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FILED: NEW YORK COUNTY CLERK 04/25/2022 02:39 PM INDEX NO. 153512/2022
NYSCEF DOC. NO. 11 RECEIVED NYSCEF: 04/25/2022
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
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JARDAN 520 LLC, :
: Index No.
Petitioner, :
- against - :
:
BVS ACQUISITION CO. LLC; M&T BANK; and :
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STREET LENDER LLP :
Respondents. :
:
:
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MEMORANDUM OF LAW IN SUPPORT OF RELIEF UNDER CPLR §§ 5225(b)
AND 5227, AND CONFIRMATION OF PRIORITY EXECUTION PURSUANT TO
CPLR § 5239
LAW OFFICE OF DAVID SOROKOFF LLC
488 Madison Avenue, Suite 1120
New York, NY 10022
(212) 600-2063
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SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
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JARDAN 520 LLC, :
: Index No.
Petitioner, :
- against - :
: MEMORANDUM OF LAW IN
BVS ACQUISITION CO. LLC; M&T BANK; and : SUPPORT OF RELIEF UNDER
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STREET LENDER LLP : CPLR §§ 5225(b) AND 5227, AND
: CONFIRMATION OF PRIORITY
Respondents. : EXECUTION PURSUANT TO
: CPLR § 5239
:
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Petitioner Jardan 520 LLC ("Petitioner"), by and through its undersigned attorney,
respectfully submits this memorandum of law in support of its Petition, pursuant to CPLR §§ 5225
and 5227, for the turnover of more than $3.2 million in funds belonging to judgment
("BVS"
debtor/respondent, BVS Acquisition Co. LLC or "Debtor"), that are currently held in an
account maintained by respondent M&T Bank. Petitioner also seeks a confirmation of to the
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priority of itsexecution as against respondent Street Lender LLP Street Lender").
PRELIMINARY STATEMENT
Petitioner holds a judgment of more than $17.9 million dollars against BVS and others,
jointly and severally. It has a first priority lien against the bank account at M&T Bank owned by
BVS. Petitioner enjoys this position of priority because it (i)obtained a judgment against BVS
from this Court on or about June 30, 2021; (ii)restrained the BVS account atM&T Bank through
service of a restraining notice on or about December 13, 2021; and (iii)properly sought to execute
against the BVS account maintained at M&T Bank by service of execution papers to the Office of
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the Sheriff of New York on or about 2022 - prior to other creditor. M&T
County February 3, any
Bank was fully prepared to release the funds in accordance with Petitioner's levy.
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At the eleventh hour, however, the bank received a letter from Street Lender
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threatening the bank with legal action if itreleased the funds to Petitioner. Street Lender's
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letter did not allege that it had a claim with greater priority than Petitioner. Instead, Street
Lender simply provided M&T Bank with a series of false and misleading arguments in order to
thwart Petitioner's lawful execution. As a consequence, Petitioner brings this special proceeding
to obtain a formal order from the Court directing M&T Bank to release the funds in issue to
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Petitioner. Should Street Lender appear and seek to challenge the turnover of the funds,
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Petitioner also seeks an order from the Court confirming its priority execution over
Lender.
STATEMENT OF FACTS
The facts relevant to the Petition are set forth in the accompanying Affirmation of K.
Heather Robinson, Esq. ("Robinson Aff.") and the Verified Petition ("Pet.") and may be
summarized as follows.
On or about June 30, 2021, Petitioner obtained a judgment in the total amount of
$17,952,875.64 (the "Judgment") in the Supreme Court of the State of New York, County of New
York, in the matter styled Jardan 520, LLC v. BVS Acquisition Co. LLC et al., Index No.
657143/2020 (Dkt. No. 50). (Robinson Aff., Ex. A; Pet. ¶ 7). BVS is jointly and severally liable
to Petitioner for the fullamount of the Judgment. (Robinson Aff., Ex. A; Pet. ¶ 8). To date, BVS
has made a single payment on the Judgment in the amount of $38,875.00. (Pet. ¶ 9). The
remainder of the Judgment remains due and owing, and is continuing to accrue interest at the
statutory rate of 9% per annum from the date of entry of the Judgment. (Id).
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On or about December 13, 2021, Petitioner, through counsel, served M&T Bank with a
Restraining Notice, Exemption Notice with 2 Exemption Claim Forms, and Information Subpoena
(in duplicate), as well as a copy of the Judgment and the Affirmation of K. Heather Robinson Filed
June 30, 2021. (Robinson Aff., Ex. B; Pet. ¶ 10). Debtor, and itscounsel, were also served with
copies of the documents served upon M&T Bank. (Robinson Aff. ¶ 5; Pet. ¶ 11). Debtor made no
objection to the Restraining Notice or Information Subpoena. (Robinson Aff. ¶ 6; Pet. ¶ 12).
In response to the Restraining Notice and Information Subpoena, M&T Bank identified
one account belonging to Debtor (the "BVS M&T Account") with the following amount on hold:
$3,287,342,77. (Robinson Aff., Ex. C; Pet. ¶ 13).
On or about February 3, 2022, Petitioner sought to levy on the BVS M&T Account by
serving the Office of the Sheriff of New York County (the "Office of the Sheriff") with an
Execution with Notice to Garnishee and related documents in support of execution. (Robinson
Aff., Ex. D; Pet. 14). Debtor was also served with copies of the foregoing papers and made no
¶
objection to the Execution with Notice to Garnishee. (Robinson Aff. $¶ 9-10; Pet. ¶¶ 15-16).
M&T Bank confirmed itsreceipt of the Execution with Notice to Garnishee from the Office
of the Sheriff on or about February 11, 2022 and reported that the bank intended to release the
funds in the BVS M&T Account to be paid over to Petitioner on or about March 10, 2022.
(Robinson Aff. ¶ 1 1;Pet. ¶ 17). No competing claims to the funds had been served. (Robinson
Aff. ¶ 11).
The funds, however, were not released to the Office of the Sheriff. Upon inquiry, Petitioner
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learned that M&T Bank was threatened with legal action through a letter served by
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Lender (the Street Lender Demand Letter") if itcomplied with Petitioner's lawful execution.
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(Robinson Aff. 12; Ex. E; Pet. ¶ 18). Street Lender is also a creditor of Debtor and has
¶
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obtained one or more judgments against Debtor from this Court, including a September 21, 2021
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judgment entered in the matter styled Street Lender LLP, as Administrative Agent for
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Street REP H LP, and Street Lender LLP, as Lenders v. David Novicki, as Co-Executor ofthe
Estate of Louis L. Ceruzzi, Jr., Charles Mantel, as Co-Executor of the Estate of Louis L. Ceruzzi
Jr., and BVS Acquisition Co. LLC, Index No. 655250/2020 (See Dkt. No. 55). (Pet. ¶ 19).
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In the Street Lender Demand Letter, Street Lender did not claim priority of
execution or that itever sought to execute upon the BVS M&T Account, and Petitioner has never
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received evidence of a competing claim for priority from Street Lender. (Robinson Aff., Ex.
E; Pet. ¶ 20). No valid or competing claim for priority exists given the reports received from M&T
11-12).1
Bank between February and March 2022. (Id.;Robinson Aff. ¶¶
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Instead, the Street Lender Demand Letter refers to a subsequent restraining notice
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served on M&T Bank by Street Lender and separately discusses the insolvency of the Estate
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of Louis L. Ceruzzi, Jr. (the "Ceruzzi Estate"). (Robinson Aff., Ex. E; Pet. ¶ 22). The Street
Lender Demand Letter argues as follows:
We have recently served a restraining notice and information subpoena on the Bank
and have been informed that CMTG Lender 7, LLC or Rabina Properties, LLC,
another judgment creditor, has also served a restraining notice on the Bank in
connection with the same debtors. We hereby put you on notice that that [sic] the
Bank should not turn over any monies to CMTG Lender 7, Rabina Properties, or
any other judgment creditor, as this will severely damage our client and interfere
with its ability to recover itsjudgment . ..
The Co-Executors of the Estate have recently informed all interested parties that
the liabilities of the Estate exceed its assets and that an imminent bankruptcy
petition will likely be filed. In view of the insolvency of the Estate, any payments
to CMTG Lender 7, Rabina Properties, or any other creditor will constitute
preferential payments and will be returned to the Estate for distribution to creditors
in accordance with priority of estate distribution under applicable law. In short, the
I M&T Bank reported could not not because of because
Indeed, that it release funds competing executions but instead
of the notice served 866 StreetLender connection with theBVS M&T Account. (Robinson
restraining allegedly by in
Aft ¶¶ 11-12; Pet.¶ 22).
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payment of the $3 million to Rabina, or any creditor, will expose the Bank to a
claim by my client for wrongful distribution in light of the insolvent Estate.
The Ceruzzi Estate is a Connecticut probate estate that, upon information and belief, owns
the membership interests of BVS. (Pet. ¶ 22). However the Ceruzzi Estate and BVS are separate
legal entities. While the Ceruzzi Estate was declared insolvent under Connecticut state law on or
about April 4, 2022, the order of insolvency relates only to the Estate, not BVS, and does not
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impact the obligations owed by Debtor to Petitioner. (Robinson Aff., Ex. F; Pet. ¶ 22). Street
Lender was and is fully aware of this fact, and that the execution against the BVS M&T Account
is an execution against the assets of Debtor, not the Estate (Robinson Aff., Exs. B-D; Pet. ¶ 23).
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Upon information and belief, the Street Lender Demand Letter was an improper
attempt to interfere with the Petitioner's execution against the BVS M&T Account. (Pet. ¶ 24).
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Thus, by letter dated March 18, 2022, Petitioner demanded that Street Lender retract itsletter.
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(Robinson Aff., Ex. G; Pet. ¶ 25). Street Lender failed to do so. Accordingly, Petitioner now
seeks an order from this Court directing the turnover of the funds in the BVS M&T Account to
Petitioner. (Robinson Aff. ¶ 19; Pet. ¶ 26).
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Should Street Lender appear in the proceeding, Petitioner asks also for an order from
the Court confirming itspriority execution.
ARGUMENT
L Petitioner Is Entitled To An Order Directing M&T Bank to Turnover Funds In
The BVS M&T Account
CPLR article 52 sets forth procedures for the enforcement of money judgments.
Specifically, CPLR §§ 5225(b) and/or 5227 afford Petitioner the right to obtain through an
expedited and special proceeding an order directing M&T Bank to turnover funds in the BVS
M&T Account to Petitioner.
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CPLR § 5225(b) provides as follows:
(b) not in the possession of judgment debtor. Upon a special proceeding commenced
Property
by the judgment creditor, against a person in possession or custody of money or other personal
property in which the judgment debtor has an interest, or against a person who is a transferee of
money or other personal property from the judgment debtor, where it is shown that the
judgment debtor is entitled to the possession of such property or that the judgment creditor's
rights to the property are superior to those of the transferee, the court shall require such
person to pay the money, or so much of it as is sufficient to satisfy the judgment, to the
judgment creditor and, if the amount to be so paid is insufficient to satisfy the judgment, to
deliver any other personal property, or so much of it as is of sufficient value to satisfy the
judgment, to a designated sheriff... (emphasis added).
CPLR § 5227, in turn, provides as follows:
Payment of debts owed to judgment debtor. Upon a special proceeding commenced by the
judgment creditor, against any person who itis shown is or will become indebted to the judgment
debtor, the court may require such person to pay to the judgment creditor the debt upon maturity,
or so much of it as is sufficient to satisfy the judgment, and to execute and deliver any document
necessary to effect payment; or itmay direct that a judgment be entered against such person in
favor of the judgment creditor. . .
Under article 52 of the CPLR, if a petitioner can prove: (i) itsstatus as judgment creditor;
and (ii)the existence of funds in the possession of a third party in which the Debtor holds an
interest, then the petitioner is entitled to an order of turnover of those assets unless the transferee
can assert a superior claim. See, e.g., HFH Capital, LLC v. Bliant Specialty Hosp., 2022 WL
971815 (Sup. Ct. Kings Cty. March 28, 2022) ("Here, petitioner, after service of restraining notices
and upon confirmation from the bank that it is in possession of funds in which the judgment
debtor(s) holds an interest, properly proceeds pursuant to CPLR 5225(b) to secure a turnover of
such funds from Region."). Futterman v. JP. Morgan Chase Bank, 2011 WL 4193280 (Sup. Ct.
N.Y. Cty. Aug. 18, 2011) (turnover petition granted where the petitioner demonstrated its status
as judgment creditor, demonstrated that the banking institution held funds belonging to the debtor,
and the banking institution did not allege a competing claim to the funds in issue).
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Petitioner has submitted proof of its status as a judgment creditor of BVS through its
submission ofthe Judgment. Petitioner has also submitted proof in the form of itsVerified Petition
that the entirety of the Judgment ($17,952,875.64 plus post judgment interest), less a payment of
$38,875.00, remains due and outstanding.
Petitioner has further submitted proof that third-party M&T Bank is in custody of funds
belonging to BVS through its submission of the response to Information Subpoena provided by
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M&T Bank, which identifies the BVS M&T Account. While Street Lender, in itsletter, sought
to suggest that the funds in issue belong to the Ceruzzi Estate, M&T Bank reported in the
Information Subpoena that the BVS M&T Account belongs to BVS. Any suggestion otherwise
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made by Street Lender is nothing more than an ill-considered conflation of the Ceruzzi Estate
and BVS for the improper purpose of interfering with Petitioner's execution. BVS is a Delaware
limited liability company. And under Delaware law, a member of a limited liability company has
no interest in specific limited liability company property. 6 Del. C. § 18-70L See also, Opus E.,
LLC. v. Opus, L L C.(In re Opus E, LLC.), 480 B.R. 561, 575 (Bankr. D. Del. 2012) ("As sole
member of OEM, the Debtor does not have any interest in OEM's property including any cause of
action alleging that OEM suffered an injury."). Accord Stone & Paper Inv'rs, LLC v. Blanch,
2020 Del. Ch. LEXIS 225, at *25-26, n 40 (Del. Ch. June 29, 2020) (citing Opus).
Finally, M&T Bank has never asserted a superior right to the funds in issue. To the
contrary, M&T Bank reported that itintended to release the funds in response to Petitioner's lawful
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execution until itreceived the threat of legal action from Street Lender.
Given the foregoing, Petitioner's request for a turnover order of the funds in the M&T Bank
Account to Petitioner should be granted.
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IL Should Street Lender Appear, Petitioner Is Entitled To a Confirmation of
Its Priority Execution
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Should Street Lender appear in the proceeding to contest the turnover of the funds in
the BVS M&T Account, Petitioner is entitled to a confirmation of its priority as the first creditor
of Debtor to deliver an execution to the Office of the Sheriff relating to the funds held in the BVS
M&T Account.
CPLR § 5239 affords Petitioner the right to have determined through this proceeding any
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adverse claims of priority that may be interposed by Street Lender:
Proceeding to determine adverse claims. Prior to the application of
property or debt by a sheriff or receiver to the satisfaction of a
judgment, any interested person may commence a special proceeding
against the judgment creditor or other person with whom a dispute exists
to determine rights in the property or debt. . . .
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Moreover, any adverse claims of priority that may be made by Street Lender should
be resolved in favor of Petitioner. All available evidence demonstrates that Petitioner was the
firstcreditor of Debtor to execute on the BVS M&T Account when it delivered itsexecution to
the Office of the Sheriff on or around February 3, 2022. Under settled law, Petitioner, as first to
deliver execution, is entitled to a confirmation of its priority status in connection with the release
of funds from the BVS M&T Account. See, e.g., CPLR § 5234(b) (priority based on delivery of
execution); Cornell v. T.V Dev. Corp., 50 Misc. 2d 422, 270 N.Y.S.2d 45 (Sup. Ct. Nassau Cty.,
Special Term, 1966) (execution first delivered to Sheriff is entitled to priority); Pach v. Gilbert,
124 N.Y. 612, 620 (1891) (priority of competing attachment and judgment creditors goes to the
party who firstdelivered his attachment/execution to the sheriff, and, under former Code the sheriff
has a duty "to give preference in the application of proceeds of a sale under junior executions to a
prior warrant of attachment although no levy be made thereunder. [Since] the warrant of
..."
attachment in question came firstinto [the sheriffs] hands the attachment creditor has priority
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over the judgment creditor who later delivered an execution); Truebner v. Voelbel Co. v.A. Melides
& Fils, 138 N.Y.S.2d 391, 393-94 (Sup. Ct. N.Y. Cty. 1954), affd, 285 A.D. 928 (1st Dept 1955)
(priority in distribution of proceeds given to attachment or judgment creditor who first delivered
his order of attachment or execution to the sheriff.
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For these reasons, and should Street Lender appear in this special proceeding,
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Petitioner requests that the Court confirm itspriority execution as against Street Lender.
CONCLUSION
For the foregoing reasons, Petitioner respectfully requests: (i) an order directing M&T
Bank to turnover the funds in the BVS M&T Account to Petitioner; and (ii)confirming itspriority
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of execution as against Street Lender.
Dated: April 25, 2022
New York, NY
LAW OFFICE OF DAVID SOROKOFF LLC
By: David Sorokoff
Its: Member
488 Madison Avenue, Suite 1120
New York, New York 10022
(212) 600-2063
Attorney for Petitioner Jardan 520 LLC
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Preview
FILED: NEW YORK COUNTY CLERK 04/25/2022 02:39 PM INDEX NO. 153512/2022 NYSCEF DOC. NO. 11 RECEIVED NYSCEF: 04/25/2022 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK ---------------------------- x JARDAN 520 LLC, : : Index No. Petitioner, : - against - : : BVS ACQUISITION CO. LLC; M&T BANK; and : 86th STREET LENDER LLP : Respondents. : : : ---------------------------- X MEMORANDUM OF LAW IN SUPPORT OF RELIEF UNDER CPLR §§ 5225(b) AND 5227, AND CONFIRMATION OF PRIORITY EXECUTION PURSUANT TO CPLR § 5239 LAW OFFICE OF DAVID SOROKOFF LLC 488 Madison Avenue, Suite 1120 New York, NY 10022 (212) 600-2063 1 of 10 FILED: NEW YORK COUNTY CLERK 04/25/2022 02:39 PM INDEX NO. 153512/2022 NYSCEF DOC. NO. 11 RECEIVED NYSCEF: 04/25/2022 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK ---------------------------- x JARDAN 520 LLC, : : Index No. Petitioner, : - against - : : MEMORANDUM OF LAW IN BVS ACQUISITION CO. LLC; M&T BANK; and : SUPPORT OF RELIEF UNDER 86th STREET LENDER LLP : CPLR §§ 5225(b) AND 5227, AND : CONFIRMATION OF PRIORITY Respondents. : EXECUTION PURSUANT TO : CPLR § 5239 : ---------------------------- X Petitioner Jardan 520 LLC ("Petitioner"), by and through its undersigned attorney, respectfully submits this memorandum of law in support of its Petition, pursuant to CPLR §§ 5225 and 5227, for the turnover of more than $3.2 million in funds belonging to judgment ("BVS" debtor/respondent, BVS Acquisition Co. LLC or "Debtor"), that are currently held in an account maintained by respondent M&T Bank. Petitioner also seeks a confirmation of to the 86th ("86th priority of itsexecution as against respondent Street Lender LLP Street Lender"). PRELIMINARY STATEMENT Petitioner holds a judgment of more than $17.9 million dollars against BVS and others, jointly and severally. It has a first priority lien against the bank account at M&T Bank owned by BVS. Petitioner enjoys this position of priority because it (i)obtained a judgment against BVS from this Court on or about June 30, 2021; (ii)restrained the BVS account atM&T Bank through service of a restraining notice on or about December 13, 2021; and (iii)properly sought to execute against the BVS account maintained at M&T Bank by service of execution papers to the Office of 2 of 10 FILED: NEW YORK COUNTY CLERK 04/25/2022 02:39 PM INDEX NO. 153512/2022 NYSCEF DOC. NO. 11 RECEIVED NYSCEF: 04/25/2022 the Sheriff of New York on or about 2022 - prior to other creditor. M&T County February 3, any Bank was fully prepared to release the funds in accordance with Petitioner's levy. 86th At the eleventh hour, however, the bank received a letter from Street Lender 86th threatening the bank with legal action if itreleased the funds to Petitioner. Street Lender's 86* letter did not allege that it had a claim with greater priority than Petitioner. Instead, Street Lender simply provided M&T Bank with a series of false and misleading arguments in order to thwart Petitioner's lawful execution. As a consequence, Petitioner brings this special proceeding to obtain a formal order from the Court directing M&T Bank to release the funds in issue to 86* Petitioner. Should Street Lender appear and seek to challenge the turnover of the funds, 86th Petitioner also seeks an order from the Court confirming its priority execution over Lender. STATEMENT OF FACTS The facts relevant to the Petition are set forth in the accompanying Affirmation of K. Heather Robinson, Esq. ("Robinson Aff.") and the Verified Petition ("Pet.") and may be summarized as follows. On or about June 30, 2021, Petitioner obtained a judgment in the total amount of $17,952,875.64 (the "Judgment") in the Supreme Court of the State of New York, County of New York, in the matter styled Jardan 520, LLC v. BVS Acquisition Co. LLC et al., Index No. 657143/2020 (Dkt. No. 50). (Robinson Aff., Ex. A; Pet. ¶ 7). BVS is jointly and severally liable to Petitioner for the fullamount of the Judgment. (Robinson Aff., Ex. A; Pet. ¶ 8). To date, BVS has made a single payment on the Judgment in the amount of $38,875.00. (Pet. ¶ 9). The remainder of the Judgment remains due and owing, and is continuing to accrue interest at the statutory rate of 9% per annum from the date of entry of the Judgment. (Id). 2 3 of 10 FILED: NEW YORK COUNTY CLERK 04/25/2022 02:39 PM INDEX NO. 153512/2022 NYSCEF DOC. NO. 11 RECEIVED NYSCEF: 04/25/2022 On or about December 13, 2021, Petitioner, through counsel, served M&T Bank with a Restraining Notice, Exemption Notice with 2 Exemption Claim Forms, and Information Subpoena (in duplicate), as well as a copy of the Judgment and the Affirmation of K. Heather Robinson Filed June 30, 2021. (Robinson Aff., Ex. B; Pet. ¶ 10). Debtor, and itscounsel, were also served with copies of the documents served upon M&T Bank. (Robinson Aff. ¶ 5; Pet. ¶ 11). Debtor made no objection to the Restraining Notice or Information Subpoena. (Robinson Aff. ¶ 6; Pet. ¶ 12). In response to the Restraining Notice and Information Subpoena, M&T Bank identified one account belonging to Debtor (the "BVS M&T Account") with the following amount on hold: $3,287,342,77. (Robinson Aff., Ex. C; Pet. ¶ 13). On or about February 3, 2022, Petitioner sought to levy on the BVS M&T Account by serving the Office of the Sheriff of New York County (the "Office of the Sheriff") with an Execution with Notice to Garnishee and related documents in support of execution. (Robinson Aff., Ex. D; Pet. 14). Debtor was also served with copies of the foregoing papers and made no ¶ objection to the Execution with Notice to Garnishee. (Robinson Aff. $¶ 9-10; Pet. ¶¶ 15-16). M&T Bank confirmed itsreceipt of the Execution with Notice to Garnishee from the Office of the Sheriff on or about February 11, 2022 and reported that the bank intended to release the funds in the BVS M&T Account to be paid over to Petitioner on or about March 10, 2022. (Robinson Aff. ¶ 1 1;Pet. ¶ 17). No competing claims to the funds had been served. (Robinson Aff. ¶ 11). The funds, however, were not released to the Office of the Sheriff. Upon inquiry, Petitioner 86th learned that M&T Bank was threatened with legal action through a letter served by "8631 Lender (the Street Lender Demand Letter") if itcomplied with Petitioner's lawful execution. 86th (Robinson Aff. 12; Ex. E; Pet. ¶ 18). Street Lender is also a creditor of Debtor and has ¶ 3 4 of 10 FILED: NEW YORK COUNTY CLERK 04/25/2022 02:39 PM INDEX NO. 153512/2022 NYSCEF DOC. NO. 11 RECEIVED NYSCEF: 04/25/2022 obtained one or more judgments against Debtor from this Court, including a September 21, 2021 86th 86th judgment entered in the matter styled Street Lender LLP, as Administrative Agent for 86th Street REP H LP, and Street Lender LLP, as Lenders v. David Novicki, as Co-Executor ofthe Estate of Louis L. Ceruzzi, Jr., Charles Mantel, as Co-Executor of the Estate of Louis L. Ceruzzi Jr., and BVS Acquisition Co. LLC, Index No. 655250/2020 (See Dkt. No. 55). (Pet. ¶ 19). 86th 86d' In the Street Lender Demand Letter, Street Lender did not claim priority of execution or that itever sought to execute upon the BVS M&T Account, and Petitioner has never 86th received evidence of a competing claim for priority from Street Lender. (Robinson Aff., Ex. E; Pet. ¶ 20). No valid or competing claim for priority exists given the reports received from M&T 11-12).1 Bank between February and March 2022. (Id.;Robinson Aff. ¶¶ 86th Instead, the Street Lender Demand Letter refers to a subsequent restraining notice 86th served on M&T Bank by Street Lender and separately discusses the insolvency of the Estate 86th of Louis L. Ceruzzi, Jr. (the "Ceruzzi Estate"). (Robinson Aff., Ex. E; Pet. ¶ 22). The Street Lender Demand Letter argues as follows: We have recently served a restraining notice and information subpoena on the Bank and have been informed that CMTG Lender 7, LLC or Rabina Properties, LLC, another judgment creditor, has also served a restraining notice on the Bank in connection with the same debtors. We hereby put you on notice that that [sic] the Bank should not turn over any monies to CMTG Lender 7, Rabina Properties, or any other judgment creditor, as this will severely damage our client and interfere with its ability to recover itsjudgment . .. The Co-Executors of the Estate have recently informed all interested parties that the liabilities of the Estate exceed its assets and that an imminent bankruptcy petition will likely be filed. In view of the insolvency of the Estate, any payments to CMTG Lender 7, Rabina Properties, or any other creditor will constitute preferential payments and will be returned to the Estate for distribution to creditors in accordance with priority of estate distribution under applicable law. In short, the I M&T Bank reported could not not because of because Indeed, that it release funds competing executions but instead of the notice served 866 StreetLender connection with theBVS M&T Account. (Robinson restraining allegedly by in Aft ¶¶ 11-12; Pet.¶ 22). 4 5 of 10 FILED: NEW YORK COUNTY CLERK 04/25/2022 02:39 PM INDEX NO. 153512/2022 NYSCEF DOC. NO. 11 RECEIVED NYSCEF: 04/25/2022 payment of the $3 million to Rabina, or any creditor, will expose the Bank to a claim by my client for wrongful distribution in light of the insolvent Estate. The Ceruzzi Estate is a Connecticut probate estate that, upon information and belief, owns the membership interests of BVS. (Pet. ¶ 22). However the Ceruzzi Estate and BVS are separate legal entities. While the Ceruzzi Estate was declared insolvent under Connecticut state law on or about April 4, 2022, the order of insolvency relates only to the Estate, not BVS, and does not 86* impact the obligations owed by Debtor to Petitioner. (Robinson Aff., Ex. F; Pet. ¶ 22). Street Lender was and is fully aware of this fact, and that the execution against the BVS M&T Account is an execution against the assets of Debtor, not the Estate (Robinson Aff., Exs. B-D; Pet. ¶ 23). 860' Upon information and belief, the Street Lender Demand Letter was an improper attempt to interfere with the Petitioner's execution against the BVS M&T Account. (Pet. ¶ 24). 86* Thus, by letter dated March 18, 2022, Petitioner demanded that Street Lender retract itsletter. 86th (Robinson Aff., Ex. G; Pet. ¶ 25). Street Lender failed to do so. Accordingly, Petitioner now seeks an order from this Court directing the turnover of the funds in the BVS M&T Account to Petitioner. (Robinson Aff. ¶ 19; Pet. ¶ 26). 86th Should Street Lender appear in the proceeding, Petitioner asks also for an order from the Court confirming itspriority execution. ARGUMENT L Petitioner Is Entitled To An Order Directing M&T Bank to Turnover Funds In The BVS M&T Account CPLR article 52 sets forth procedures for the enforcement of money judgments. Specifically, CPLR §§ 5225(b) and/or 5227 afford Petitioner the right to obtain through an expedited and special proceeding an order directing M&T Bank to turnover funds in the BVS M&T Account to Petitioner. 5 6 of 10 FILED: NEW YORK COUNTY CLERK 04/25/2022 02:39 PM INDEX NO. 153512/2022 NYSCEF DOC. NO. 11 RECEIVED NYSCEF: 04/25/2022 CPLR § 5225(b) provides as follows: (b) not in the possession of judgment debtor. Upon a special proceeding commenced Property by the judgment creditor, against a person in possession or custody of money or other personal property in which the judgment debtor has an interest, or against a person who is a transferee of money or other personal property from the judgment debtor, where it is shown that the judgment debtor is entitled to the possession of such property or that the judgment creditor's rights to the property are superior to those of the transferee, the court shall require such person to pay the money, or so much of it as is sufficient to satisfy the judgment, to the judgment creditor and, if the amount to be so paid is insufficient to satisfy the judgment, to deliver any other personal property, or so much of it as is of sufficient value to satisfy the judgment, to a designated sheriff... (emphasis added). CPLR § 5227, in turn, provides as follows: Payment of debts owed to judgment debtor. Upon a special proceeding commenced by the judgment creditor, against any person who itis shown is or will become indebted to the judgment debtor, the court may require such person to pay to the judgment creditor the debt upon maturity, or so much of it as is sufficient to satisfy the judgment, and to execute and deliver any document necessary to effect payment; or itmay direct that a judgment be entered against such person in favor of the judgment creditor. . . Under article 52 of the CPLR, if a petitioner can prove: (i) itsstatus as judgment creditor; and (ii)the existence of funds in the possession of a third party in which the Debtor holds an interest, then the petitioner is entitled to an order of turnover of those assets unless the transferee can assert a superior claim. See, e.g., HFH Capital, LLC v. Bliant Specialty Hosp., 2022 WL 971815 (Sup. Ct. Kings Cty. March 28, 2022) ("Here, petitioner, after service of restraining notices and upon confirmation from the bank that it is in possession of funds in which the judgment debtor(s) holds an interest, properly proceeds pursuant to CPLR 5225(b) to secure a turnover of such funds from Region."). Futterman v. JP. Morgan Chase Bank, 2011 WL 4193280 (Sup. Ct. N.Y. Cty. Aug. 18, 2011) (turnover petition granted where the petitioner demonstrated its status as judgment creditor, demonstrated that the banking institution held funds belonging to the debtor, and the banking institution did not allege a competing claim to the funds in issue). 6 7 of 10 FILED: NEW YORK COUNTY CLERK 04/25/2022 02:39 PM INDEX NO. 153512/2022 NYSCEF DOC. NO. 11 RECEIVED NYSCEF: 04/25/2022 Petitioner has submitted proof of its status as a judgment creditor of BVS through its submission ofthe Judgment. Petitioner has also submitted proof in the form of itsVerified Petition that the entirety of the Judgment ($17,952,875.64 plus post judgment interest), less a payment of $38,875.00, remains due and outstanding. Petitioner has further submitted proof that third-party M&T Bank is in custody of funds belonging to BVS through its submission of the response to Information Subpoena provided by 86th M&T Bank, which identifies the BVS M&T Account. While Street Lender, in itsletter, sought to suggest that the funds in issue belong to the Ceruzzi Estate, M&T Bank reported in the Information Subpoena that the BVS M&T Account belongs to BVS. Any suggestion otherwise 86th made by Street Lender is nothing more than an ill-considered conflation of the Ceruzzi Estate and BVS for the improper purpose of interfering with Petitioner's execution. BVS is a Delaware limited liability company. And under Delaware law, a member of a limited liability company has no interest in specific limited liability company property. 6 Del. C. § 18-70L See also, Opus E., LLC. v. Opus, L L C.(In re Opus E, LLC.), 480 B.R. 561, 575 (Bankr. D. Del. 2012) ("As sole member of OEM, the Debtor does not have any interest in OEM's property including any cause of action alleging that OEM suffered an injury."). Accord Stone & Paper Inv'rs, LLC v. Blanch, 2020 Del. Ch. LEXIS 225, at *25-26, n 40 (Del. Ch. June 29, 2020) (citing Opus). Finally, M&T Bank has never asserted a superior right to the funds in issue. To the contrary, M&T Bank reported that itintended to release the funds in response to Petitioner's lawful 86th execution until itreceived the threat of legal action from Street Lender. Given the foregoing, Petitioner's request for a turnover order of the funds in the M&T Bank Account to Petitioner should be granted. 7 8 of 10 FILED: NEW YORK COUNTY CLERK 04/25/2022 02:39 PM INDEX NO. 153512/2022 NYSCEF DOC. NO. 11 RECEIVED NYSCEF: 04/25/2022 86th IL Should Street Lender Appear, Petitioner Is Entitled To a Confirmation of Its Priority Execution 86* Should Street Lender appear in the proceeding to contest the turnover of the funds in the BVS M&T Account, Petitioner is entitled to a confirmation of its priority as the first creditor of Debtor to deliver an execution to the Office of the Sheriff relating to the funds held in the BVS M&T Account. CPLR § 5239 affords Petitioner the right to have determined through this proceeding any 86* adverse claims of priority that may be interposed by Street Lender: Proceeding to determine adverse claims. Prior to the application of property or debt by a sheriff or receiver to the satisfaction of a judgment, any interested person may commence a special proceeding against the judgment creditor or other person with whom a dispute exists to determine rights in the property or debt. . . . 86th Moreover, any adverse claims of priority that may be made by Street Lender should be resolved in favor of Petitioner. All available evidence demonstrates that Petitioner was the firstcreditor of Debtor to execute on the BVS M&T Account when it delivered itsexecution to the Office of the Sheriff on or around February 3, 2022. Under settled law, Petitioner, as first to deliver execution, is entitled to a confirmation of its priority status in connection with the release of funds from the BVS M&T Account. See, e.g., CPLR § 5234(b) (priority based on delivery of execution); Cornell v. T.V Dev. Corp., 50 Misc. 2d 422, 270 N.Y.S.2d 45 (Sup. Ct. Nassau Cty., Special Term, 1966) (execution first delivered to Sheriff is entitled to priority); Pach v. Gilbert, 124 N.Y. 612, 620 (1891) (priority of competing attachment and judgment creditors goes to the party who firstdelivered his attachment/execution to the sheriff, and, under former Code the sheriff has a duty "to give preference in the application of proceeds of a sale under junior executions to a prior warrant of attachment although no levy be made thereunder. [Since] the warrant of ..." attachment in question came firstinto [the sheriffs] hands the attachment creditor has priority 8 9 of 10 FILED: NEW YORK COUNTY CLERK 04/25/2022 02:39 PM INDEX NO. 153512/2022 NYSCEF DOC. NO. 11 RECEIVED NYSCEF: 04/25/2022 over the judgment creditor who later delivered an execution); Truebner v. Voelbel Co. v.A. Melides & Fils, 138 N.Y.S.2d 391, 393-94 (Sup. Ct. N.Y. Cty. 1954), affd, 285 A.D. 928 (1st Dept 1955) (priority in distribution of proceeds given to attachment or judgment creditor who first delivered his order of attachment or execution to the sheriff. 86th For these reasons, and should Street Lender appear in this special proceeding, 86th Petitioner requests that the Court confirm itspriority execution as against Street Lender. CONCLUSION For the foregoing reasons, Petitioner respectfully requests: (i) an order directing M&T Bank to turnover the funds in the BVS M&T Account to Petitioner; and (ii)confirming itspriority 86th of execution as against Street Lender. Dated: April 25, 2022 New York, NY LAW OFFICE OF DAVID SOROKOFF LLC By: David Sorokoff Its: Member 488 Madison Avenue, Suite 1120 New York, New York 10022 (212) 600-2063 Attorney for Petitioner Jardan 520 LLC 9 10 of 10