FILED: NEW YORK COUNTY CLERK 04/06/2022 06:44 PM
`NYSCEF DOC. NO. 1
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`INDEX NO. 651731/2022
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`RECEIVED NYSCEF: 04/06/2022
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`SUPREME COURT OF THE STATE OF NEW YORK
`COUNTY OF NEW YORK
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`BROOME 302 REALTY LLC,
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`OMAR’S LES LLC, JOHN MINGIONE,
`and XYZ PARTIES,
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` Defendants.
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`Plaintiff,
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`-against-
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`Index No.
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`SUMMONS
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`TO THE ABOVE-NAMED DEFENDANT(S):
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`YOU ARE HEREBY SUMMONED and required to serve upon plaintiff’s attorney an
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`answer to the complaint in this action within twenty (20) days after the service of this summons,
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`exclusive of the day of service, or within thirty (30) days after the service is complete if this
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`summons is not personally delivered to you within the State of New York. In case of your failure
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`to answer, judgment will be taken against you in default for the relief demanded in the complaint.
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`Dated: New York, New York
`April 5, 2022
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`CERVINI SWANSON LLP
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` By:
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`
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`Scott L. Swanson
`420 Lexington Avenue, # 2250
`New York, New York 10170
`Tel. 212-931-5600
`sswanson@csllplaw.com
`Counsel for Plaintiff
`Broome 302 Realty LLC
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`FILED: NEW YORK COUNTY CLERK 04/06/2022 06:44 PM
`NYSCEF DOC. NO. 1
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`INDEX NO. 651731/2022
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`RECEIVED NYSCEF: 04/06/2022
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`
`SUPREME COURT OF THE STATE OF NEW YORK
`COUNTY OF NEW YORK
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`BROOME 302 REALTY LLC,
`
`
`
`
`
`OMAR’S LES LLC, JOHN MINGIONE,
`and XYZ PARTIES,
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` Defendants.
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`
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`
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`Plaintiff,
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`-against-
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`Index No.
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`VERIFIED COMPLAINT
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`Plaintiff Broome 302 Realty LLC (“Plaintiff” or “Landlord”), by its attorneys Cervini
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`Swanson LLP, alleges as follows as and for its Verified Complaint in the captioned action (the
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`“Action”) against defendants Omar’s LES LLC (“Defendant” or “Tenant”), John Mingione
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`(“Defendant Guarantor” and, together with Defendant, referred to collectively as “Defendants”
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`and, together with Landlord, referred to collectively as the “Parties”) together with the other to-
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`be-named insiders and transferees of Defendant referred to in the caption as XYZ Parties
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`(“Defendant Transferees”):
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`I.
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`NATURE OF ACTION
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`1.
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`This Action is commenced by a local landlord against a corporate tenant and its
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`individual guarantor to recover unpaid rents and damages for defaults under a 2019 commercial
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`lease of a ground-floor and basement premises known as unit 1A (the “Premises”) at the building of
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`Landlord locally known as 302 Broome Street, New York, New York (the “Building”) and a
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`related guaranty with additional claims for fraudulent conveyance in connection with recent
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`transfer of assets away from the tenant entity by its ownership to avoid payment to the landlord.
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`II.
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`PARTIES
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`2.
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`Plaintiff is a New York limited liability company with a principal place of business
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`FILED: NEW YORK COUNTY CLERK 04/06/2022 06:44 PM
`NYSCEF DOC. NO. 1
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`INDEX NO. 651731/2022
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`located at 150 Great Neck Road, Suite 304, Great Neck, New York 11021.
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`3.
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`Defendant is a New York limited liability company with a registered address for
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`service of process located at 450 West 42nd Street, Apt. 17B, New York, New York 10036.
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`4.
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`Upon information and belief, Defendant Guarantor is an New York resident with a
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`residential address located at 450 West 42nd Street, Apt. 17B, New York, New York 10036.
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`III.
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`JURISDICTION AND VENUE
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`5.
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`This Court has personal jurisdiction over Defendants pursuant to CPLR §§ 301 and
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`302(a)(1) and (2) because, inter alia, each of them regularly transacts business in New York State,
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`because the causes of action alleged herein arise out of their transaction of business within the
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`State, and because their conduct has caused foreseeable injury to persons within the State. Venue
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`is proper pursuant to CPLR § 503 because, inter alia, the parties maintain a principal place of
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`business within the county and the contract between the parties identifies the county as the
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`appropriate venue for this action.
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` IV.
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`STATEMENT OF FACTS
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`The Lease and Guaranty Between the Parties
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`A.
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`6.
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`7.
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`Landlord is the owner of the Building at 302 Broome Street, New York, New York.
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`Defendant is an operating entity of Defendant Guarantor which leased the Premises,
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`a first floor and basement space in the Building, from Landlord pursuant to written ten-year lease
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`dated August 1, 2019 (the “Lease”) with a term which commenced after six-month free-rent period
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`on February 1, 2020 and expired on January 31, 2030. See Lease, ¶ 40.
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`8.
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`The obligations of Defendant under the Lease were secured by, inter alia, a
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`personal guaranty from Defendant Guarantor (the “Guaranty”) which unconditionally guaranteed
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`the performance of all obligations of Defendant under the Lease.
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`9.
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`Relevant terms of the Lease and the Guaranty are outlined below.
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`2
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`FILED: NEW YORK COUNTY CLERK 04/06/2022 06:44 PM
`NYSCEF DOC. NO. 1
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`INDEX NO. 651731/2022
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`RECEIVED NYSCEF: 04/06/2022
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`i.
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`The Broad Assumption of Risk by Defendant under the Lease
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`10.
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`Notably, by numerous terms of the Lease, Defendant broadly assumed all risk and
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`responsibility associated with use of the Premises and performance under the Lease with
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`Defendant expressly leasing the Premise, inter alia: (i) on an “as is” basis without any
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`representation or warranty by Landlord with respect to the Premises or its use [see, e.g., id., ¶¶ 42
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`and 20]; and (ii) with all responsibility for use of the Premises in compliance with all laws allocated
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`exclusively to Tenant [see, e.g., id., ¶¶ 6 and 45]; and (iii) without any force-majeure excuse of
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`performance in favor of Defendant [see, e.g., id., ¶¶ 26].
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`11.
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`Further, pursuant to the Lease, Defendant specifically agreed to limit its remedies
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`against Defendant with provisions that included, inter alia: (i) waived any rights of Defendant to
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`assert defenses our counterclaims in connection with the payment of rent [see, e.g., id., ¶ 40(D)];
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`(ii) disclaimed any liability of Landlord to Defendant for “any damage or injury resulting from or
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`arising from any other cause or happening whatsoever, unless caused by the gross negligence or
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`willful misconduct of Landlord, or Landlord's agents, employees or contractors” [id., ¶ 43]; (iii)
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`disclaimed any excuse of performance by Defendant by reason of interruption of utilities [see, e.g.,
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`id., ¶ 47]; and (iv) disclaimed any responsibility for repairs to the Premises other than structural
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`repairs [see, e.g., id., ¶ 49].
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`ii.
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`Ongoing Monetary Obligations of Defendant under the Lease
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`12.
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`Pursuant to the Lease, Defendant assumed ongoing rent obligations which were
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`unconditional in nature and expressly payable to Landlord each month “without notice or demand,
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`and without abatement, offset, reduction, deduction, defense or counterclaim” [id., ¶ 40(D)]
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`including: (i) fixed rents of $25,000 per month subject to annual escalations [id., ¶ 40(D)] (“Fixed
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`Rent”); (ii) additional rents such as real-estate tax escalations [id., ¶ 44] and utilities [id., ¶ 47]
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`(collectively, “Additional Rents”) and (iii) replenish any security deposit within fifteen days
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`3
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`INDEX NO. 651731/2022
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`following demand by Landlord [see, e.g., id., ¶ 63].
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`iii.
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`Other Additional Rights and Obligations of Defendant under the Lease
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`13.
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`In addition, the Lease imposed other ongoing obligations on Defendant in
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`connection with the leasing relationship including, inter alia: (i) indemnification obligations to
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`Landlord to reimburse Landlord for any damages incurred as a result of any acts or omissions by
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`Defendant including defaults of the Lease [see, e.g., id., ¶ 48]; (ii) restrictions preventing
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`Defendant from making any non-structural alterations to the Premises costing more than
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`$25,000.00 without the written consent of Landlord [see, e.g., id., ¶ 51(A)]; (iii) obligation to
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`provide all notices, demands and/or requests to Landlord in writing pursuant to the notice provision
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`of the Lease [see, e.g., id., ¶ 57].
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`14.
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`In addition, the Lease also established the rights and obligations of Defendant upon
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`the expiration or early termination of the Lease and/or re-entry of Landlord onto the Premises
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`including provisions which established that, inter alia: (i) property installed and/or left at the
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`Premises was property of Landlord [see, e.g., id., ¶¶ 3 and 56]; (ii) Defendant was obligated to
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`remove all property from the Premises with any property not removed deemed abandoned [see,
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`e.g., id., ¶¶ 3, 4 and 56]; and (iii) Defendant was obligated to perform repairs to the Premises to
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`the extent that it did remove property from the Premises at the time it departed from the Premises
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`[see, e.g., id., ¶¶ 3, 4 and 56].
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`iv.
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`Default Remedies of Landlord under the Lease
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`15.
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`In the event of default by Defendant in payment of rents, the Lease provided
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`Landlord with various default remedies against Defendant (collectively, the “Default Remedies”)
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`including, inter alia: (i) rights to repossess the premises, recover all unpaid rents and relet the
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`Premises at the expense of Defendant [see, e.g., id., ¶¶ 17, 18 and 54]; (ii) rights to recover all
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`unpaid rents through the natural expiration of the term of the Lease either on an accelerated-
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`4
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`FILED: NEW YORK COUNTY CLERK 04/06/2022 06:44 PM
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`INDEX NO. 651731/2022
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`discounted basis [id., ¶ 54(A)] or on an ongoing basis with credit given for rents recovered from
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`any replacement tenant net of expenses [id., ¶ 54(B)]; (iii) rights to indemnification by Defendant
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`for any damages to Landlord resulting from defaults including reasonable attorneys’ fees [see, e.g.,
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`id., ¶ 48]; (iv) a one-time late charge of five (5) percent of any unpaid fixed rent not paid within
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`seven days of when due [id., ¶ 40(D)(i)]; (v) a default interest charge of twelve percent (12%) per
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`annum on all payments of fixed rents not paid within thirty days of when due [id., ¶ 40(D)(ii)];
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`(vi) the same default interest and late charges on additional rents [id.]; (vii) rights to perform
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`obligations of Defendant and seek payment from Defendant for such performance with interest at
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`the default rate [see, e.g., id., ¶ 59];and (viii) rights to recover reasonable attorneys’ fees and
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`expenses associated with enforcement of its rights under the Lease [see, e.g., id., ¶¶ 19 and 48].
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`iv.
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`The Guaranty of the Lease by Defendant Guarantor
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`16.
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`Dated August 1, 2019, the Guaranty executed by Defendant Guarantor obligated
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`him to unconditionally perform all obligations of Defendant under the Lease absent the early
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`vacatur of Defendant from the Premises under certain specified circumstances (collectively, the
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`“Guaranty Release Conditions”) including but not limited to: (i) Defendant “giving Landlord at
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`least thirty (30) days’ notice of its intention to vacate the Demised Premises”; (ii) Defendant
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`“surrender[ing] the Demised Premises to Landlord broom clean and vacant, and free of all
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`occupants; and (iii) Defendant “deliver[ing] to Landlord a key to the Demised Premises.”
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`Guaranty, p. 1.
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`17.
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`Relevant here, the Guaranty also qualified the ability of Defendant to obtain early
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`relief from liability under the Guaranty under the Guaranty Release Conditions by providing that
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`any vacatur of the Premises by Defendant within three (3) years of the commencement of rent
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`obligations under the Lease on February 1, 2020 (i.e. before February 1, 2023) entitled Landlord
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`to recover from Defendant Guaranty $150,000 in addition to his other obligations under the
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`FILED: NEW YORK COUNTY CLERK 04/06/2022 06:44 PM
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`INDEX NO. 651731/2022
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`Guaranty in connection with free-rent provided under the Lease (the “Guaranty Early
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`Termination Damages”). Id., pp. 1-2.
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`18.
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`Also, relevant here, the Guaranty specifically established that Defendant
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`Guarantor’s claims to payment from Defendant were subordinate to those of Landlord unless and
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`until the obligations of Defendant under the Lease which were guaranteed under the Guaranty were
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`paid in full (the “Guaranty Subordination Obligation”).
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`B.
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`Defendants’ Defaults under the Lease and Guaranty
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`19.
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`Defendant has remained in near constant default since the Lease commenced.
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`20.
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`The obligation of Defendant to start payments of rent under the Lease commenced
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`on February 1, 2020 after receiving six (6) months of free rent pursuant to the Lease.
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`21.
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`Throughout the entire term of the Lease, Defendant has made just four (4) payments
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`to Landlord including the security deposit of $100,000 (the “Security Deposit”) provided by
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`Defendant at the outset of the Lease. See Lease, ¶¶ 31 and 63.
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`22.
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`Other than the Security Deposit, the only payments made by Defendant under the
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`Lease to date have been: (i) a payment of $25,000 made on or about February 10, 2020; (ii) a
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`payment of $25,000 made on or about March 17, 2020; and (iii) a payment of $6,250.00 made on
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`or about November 3, 2020.
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`23.
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`Since November of 2020, Defendant has not made a single payment to Landlord
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`despite continuing to retain possession of the Premises during all periods since.
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`24.
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`Nor has Defendant Guarantor ever made any payment under the Guaranty.
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`C.
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`Defendants’ Open Repudiation of the Lease and Return
`of Possession of the Premises to Landlord in March of 2022
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`25.
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`After Defendant made its last payment to Landlord in November of 2020,
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`Defendant Guarantor caused Defendant to remain in possession of the Premises for another year
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`and a half without payment of a single dollar to Landlord before openly repudiating the Lease.
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`FILED: NEW YORK COUNTY CLERK 04/06/2022 06:44 PM
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`INDEX NO. 651731/2022
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`RECEIVED NYSCEF: 04/06/2022
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`26.
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`At the beginning of March of 2022, Defendant openly advised Landlord that it
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`would not live up to its obligations under the Lease – asserting that it had unilaterally terminated
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`the Lease and returning possession of the space to Landlord at that time.
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`27.
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`These events are reflected in correspondence between the parties during this period.
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`28.
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`For example, a letter dated March 9, 2022 from counsel for Defendant, Gary Miller
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`(“Defendant Counsel”), to Landlord confirmed the purported unilateral termination of the Lease
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`by Defendant due to COVID-related difficulties and its “tender [of] possession of the Premises to
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`you, the Landlord” (the “Termination Letter”).
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`29.
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`Likewise, in an email response to the Termination Letter dated March 17, 2022, in-
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`house counsel for Landlord, Shaun Kashanian (“Landlord Counsel”), confirmed to Defendant
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`Counsel that Landlord had received the Termination Letter and retaken possession of the Premises.
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`30.
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`By email on the same day, Defendant Counsel affirmatively acknowledged this
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`communication from Landlord Counsel without objection and attempted to schedule a call with
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`Landlord Counsel at the end of the month solely for the stated purpose of resolving the issue of
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`rental arrears and discussing a potential transfer of the liquor license.1
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`31.
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`In accordance with its rights under the Lease, after recovering possession of the
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`Premises, Landlord relet the Premises to a third party (the “Replacement Tenant”) and thereby
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`mitigate the damages of Defendant under the Lease.
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`32.
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`This immediate re-let of the Premises occurred to the direct benefit of Defendant
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`as a corporation which remained responsible for all obligations under the Lease notwithstanding
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`Defendant’s purported unilateral termination of the contract.
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`1 Although not relevant for purposes of this Action, in subsequent communications with Defendant Counsel at the end
`of March of 2022, Landlord discovered that the liquor license possessed for the Defendant Business had been
`suspended for over a year and had no value.
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`7
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`INDEX NO. 651731/2022
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`RECEIVED NYSCEF: 04/06/2022
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`D.
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`Damages of Landlord and Default Liabilities
`of Defendants under the Lease and Guaranty
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`33.
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`The damages to Landlord resulting from the conduct of Defendants continue to
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`accrue but the known contract damages payable to Landlord under the Lease through the time that
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`Landlord recovered possession of the Premises in March of 2022 include: (i) unpaid Fixed Rent
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`of more than $550,000; (ii) unpaid Additional Rents including real-estate tax escalations; (iii)
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`unpaid late charges of not less than $27,500.00; (iv) unpaid default interest of twelve percent (12%)
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`per annum in an amount not less than $96,000.00 and continuing to accrue; (v) costs incurred by
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`Landlord in connection with the relet of the Premises; (vi) unpaid indemnification obligations
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`incurred by Landlord in connection with the defaults of Defendant under the Lease; (vii)
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`reasonable attorneys’ fees and costs incurred by Landlord in connection with its enforcement of
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`its rights under the Lease; and (vii) other ongoing obligations under the Lease which continue to
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`accrue.
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`34.
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`Likewise, subject to any potential claim of protection by Defendant Guarantor
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`under New York Administrative Law § 22-1005 (the “Guarantor Law”) for protection from
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`liability for obligations accrued under the Lease for periods between March 7, 2020 and March 31,
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`2021, Defendant Guarantor himself is liable for all of the obligations accrued under the Lease and
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`which continue to accrue insofar the Guaranty Release Conditions did not occur as required for
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`Defendant Guarantor to be released from liability.
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`35.
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`Further, Defendant Guarantor is also liable to Landlord for an additional $150,000
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`in Guaranty Early Termination Damages insofar as Defendant purported to terminate the Lease
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`and vacate the Premises less than three (3) years prior to commencement of the Lease on February
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`1, 2020.
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`36.
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`Further, as further detailed in the next section, Landlord has also discovered that
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`Defendant Guarantor is otherwise liable for Landlord for breach of the Guaranty Subordination
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`Obligation insofar as Defendant Guarantor diverted assets of Defendant to pay himself before all
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`(or any) guaranteed obligations of Landlord under the Lease were paid.
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`E.
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`Landlord’s Discovery of Other Related Wrongdoing by Defendants
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`37.
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`In addition to the payment defaults by Defendants under the Lease and Guaranty,
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`Landlord has discovered other additional wrongdoing by Defendant Guarantor himself and
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`through Defendant in connection with the leasing relationship.
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`38.
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`Notably, while continuing to cause Defendant to use and occupy the Premises
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`between 2020 and March of 2022 without payment of rent, Defendant Guarantor sought and
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`obtained on behalf of Defendant government relief funds in excess of $250,000 between 2020 and
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`2021 (the “Relief Funds”) which Defendant utilized for himself and other insiders of the company.
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`39.
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`Further, in the periods leading up to Defendant’s exit from the Premises in March
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`of 2022, Defendant Guarantor and the other to-be-named insiders of Defendant completely looted
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`the company and all of its assets which was purportedly assetless and insolvent at the time that
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`Defendant Guarantor caused Defendant to relinquish possession of the Premises.
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`40.
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`This wholesale diversion of assets away from Defendant by Defendant Guarantor
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`and the other insiders of the company in and after March of 2020, during periods when Defendant
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`was in completely insolvent, in chronic default of its obligations to Landlord, and subject to
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`millions of dollars in liabilities under the Lease, is a classic violation of fraudulent conveyance
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`laws of New York Debtor Creditor Laws (the “DCL”) as modified in 2020 pursuant to the Uniform
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`Voidable Transactions Act (“UVTA”).
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`41.
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`Further, the transfer of assets of Defendant to pay Defendant Guarantor, in
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`particular, was also a violation of the Guaranty Subordination Obligation under the Guaranty
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`insofar as this provision of the Guaranty established that Defendant Guarantor had no right to
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`payment from Defendant unless and until all obligations of Landlord under the Lease were paid.
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`FILED: NEW YORK COUNTY CLERK 04/06/2022 06:44 PM
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`AS AND FOR A FIRST CAUSE OF ACTION
`Breach of Lease
`(Against Defendant)
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`Plaintiff realleges each of the foregoing paragraphs of the Complaint.
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`42.
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`43.
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`As detailed above, Landlord and Defendant entered into the Lease.
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`44.
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`As detailed above, Landlord performed its obligations under the Lease.
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`45.
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`As detailed above, Defendant breached the Lease by, inter alia, failing to pay its
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`rent obligations to Landlord despite due demand and notice of default by Landlord and openly
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`repudiating its obligations to Landlord under the Lease.
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`46.
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`As detailed above, in the event of such breaches of the Lease, the Lease entitles
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`Landlord to various Default Remedies.
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`47.
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`As a direct and proximate result of the misconduct of Defendant, Landlord has been
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`damaged.
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`48.
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`By reason of the foregoing, Defendant is liable to Landlord in an amount to be
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`determined at trial.
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`AS AND FOR A SECOND CAUSE OF ACTION
`Breach of Guaranty
`(Against Defendant Guarantor)
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`Plaintiff realleges each of the foregoing paragraphs of the Complaint.
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`49.
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`50.
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`As detailed above, Landlord and Defendant entered into the Lease.
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`51.
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`As detailed above, Defendant Guarantor unconditionally guaranteed performance
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`of the obligations of Defendant under the Lease pursuant to the Guaranty.
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`52.
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`As detailed above, Defendant Guarantor breached the Guaranty by, inter alia,
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`failing to pay the monetary obligations of Defendant to Landlord under the Lease and failing to
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`comply with the Guaranty Subordination Obligation.
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`FILED: NEW YORK COUNTY CLERK 04/06/2022 06:44 PM
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`53.
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`Pursuant to the Guaranty, Defendant Guarantor agreed to perform all obligations of
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`Defendant under the Lease.
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`54.
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`Pursuant to the Guaranty, Defendant Guarantor agreed to pay the Guaranty Early
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`Termination Damages.
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`55.
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`As a direct and proximate result of the misconduct of Defendant Guarantor,
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`Landlord has been damaged.
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`56.
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`By reason of the foregoing, Defendant Guarantor is liable to Landlord in an amount
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`to be determined at trial.
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`AS AND FOR A THIRD CAUSE OF ACTION
`Attorneys’ Fees
`(Against Defendants)
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`Plaintiff realleges each of the foregoing paragraphs of the Complaint.
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`57.
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`58.
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`As detailed above, Landlord and Defendant entered into the Lease with obligations
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`of Defendant secured by the Guaranty from Defendant Guarantor.
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`59.
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`As detailed above, the Lease obligates Defendant to pay the reasonable attorneys’
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`fees and costs incurred by Landlord in connection with the enforcement of the Lease.
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`60.
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`As detailed above, the Guaranty obligates Defendant Guarantor to pay the
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`reasonable attorneys’ fees and costs incurred by Landlord in connection with enforcement of the
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`Guaranty.
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`61.
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`As detailed above, Defendant Guarantor unconditionally guaranteed performance
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`of the obligations of Defendant under the Lease pursuant to the Guaranty.
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`62.
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`As detailed above, Defendants have breached their obligations under the Lease and
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`the Guaranty by, inter alia, failing to pay the monetary obligations of Defendant.
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`FILED: NEW YORK COUNTY CLERK 04/06/2022 06:44 PM
`NYSCEF DOC. NO. 1
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`INDEX NO. 651731/2022
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`RECEIVED NYSCEF: 04/06/2022
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`63.
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`As a direct and proximate result of the misconduct of Defendants, Landlord has
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`been damaged and incurred substantial legal fees and costs in connection with the enforcement of
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`the Lease and the Guaranty.
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`64.
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`By reason of the foregoing, Defendant and Defendant Guarantor are each liable
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`jointly and severally liable to Landlord in an amount to be determined at trial.
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`AS AND FOR A FOURTH CAUSE OF ACTION
`Insider Transfer Avoidance Pursuant to UVTA §§ 274(b) and 276 and Related Laws
`(Against Defendants and Defendant Transferees)
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`Plaintiff repeats and realleges the foregoing paragraphs of the Complaint.
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`65.
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`66.
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`During all periods in and after March of 2021, Defendant was insolvent within the
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`meaning of section 271(a) of the UVTA with the sum of its debts greater than the sum of its assets
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`at a fair valuation.
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`67.
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`Further, pursuant to section 271(b) of the UVTA, Defendant is presumed to be
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`insolvent at law throughout this period because, as alleged above, Defendant has not been paying
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`its debts to Plaintiff as they became due during the periods in question.
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`68.
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`Section 274(b) of the UVTA provides that transfers made from insolvent debtors
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`like Defendant to insiders are voidable as fraudulent conveyances – even where for antecedent
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`debts – where the insider had reasonable cause to believe that the debtor was insolvent.
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`69.
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`Here, transfers by Defendant to Defendant Guarantor and the other to-be-named
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`insiders of the company defined herein as Defendant Transferees are voidable on these grounds as
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`the UVTA defines insiders to include, inter alia: (i) affiliates of debtors [see, e.g., id., § 270(h)(4)];
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`(ii) officers and persons in control of a corporate debtor, as well as insiders of affiliates of the
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`debtor [see, e.g., id., § 270(h)(2)(ii) and (iii) and (h) (4)]; and (iii) other related parties [see, e.g.,
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`UVTA § 270(h)(2)(i),(ii), (iii) and (vi), and (h) (4)].
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`70.
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`Defendant Guarantor and the other Defendant Transferees received transfers from
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`FILED: NEW YORK COUNTY CLERK 04/06/2022 06:44 PM
`NYSCEF DOC. NO. 1
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`INDEX NO. 651731/2022
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`RECEIVED NYSCEF: 04/06/2022
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`Defendant in and after March of 2021 through direct and indirect payments on their behalf
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`including payments of the proceeds of the Relief Funds including transfers through, inter alia: (i)
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`payments for purported antecedent debts; (ii) payments of distribution and other compensation;
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`(iii) payments to affiliates; (iv) other utilizations of resources of Defendant for the individual
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`purposes of Defendant Guarantor; and (v) other related payments and transfers made to, on behalf
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`of and/or for the benefit of each such party.
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`71.
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`Each of Defendants and Defendant Transferees knew and had reasonable cause to
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`believe that Defendant was insolvent at the time that the aforementioned transfers were made as
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`Defendant was an operating entity under the dominion and control of these parties who were
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`intimately aware of all aspects of the financial affairs of Defendant as well as the claims against it
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`including that of Plaintiff.
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`72.
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`The aforementioned transfers were made without an exchange of reasonably
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`equivalent value or fair consideration, without provision of new value to or for the benefit of the
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`debtor, outside of the ordinary course and financial affairs of the debtor, and without any good-
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`faith intent.
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`73.
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`The aforementioned transfers were made on account of antecedent debts.
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`74.
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`Accordingly, the transfers made from Defendant in and after March of 2021 to all
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`of the above parties are voidable pursuant to section 274(b) of the UVTA.
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`75.
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`Further, pursuant to section 276 of the UVTA, Plaintiff is entitled to and seeks to
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`obtain from Defendant Guarantor and the other Defendant Transferees, inter alia: (i) avoidance of
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`the above transfers to the extent necessary to satisfy its claim; (ii) an attachment of the assets of
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`Defendant including the Debtor Business and the assets of Defendant in the hands of all such
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`parties; (iii) related injunctive and provisions relief to prevent against further disposition of
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`property of Defendant; (iv) appointment of a receiver to take charge of Defendant and its assets
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`FILED: NEW YORK COUNTY CLERK 04/06/2022 06:44 PM
`NYSCEF DOC. NO. 1
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`INDEX NO. 651731/2022
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`RECEIVED NYSCEF: 04/06/2022
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`whether in the hands of the debtor or its transferees; (v) additional relief as circumstances may
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`require; and (vi) levy execution upon any asset transferred or its proceeds in connection with any
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`judgment obtained by Plaintiff against Defendant.
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`76.
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`Further, by reason of the foregoing, Defendants and Defendant Transferees are
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`liable to Plaintiff in an amount to be determined at trial.
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`AS AND FOR A FIFTH CAUSE OF ACTION
`Constructive Fraudulent Conveyance Pursuant to DCL §§ 273, 274, 275 and 278
`Constructive Fraudulent Conveyance Pursuant to UVTA §§ 273, 274 and 276
`and Related Laws
` (Against Defendants and Defendant Transferees)
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`Plaintiff repeats and realleges the foregoing paragraphs of the Complaint.
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`77.
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`78.
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`As stated above, Defendant, Defendant Guarantor and other to-be-named insiders
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`of Defendant identified as Defendant Transferees transferred the assets of Defendant away from
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`the company in and after March of 2020 without fair consideration or reasonably equivalent value.
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`79.
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`As set forth above, the property transferred away from Defendant during this period
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`includes but is not limited to: (i) the proceeds of the Relief Funds and other income and government
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`funds obtained by Defendant Guarantor during the periods in question; and (iii) the other assets of
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`Defendant including property removed from the Premises prior to and as of March of 2022.
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`80.
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`As set forth above, these transfers of property away from Defendant occurred by
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`means including, inter alia: (i) direct transfers to Defendant Guarantor and the other insiders of
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`Defendant; (ii) payments of distributions and other compensation; (iii) payments to affiliates; (iv)
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`utilization of resources of Defendant for the individual purposes of Defendant Guarantor and his
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`affiliates; and (v) other related payments and/or transfers of property made to, on behalf and/or for
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`the benefit of each such party.
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`81.
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`These transfers away from Defendant were made: (i) without its receipt of
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`reasonably equivalent value or fair value in exchange for the transfer and the debtor was engaged
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`FILED: NEW YORK COUNTY CLERK 04/06/2022 06:44 PM
`NYSCEF DOC. NO. 1
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`INDEX NO. 651731/2022
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`RECEIVED NYSCEF: 04/06/2022
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`or was about to engage in a business or a transaction for which the remaining assets of the debtor
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`were unreasonably small in relation to the business or transaction and/or intended to incur, or
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`believed or reasonably should have believed that the debtor would incur, debts beyond the debtor's
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`ability to pay as they became due [see UVTA § 273(a)(2)]; and (ii) without receiving a reasonably
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`equivalent value in exchange for the transfer and while the debtor was insolvent at that time or the
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`debtor became insolvent as a result of the transfer or obligation [see UVTA § 274(a)].
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`82.
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`Accordingly, pursuant to UVTA § 273 and 274, these transferred constituted
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`voidable constructive fraudulent conveyances.
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`83.
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`Accordingly, pursuant to section 276 of the UVTA, Plaintiff is entitled and seeks
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`to obtain from Defendants and Defendant Transfers, inter alia: (i) avoidance of the above transfers
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`to the extent necessary to satisfy its claim; (ii) an attachment of the assets of Defendant including
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`the Defendant Business, its assets and proceedings in the hands of Defendant and the
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`aforementioned transferees; (iii) related injunctive and provisions relief to prevent against further
`
`disposition of property of Defendant; (iv) appointment of a receiver to take charge of Defendant
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`and its assets whether in the hands of the debtor or its transferees; (v) additional relief as
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`circumstances may require; and (vi) levy execution upon any asset transferred or its proceeds in
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`connection with any judgment obtained by Plaintiff against Defendant.
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`84.
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`Further, by reason of the foregoing, Defendants and Defendant Transferees are
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`liable to Plaintiff in an amount to be determined at trial plus interest as well as costs and fees
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`associated with the action, including reasonable attorneys’ fees.
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