signed a Form 10-K for the fiscal year 2013 that failed to disclose material facts
`of Liquid’s reliance on a related party entity (a principal customer of Liquid and a company
`of which Mr. Ferdinand was an owner) and from which Liquid received material
`subscription fees, and (b) failed to file required Forms 4 and amendments to Schedule 13D
`to reflect material changes to his ownership in Liquid’s shares of common stock, causing
`Liquid to violate Section 13(a), 13(d)(2) and 16(a) of the Exchange Act and related rules
`thereof. Mr. Ferdinand consented, without admitting or denying any findings, to a cease
`and desist order from any alleged secondary violations of Section 17(a)(2) of the Securities
`Act and 13(a) of the Exchange Act, which are non-scienter provisions in which negligence
`is sufficient to establish liability for causing a primary violation; and Section 13(d)(2) and
`Section 16(a) of the Exchange Act, which are personal security reporting provisions under
`which strict liability is sufficient to establish a violation. As a result of the settlement,
`Mr. Ferdinand was also required to pay a fine of $115,000.
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`Defendant Kothari
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`30.
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`Defendant Kothari served as the Company’s CFO from January 2022 until June
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`2024. Defendant Kothari also served as the Company’s President from November 30, 2022 until
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`June 2024. Defendant Kothari was also appointed as Co-CEO with Defendant Ferdinand from
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`November 2023 until March 2024, when Defendant Kothari served as sole CEO until his
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`termination on June 10, 2024.
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`31.
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`The Schedule 14A the Company filed with the SEC in 2023 (the “2023 Proxy
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`Statement”) stated the following about Defendant Kothari:
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`Mr. Kothari has been our Chief Financial Officer since January 2022 and our
`President since January 2023. From January 2019 until September 2021, Mr.,
`Kothari was the Chief Financial Officer of NuZee Inc (Nasdaq: NUZE), an
`environmentally friendly coffee co-packing services company. From July 2020
`until May 2021, Mr. Kothari also served, in dual capacity, as NuZee’s Chief
`Operating Officer. In addition, Mr. Kothari served as a director of NuZee from
`October 2019 to March 2021. Prior to joining NuZee, Mr. Kothari was a Managing
`Director at B. Riley FBR, Inc. (“FBR”) from June 2014 until September 2018,
`where he oversaw the provision of a wide range of financial services to FBR’s oil
`and gas clients. From September 2012 to June 2014, Mr. Kothari was the Chief
`Financial Officer of a private oil and gas refinery joint venture with HollyFrontier.
`Mr. Kothari was an investment banker at Credit Suisse working in the energy
`industry investment segment from June 2005 until September 2012. From
`May 1998 until April 2003, Mr. Kothari served in variety of capacities for
`BindView Development, a publicly traded software company, including as Chief
`Financial Officer (from January 2001 to May 2001). Mr. Kothari was senior auditor
`at Price Waterhouse, an international accounting and consulting firm, from
`June 1995 to May 1998. Mr. Kothari has more than 25 years of accounting, finance
`and capital markets experience. Mr. Kothari holds a BA in Accounting from
`Southern Methodist University and an MBA from Rice University. Mr. Kothari is
`also a licensed CPA and CIA and possesses Series 7 / 24 / 63 licenses.
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`Defendant Toboroff
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`32.
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`Defendant Toboroff served as a Company director from June 2021 to December
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`2024. Defendant Toboroff also served as a member of the Audit Committee.
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`33.
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`The 2023 Proxy Statement stated the following about Defendant Toboroff:
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`Mr. Toboroff has served as one of the independent directors of our company since
`June 2021. Mr. Toboroff is a private investor. He was the Executive Vice President
`and Vice Chairman of the Board of Allis-Chalmers Energy Inc., a provider of
`products and services to the oil and gas industry, from 1988 to 2007. He was a
`director (and finance committee member) and Vice Chairman of Riddell Sports
`Corp., a sporting goods manufacturer, from 1988 to 2003. From 1998 until its sale
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`in 2006, Mr. Toboroff was a director (and finance committee member) and Vice
`Chairman of Varsity Brands, Inc. a provider of goods and services to the school
`spirit industry. From 1988 to 1995 he was a director (and finance committee
`member) of Saratoga Springs Water Co. From 1989 to 1998, he was Managing
`Director of the Corinthian Capital Group, LLC, a private equity fund. From 2005
`to 2008, Mr. Toboroff was a director (and finance committee member) of ENGEX
`Corp., a closed-end mutual fund. From 2001 to 2004, he was a director of NOVT
`Corp. a developer of advanced medical treatments for coronary and vascular
`disease. From 2006 to 2009, he was a director of Asset Alliance Corp., an
`alternative investment company. From 1987 to 1988, Mr. Toboroff was Head of
`M&A at Rooney Pace Co. Investment Bank. From 1980 to 1990, Mr. Toboroff was
`the Chairman or Vice Chairman of American Bakeries Co., a Fortune 500 company.
`Mr. Toboroff also has been a founding shareholder in various companies that
`completed their public offering including in fields of game technology,
`crowdfunding, and medical marijuana. Mr. Toboroff was a practicing attorney from
`1960 to 1990, engaging in appellate practice in various federal courts and the U.S.
`Supreme Court and is a member of the US Supreme Court Historical Society. Mr.
`Toboroff is a graduate of Syracuse University and the University of Michigan Law
`School.
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`Defendant Nelson
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`34.
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`Defendant Nelson served as a Company director from August 2022 until
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`December 2024. Defendant Nelson also served as the Chair of the Audit Committee.
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`35.
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`The 2023 Proxy Statement stated the following about Defendant Nelson:
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`Ms. Nelson has served as one of our independent directors since consummation of
`our IPO in August 2022. From June 2020 to present, Ms. Nelson has provided
`various clients with financial and strategic consulting services through her firm,
`AJAY Ventures. From January 2020 to June 2020, she was the Chief Financial
`Officer of Cuisine Global, a plant-based food and lifestyle company, where she
`implemented new accounting and vendor management systems, oversee assets
`sales, and created annual budgets and strategic plans. From April 2014 to May
`2018, she was a Managing Director at Fifth Third Bank, a national bank, where she
`oversaw a portfolio of corporate lending clients, ranging from starts ups to mature
`high-revenue businesses. From January 2012 to April 2014 she was a consultant to
`Wild Oats, LLC, a development stage company funded by Yucaipa Companies,
`overseeing the formation of a joint venture with Daymon Worldwide to launch
`more than 160 fresh foods and nonfood products through global retail chains. From
`June 2010 to December 2011 she was a finance consultant to Key Development,
`LLC, a family office, consulting with that company on the areas of business
`acquisitions and opportunities. From 1999 to May 2010 she worked in various
`capacities at national banks, including JPMorgan Chase, Compass Bank, Wachovia
`Bank and Park Cities Bank, where she helped building portfolios of banking clients
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`Case 1:25-cv-02524 Document 1 Filed 03/27/25 Page 13 of 57
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`and assisted in business growth initiatives, including in the areas of real estate and
`commercial real estate lending. She received her BBA from Texas Christian
`University and her MBA from Southern Methodist University.
`
`Defendant Webb
`
`36.
`
`Defendant Webb served as Company director from August 2022 until December
`
`2024. Defendant Webb also served as a member of the Audit Committee.
`
`37.
`
`The 2023 Proxy Statement stated the following about Defendant Webb:
`
`Mr. Webb has served as one of our independent directors since consummation of
`our IPO in August 2022. Mr. Webb became Chairman and Chief Executive Officer
`of Varsity Brands when that company was formed in 2012 from the merger of
`Varsity Spirit Corporation, a company founded by Mr. Webb, and Herff Jones, a
`leading producer of high school and college graduation apparel and class rings. He
`stepped down as CEO of Varsity Brands in 2016. He continued to serve as Chief
`Executive Officer of Varsity Brands through its acquisition by Bain Capital Private
`Equity for $2.8 billion in 2018, and ultimately retired as its Chairman in 2020. In
`1974, Mr. Webb founded Varsity Spirit Corporation, a company that develops
`nationwide training camp systems, distributes uniforms and equipment, and
`produces national televised championship competitions, tours and performance for
`and featuring collegiate and high school spirit and cheerleading organizations.
`Events produced by Varsity Spirit Corporation include high-profile events such as
`the Macy’s Thanksgiving Day Parade in New York, the Citrus Bowl, and various
`European events. Prior to founding Varsity Spirit Corporation, from 1972 to 1974,
`he served in various capacities with Cheerleader Supply Company, a distributor of
`spirit and cheerleading uniforms and equipment, including as its Vice President and
`General Manager. Mr. Webb is the founder of the Universal Cheerleading
`Association (UCA). He is also the founder and current President of the International
`Cheer Union, the world governing body of the sport of cheerleading. Mr. Webb
`received his B.S. degree in political science from the University of Oklahoma.
`
`Defendant Berg
`
`38.
`
`Defendant Berg served as Company director from August 2022 until December
`
`2024.
`
`
`
`39.
`
`The 2023 Proxy Statement stated the following about Defendant Berg:
`
`Mr. Berg has served as one of our directors since consummation of our IPO in
`August 2022. Since January 2018, Mr. Berg has served as Partner of Infinity
`Collective, parent company of Infinity Real Estate, a private real estate investment
`and development company based in New York that owns, manages, and has
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`Case 1:25-cv-02524 Document 1 Filed 03/27/25 Page 14 of 57
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`developed over two million square feet of space, overseeing Infinity’s middle-
`market acquisitions, investment ventures, and the implementation of the firm’s
`overall investment strategy within Infinity’s expanding portfolio in New York City,
`Washington, D.C., Philadelphia, and Miami. From September 2011 to December
`2018, he was Director of Investments at Infinity. From April 2010 to September
`2011, Mr. Berg served as an Investment Manager at Monday Properties, a real
`estate investment firm that owns and operates properties primarily in New York
`City and the greater Washington, D.C. metro area where he focused on the asset
`management of Class-A office towers. From August 2009 to April 2010, Mr. Berg
`was Vice President of Acquisitions at Mermelstein Development, an international
`real estate company principally engaged in the acquisition, ownership, investment,
`management and development of residencial, commercial and mixed-use
`properties, where he focused on mixed-use multi-family and retail-oriented
`investments. Mr. Berg started his career as an Investment Banking Analyst at RBC
`Capital Markets from June 2008 to July 2009. Mr. Berg graduated from the
`Goizueta Business School at Emory University.
`
`Defendant Chatmon
`
`40.
`
`Defendant Chatmon served as Company director from November 2021 until
`
`February 2024. Defendant Chatmon also served as the Company’s Chief Operating Officer
`
`(“COO”) from November 2022 and Executive Vice President from November 2017 until February
`
`2024.
`
`
`
`41.
`
`The 2023 Proxy Statement stated the following about Defendant Chatmon:
`
`Mr. Chatmon was named Chief Operating Officer in November 2022. He has
`served as our Executive Vice President since November 2017 and as a director of
`our company since November 2021. In this role he has helped our company grow
`in the short-term rental marketplace, drawing upon his prior experience and
`analytical expertise in designing our daily pricing and distribution strategies, while
`overseeing our revenue management team. Before joining our company, from July
`2016 to November 2017, Mr. Chatmon worked in sales and revenue management
`at Vacation Rentals LLC, a provider of loyalty-branded, hotel-alternative
`accommodations. Mr. Chatmon earned his B.S. in Business Administration from
`the University of Miami in 2015.
`
`FIDUCIARY DUTIES OF THE INDIVIDUAL DEFENDANTS
`
`42.
`
`By reason of their positions as officers, directors, and/or fiduciaries of LuxUrban
`
`and because of their ability to control the business and corporate affairs of LuxUrban, the
`
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