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  • Cresco Labs New York, Llc, a New York limited liability company, Cresco Labs Llc, An Illinois Limited Liability Company v. Fiorello Pharmaceuticals, Inc., a New York corporation, Eric Sirota, Susan Yoss, John Does 1 - 10 Commercial Division document preview
  • Cresco Labs New York, Llc, a New York limited liability company, Cresco Labs Llc, An Illinois Limited Liability Company v. Fiorello Pharmaceuticals, Inc., a New York corporation, Eric Sirota, Susan Yoss, John Does 1 - 10 Commercial Division document preview
  • Cresco Labs New York, Llc, a New York limited liability company, Cresco Labs Llc, An Illinois Limited Liability Company v. Fiorello Pharmaceuticals, Inc., a New York corporation, Eric Sirota, Susan Yoss, John Does 1 - 10 Commercial Division document preview
  • Cresco Labs New York, Llc, a New York limited liability company, Cresco Labs Llc, An Illinois Limited Liability Company v. Fiorello Pharmaceuticals, Inc., a New York corporation, Eric Sirota, Susan Yoss, John Does 1 - 10 Commercial Division document preview
  • Cresco Labs New York, Llc, a New York limited liability company, Cresco Labs Llc, An Illinois Limited Liability Company v. Fiorello Pharmaceuticals, Inc., a New York corporation, Eric Sirota, Susan Yoss, John Does 1 - 10 Commercial Division document preview
  • Cresco Labs New York, Llc, a New York limited liability company, Cresco Labs Llc, An Illinois Limited Liability Company v. Fiorello Pharmaceuticals, Inc., a New York corporation, Eric Sirota, Susan Yoss, John Does 1 - 10 Commercial Division document preview
  • Cresco Labs New York, Llc, a New York limited liability company, Cresco Labs Llc, An Illinois Limited Liability Company v. Fiorello Pharmaceuticals, Inc., a New York corporation, Eric Sirota, Susan Yoss, John Does 1 - 10 Commercial Division document preview
  • Cresco Labs New York, Llc, a New York limited liability company, Cresco Labs Llc, An Illinois Limited Liability Company v. Fiorello Pharmaceuticals, Inc., a New York corporation, Eric Sirota, Susan Yoss, John Does 1 - 10 Commercial Division document preview
						
                                

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FILED: NEW YORK COUNTY CLERK 06/05/2020 01:13 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 183 RECEIVED NYSCEF: 06/05/2020 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK --------------------------------------------------------X CRESCO LABS, NEW YORK, LLC, a New York limited liability company, and CRESCO Index No.: 652343/2018 LABS LLC, Hon. Andrew Borrok an Illinois limited liability company, Mot. Seq. No. 009 Plaintiffs, AFFIRMATION OF -against- RACHEL IZOWER- FADDE IN OPPOSITION FIORELLO PHARMACEUTICALS, INC., a TO MOTION FOR New York corporation, LEAVE TO AMEND Defendants. -------------------------------------------------------X RACHEL IZOWER-FADDE, an attorney admitted to practice law in the State of New York hereby affirms the following is true under penalties of perjury, as follows: 1. I am a member of the firm of Izower Feldman LLP, attorneys for defendant Fiorello Pharmaceuticals, Inc., (“Fiorello”). I submit this affirmation in opposition to Plaintiffs’ motion for leave to amend the amended complaint pursuant to CPLR 3025(b) (the “Motion”). I am fully familiar with the matters set forth herein. 2. The primary purpose of this affirmation is to provide the relevant procedural background and to attach documents relevant to the Court’s determination of the Motion. 1 of 21 FILED: NEW YORK COUNTY CLERK 06/05/2020 01:13 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 183 RECEIVED NYSCEF: 06/05/2020 THE LOI 3. This action arises from a February 14, 2018 Letter of Intent between Plaintiffs Cresco Labs, LLC and Cresco Labs NY, LLC (together “Plaintiffs” or “Cresco”) and Fiorello (the “LOI”). (Exhibit 1, is a true and correct copy of the LOI at issue in this action with the dollar amounts redacted.) The LOI is dated February 14, 2018 in its first paragraph, in the footnote on each page and in the signature block on its last page. 4. The “Timing” Provision which includes the 30 business day exclusivity period is on page 4 of the LOI, it also provides that the parties complete due diligence and draft and execute definitive agreement(s), “at the earliest possible date but not later than thirty (30) business days from the date of the execution of the LOI (unless otherwise extended by the mutual terms of the Parties).” The 30th business day after February 14, 2018, was March 29, 2018. March 29, 2018 passed without completion of due diligence, without reaching a definitive agreement and with a host of open issues remaining. 5. The “Confidentiality” Provision prohibits disclosure or use of confidential information “which would give it or any competitor or other interested party an advantage over its counterpart in these discussions” (¶3) and requires that the “execution of this LOI and the contemplated completion of this transaction” be kept strictly confidential (¶5). 2 2 of 21 FILED: NEW YORK COUNTY CLERK 06/05/2020 01:13 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 183 RECEIVED NYSCEF: 06/05/2020 DOH COMMUNICATIONS 6. After expiration of the LOI, Fiorello entered into a merger agreement with GTI on June 29, 2018. (Proposed SAC, ¶54). Fiorello submitted the merger agreement to the New York State Department of Health (“DOH”) for approval, but the DOH denied the proposed change in ownership attendant to the merger agreement. In letters denying the requested change in ownership of Fiorello, the DOH explained that: The proposed ownership change would result in GTI a proposed new investor, owning one hundred percent of Fiorello. … The Department has reviewed your request and hereby denies the proposed change in ownership, as it would constitute a direct transfer of the registration. In addition, Fiorello has not demonstrated progress towards beginning operations. …. Please submit an updated timeline demonstrating how Fiorello will begin operations, to the satisfaction of the Department by the end of the calendar year. August 23, 2018, DOH letter to Fiorello. [T]he registration issued to Fiorello is non-transferrable. The Department has reviewed your amended request and hereby denies the proposed change in ownership, as it would still constitute a direct transfer of the registration. Among other reasons, Fiorello has no satisfactory tangible operational assets to sell to Green Thumb Industries (GTI), except its registration, which is prohibited pursuant to 10 NYCRR § 1004.8 September 25, 2018, DOH letter to Fiorello. 7. In August, 2019, the DOH finally approved a merger between Fiorello and GTI only after they amended the merger agreement and after Fiorello had 3 3 of 21 FILED: NEW YORK COUNTY CLERK 06/05/2020 01:13 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 183 RECEIVED NYSCEF: 06/05/2020 become operational. (Attached together as Exhibit 2 are true and correct copies of the DOH’s letters of August 23, 2018 and September 25, 2018 addressing their rejection of the proposed Fiorello/GTI merger and its August 6, 2019 letter approving the amended merger after Fiorello became operational. The August 2019 letter has been redacted to reflect only the portion related to the merger approval.) 8. The DOH similarly initially rejected Cresco’s proposed acquisition of Valley Agriceuticals, LLC. On page 2 of an August 6, 2019 letter the DOH sent to Valley regarding the proposed acquisition by Cresco, the DOH referenced “Valley’s requested change in ownership which was previously denied on November 14, 2018.” (Exhibit 3 is a true and correct copy of that letter as produced by Cresco in discovery in this Action.) 9. After the merger, both Susan Yoss and Eric Sirota ceased their roles as Fiorello’s co-CEOs, both remain on Fiorello’s board of directors, which is an uncompensated position. (Exhibit 4 is a true and correct copy of the disclosure of this information provided to Cresco during discovery in this Action.) PROCEDURAL HISTORY 10. Cresco commenced this action on May 11, 2018 by summons with notice (NYSCEF 1). 11. Cresco filed its first complaint on June 26, 2018 (NYSCEF 8). That same day it sought to enjoin Fiorello from entering into or performing an agreement 4 4 of 21 FILED: NEW YORK COUNTY CLERK 06/05/2020 01:13 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 183 RECEIVED NYSCEF: 06/05/2020 with any other party to sell its license, assets, or stock to any other entity. (NYSCEF 16). 12. The Court denied provisional relief, finding no likelihood of success on the merits. (True and correct copies of the Court’s order and transcript of oral argument denying Cresco’s request for preliminary injunction are attached together hereto as Exhibit 5). 13. On August 10, 2018, Defendants moved to dismiss Cresco’s Complaint. (NYSCEF 38). Cresco requested a lengthy extension of time to respond to Defendants’ motion to dismiss to allow them to retain new counsel, which they did. (NYSCEF 55, 56, 59) 14. Finally, on November 20, 2018, Cresco filed an amended complaint rather than oppose Defendants’ motion to dismiss (NYSCEF 60). The Amended Complaint, set forth claims for (1) breach of the LOI exclusivity provision; (2) breach of contract for the sale of Fiorello’s stock; (3) tortious interference with contract; and (4) unjust enrichment against Yoss and Sirota. 15. On May 24, 2019, the Court dismissed Cresco’s breach of contract claim for the sale of Fiorello’s stock, limited the tortious interference claim to the alleged separate breach of the exclusivity provision, and dismissed the claim against Yoss and Sirota, for unjust enrichment (NYSCEF 119). The Court amended its Decision and Order on October 15, 2019 to, inter alia, confirm that Yoss and Sirota 5 5 of 21 FILED: NEW YORK COUNTY CLERK 06/05/2020 01:13 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 183 RECEIVED NYSCEF: 06/05/2020 were dismissed from the case (NYSCEF 142). (True and correct copies of the Court’s May 24, 2019 decision and order and October 15, 2019 amended decision and order are attached hereto as Exhibits 6 and 7, respectively). Notice of Entry of the Court’s amended decision and order was filed and served on October 18, 2019 (NYSCEF 143). Cresco did not appeal nor seek reargument. 16. On June 6, 2019, Fiorello filed its answer to the amended complaint and asserted counterclaims against Cresco (NYSCEF 125). Fiorello’s counterclaims and affirmative defenses included assertions that Cresco breached the LOI’s confidentiality provisions and failed to perform its obligations under the LOI. 17. Since June of 2019, after Yoss and Sirota were dismissed from this Action, the parties have been actively engaged in discovery. Fiorello has produced approximately 32,000 pages of documents, as well as more than 300 native files (the number of pages of these documents would depend on formatting and printing). Fiorello’s production has included phone records, calendars and text messages. 18. In addition to productions by the parties, Fiorello and Cresco, third parties GTI and Liberty Health Sciences (“Liberty”) have also produced documents. 19. To date, 12 depositions have been taken including of Yoss, Dan Siegel Fiorello’s third Board member, two of Fiorello preferred shareholders, three GTI executives and three Cresco executives and their outside transactional counsel. 6 6 of 21 FILED: NEW YORK COUNTY CLERK 06/05/2020 01:13 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 183 RECEIVED NYSCEF: 06/05/2020 THE PROPOSED AMENDMENT 20. Cresco now asks the Court to for leave to again amend its amended complaint. The proposed SAC attempts to revive its previously dismissed unjust enrichment claim against Sirota and Yoss. It also drops Cresco’s tortious interference claim against John Does 1-10, which had survived in its amended complaint. There is no objection to Cresco withdrawing that claim. 21. The new “factual” allegations included in the proposed amendment fall into three broad categories: (1) details of communications between Fiorello and third parties; (2) benefits to Sirota and Yoss from their sale of Fiorello stock or otherwise related to Fiorello’s merger with GTI; and (3) Cresco’s costs from its purchase of Valley Agriceuticals, an entity unrelated to either Fiorello or GTI. 22. First, as set forth in the accompanying memorandum of law, none of these new allegations cure the fundamental problems with Cresco’s unjust enrichment claim. 23. Second, Cresco has long had the information it relies upon to allege the “benefits” to Yoss and Sirota as well as its own “costs.” The only reason for its delay in pleading those allegations is that it has been dilatory. 24. Specifically, Cresco has long known what Sirota and Yoss’s obtained in exchange for selling their shares to GTI. Cresco received the details of Sirota and Yoss’s shareholdings in Fiorello, including the amount of common and preferred 7 7 of 21 FILED: NEW YORK COUNTY CLERK 06/05/2020 01:13 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 183 RECEIVED NYSCEF: 06/05/2020 shares of all Fiorello stockholders, in the first quarter of 2018, because that information was provided as part of the due diligence materials Fiorello shared with Cresco via a “dropbox” folder. My firm coordinated the collection of the materials shared through this dropbox folder and reproduced them to Cresco in June 2019. Cresco also knew the financial terms of the Fiorello/GTI merger by September 9, 2019 when Fiorello’s amended and restated agreement and plan of merger with GTI was produced to Cresco. Although there were some agreed upon redactions none of the financial terms of the agreement were redacted, including the per-share consideration. 1 25. In addition to alleging that Sirota and Yoss received cash and stock in GTI in exchange for their shares in Fiorello, the proposed SAC includes a number of other alleged “benefits” to Sirota and Yoss. These allegations are both irrelevant and inaccurate, 2 but are not central to the underlying issues in the case and so we have determined not to correct them here. 26. Similarly, Cresco had the terms of its own deal with Valley 1 A fully unredacted copy of Fiorello’s amended and restated merger agreement with GTI was produced to Cresco on November 11, 2019. 2 For example, Sirota and Yoss did not receive any “consulting fees” from GTI. GTI did compensate them for the accrual of their past salaries that had been consistently carried on Fiorello’s books and would have been part of any transaction – including the proposed transaction with Cresco. Similarly, that a family member was a salaried employee who maintained her position after the GTI merger agreement has no bearing on the proposed unjust enrichment claim and Cresco cites no caselaw to suggest itcould have relevance. The allegation regarding this family member appears to have been included in the proposed SAC simply to cause consternation. 8 8 of 21 FILED: NEW YORK COUNTY CLERK 06/05/2020 01:13 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 183 RECEIVED NYSCEF: 06/05/2020 Agriceuticals, LLC (and therefore its alleged “costs”) at the very latest by the time the deal was approved by the DOH on August 6, 2019 (See Ex. 3), if not nearly a year earlier when it executed its merger agreement to acquire the company in October 2018 (proposed SAC ¶60). 27. Third, the new allegations are materially misleading. While Cresco’s motion for leave to amend can and should be defeated on the law, some of the new allegations in the proposed second amended complaint were sufficiently misleading that they could not be left in the public record without providing some response. A. Alleged communications between Fiorello and GTI. 28. The proposed SAC contains numerous allegations of contacts between GTI and Sirota and Yoss during the LOI period. The timing of contacts between the entities is available from email, phone logs and text messages and is not seriously in dispute. Nothing in the LOI required that all contact between Fiorello and any third party cease during the exclusivity period. The LOI does not purport to restrict contacts initiated by third parties nor impose any duty on Fiorello to report such contacts to Cresco. Rather, the LOI merely required Fiorello to abstain from engaging in discussions regarding a possible acquisition of Fiorello by any entity other than Cresco. (Ex. 1). The discovery confirms that while GTI’s CEO, Ben Kovler, reached out to Fiorello during the exclusivity period about a possible transaction with Fiorello, Fiorello was not responsive to GTI’s overtures until after 9 9 of 21 FILED: NEW YORK COUNTY CLERK 06/05/2020 01:13 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 183 RECEIVED NYSCEF: 06/05/2020 the expiration of the LOI. 29. For example, during depositions conducted by Cresco’s counsel, GTI witnesses expressed frustration that Yoss and Sirota were not responsive to GTI’s unsolicited attempts to discuss a possible transaction between GTI and Fiorello during the exclusivity period. 30. An excerpt from the deposition transcript of GTI’s CEO, Ben Kovler, is illustrative: Q. Do you see here, fourth text down, 3-22-18, looks like 2:38 p.m., he says, ‘Hi Ben, we received the LOI, but we are not in a position to discuss until at least March 30.’ What was your reaction to him sending you that text message? A. Frustrated. Unclear what was actually going on. Q. And why were you frustrated? A. Well, I sent him an email he didn't respond to. Then he responds with no response. And then another day goes by, and I said, ‘Should we expect a response?’ And it looks like five hours go by. This was the modus operandi with Eric [Sirota] was talking to a wall without actually getting any answers. … I think I spoke to him [Sirota] live, and he was unresponsive or would answer a different question when asking about this. Kovler Tr. 71:16-72:6; 74:10-12 31. Anthony Georgiadis, GTI’s CFO, also testified about Sirota and Yoss’s lack of responsiveness to GTI’s overtures during the exclusivity period. 10 10 of 21 FILED: NEW YORK COUNTY CLERK 06/05/2020 01:13 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 183 RECEIVED NYSCEF: 06/05/2020 Q. What was your reaction when you learned that Eric [Sirota] had communicated that they received the LOI but are not in position to discuss it until at least March 30th? A. He actually responded. Q. Eric actually responded? A. Yes. Q. Can you explain that? A. I recall Ben was trying to get in touch with Eric and Susan, and they would not respond…. So my immediate reaction was he actually responded. Georgiadis Tr. 125:13-126:1 32. Mr. Georgiadis’s testimony also reflects Sirota’s and Yoss’s hesitance to jump into detailed negotiations with GTI when they met on April 1, 2018 after expiration of the LOI’s exclusivity period. 33. For example, Georgiadis testified: [I]t didn’t feel like even after Ben and Jen flew up there on Easter Sunday that this was going to result in anything fruitful. Georgiadis Tr. 140:8-11. 34. Yoss, Fiorello’s independent director, Daniel Siegel, and the manager of its controlling preferred shareholder, Andrew Stone, all also testified that during the exclusivity period Fiorello did not discuss any potential acquisition or merger transaction with any entity other than Cresco. 11 11 of 21 FILED: NEW YORK COUNTY CLERK 06/05/2020 01:13 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 183 RECEIVED NYSCEF: 06/05/2020 35. Yoss testified: Once we signed the letter of intent, we did not, during the period of the letter of intent, speak to any other party. …We didn’t discuss another transaction. Our transaction that we had agreed to was to try to get the Cresco transaction closed. … we didn’t negotiate. We didn’t discuss another transaction as an alternative at all. We were focused on the Cresco deal. Yoss Tr. 30:13-31:17 36. Siegel testified: Q. And what was said about exclusivity with Cresco in that discussion? A. That we wanted to bring this to closure and that we shouldn't be having any conversation with anyone else. … My understanding was we weren't to discuss this with other shareholders, family members, really with anyone else. The only people we were talking to were Cresco. … Q. And when you say, “discuss this,” are you referring to the Cresco LOI? A. My understanding was I wasn't supposed to, you know, talk to anyone else about potential sale of the company. This was all being done quietly. Siegel Tr. 86:2-87:3 My understanding was that we were not supposed to negotiate. We were just in these you know -- you know, basically, I'm blanking on the word for this, you know, just one-on-one Cresco and Fiorello and no one else could come into the equation. Siegel Tr. 88:5-10 12 12 of 21 FILED: NEW YORK COUNTY CLERK 06/05/2020 01:13 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 183 RECEIVED NYSCEF: 06/05/2020 I remember at one point Eric noted he had unsolicited offer that he had received and we all – Eric, Susan and I agreed to not respond until, you know, the end of the period, if we hadn’t consummated the agreement [with Cresco]. Siegel Tr. 126:3-7 Q. Did you have any say in whether Fiorello responded to it [the unsolicited offer]? A. there was really nothing to discuss. We were in an exclusive period. We were law-abiding citizens, so it was just a matter we all knew we weren’t’ talking to anyone else so… I mean, there was an obvious decision because you’re in exclusive agreement not to communicate, not to negotiate with others.” Siegel Tr. 126:23-127:11 [S]ome approach had come in [during the Cresco exclusivity period] and we were going to do nothing while we were in the exclusive period [with Cresco]. Siegel Tr. 129:22-24 37. Stone testified: A. I asked her [Yoss] under the letter [Cresco LOI], which I had not seen, is there a way she can negotiate with other companies or would that be a violation of her arrangement with Cresco…. She said she is exclusive to Cresco and cannot have engagement with other companies. Q. And how many times did you have that conversation with her? A. More than one. I asked her if she can consult with her lawyer and see if there were ways of having conversations with other investors and she said, no. Stone Tr. 57:21-58:10. 13 13 of 21 FILED: NEW YORK COUNTY CLERK 06/05/2020 01:13 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 183 RECEIVED NYSCEF: 06/05/2020 Q. …[D]id you have an understanding as to what Susan Yoss was going to do about that in light of the exclusivity provision in the letter of intent with Cresco? A. Yes…. That she was going to attempt to get the deal done with Cresco. And if it couldn't be done, then she was pleased to know that there are other interested parties. Stone Tr. 62:13-22. Q. And did you ever have any conversations with Susan Yoss about whether it would be to Fiorello's advantage if the expiration date came and went without Fiorello having entered into a definitive agreement with Cresco? A. I broached the topic with her…. I said, if the deal passes the expiration date and we can talk to other potential investors, is that advantageous? And she said, my lawyers have advised me that's not something that we will do. We will work on our best effort to close the deal with Cresco and we'll cross that bridge if and when it comes to the time. Stone Tr. 76:19-77:11 38. True and correct excerpts from the depositions of Ben Kovler, Anthony Georgiadis, Susan Yoss, Daniel Siegel, Andrew Stone, and Charles Bachtell taken in this Action are attached as Exhibits 8 through 13, respectively. B. Alleged communications between Fiorello and Liberty. 39. Cresco’s allegations and omissions regarding the communications between Liberty and Sirota and Yoss are particularly troubling. The Proposed Amendment precisely excises slivers of communications from their context to create an entirely misleading impression. While Cresco disingenuously manipulates the record to create the appearance of negotiations between Fiorello and Liberty during 14 14 of 21 FILED: NEW YORK COUNTY CLERK 06/05/2020 01:13 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 183 RECEIVED NYSCEF: 06/05/2020 the LOI period, Cresco entirely omits the fact that it was actively negotiating its own possible business combination with Liberty at the same time. 40. Cresco’s CEO, Charles Bachtell, has admitted that Cresco, was negotiating with Liberty and disclosed confidential information during the Exclusivity Period. Liberty then made unsolicited offers to Fiorello which Fiorello never pursued. 41. The Proposed Amendment alleges that on the same day that the LOI was executed, Fiorello “began discussing the sale of a majority equity stake in Fiorello with companies other than Cresco.” To support this allegation, Cresco points to a February 15, 2018 call between Fiorello’s Co-CEO’s and the CEO of Liberty that took place within hours of Fiorello’s execution of the LOI. (Proposed SAC ¶28.) What Cresco omits from this timeline is the fact that Liberty’s CEO initiated contact with Fiorello after over a month of no communication between Liberty and Fiorello and that between the time that Fiorello executed the LOI and the time that Liberty reached out to Fiorello, Liberty’s CEO and CFO had a conference call with Cresco’s CEO, Charles Bachtell. 42. This is the timeline that has been recreated through the documentary evidence and that is fully supported by the discovery record. 15 15 of 21 FILED: NEW YORK COUNTY CLERK 06/05/2020 01:13 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 183 RECEIVED NYSCEF: 06/05/2020 Feb. 15, 2018 Sirota countersigns the LOI on behalf of Fiorello. 4:00 PM ET Cresco’s CEO Charles Bachtell, CFO Ken Amann and Rene Gulliver and George Scorsis of Liberty participate in a conference call. (Exhibit 14 is a true and correct copy of a calendar invite for the February 15, 2018 conference call among three Cresco and two Liberty executives regarding “Cresco Labs Valuation Analysis”). At the time, Cresco and Liberty were exploring a possible business combination. Ex. 13, Bachtell Tr. 254:3-7. Days before the call right after Cresco executed the penultimate version of the LOI with Fiorello, Bachtell, emailed Liberty to tell them that “we’ve got a few good updates to share.” (Exhibit 15 is a true and correct copy of an email chain dated between January 15 and February 13, 2018 among Cresco and Liberty personnel.) 5:07 PM George Scorsis of Liberty sends an email to Sirota and Yoss after over a month of no contact; Mr. Scorsis calls Sirota later that day. (Exhibit 16 is a true and correct copy of an email chain dated between January 18 and February 15, 2018 between George Scorsis of Liberty and Sirota. The chain reflects a break in the emails between January 20, 2018 and February 15, 2018 at 5:07 PM when Mr. Scorsis reinitiates communication asking: “Do you have a moment to connect?”) 5:11 PM Concerned about the extreme coincidence in the timing between the execution of the LOI – which was supposed to be confidential – and the renewed contact from LHS, Sirota and Yoss respond to Scorsis’s email and to Scorsis’ call later that day to try to find out what triggered Liberty’s renewed attention to Fiorello. (Id.) 43. Rather than suggest a breach of the exclusivity provision by Fiorello, the evidence strongly suggests that it was Cresco’s discussion with Liberty at 4 PM that lead to Liberty’s renewed interest in Fiorello. 16 16 of 21 FILED: NEW YORK COUNTY CLERK 06/05/2020 01:13 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 183 RECEIVED NYSCEF: 06/05/2020 44. Similarly, the proposed amendment alleges that on March 2, 2018, Liberty texted Sirota: “[w]e are sending you an unsolicited int hr[sic] next 24 hours.” And further alleges that on March 3, 2018 Liberty did send a letter of intent to purchase Fiorello for a higher purchase price and a higher upfront payment than in the Cresco LOI. (Proposed SAC ¶31). What the proposed amendment omits, however, is that on March 1, 2018, Cresco sent Liberty a version of its investment deck (the “2-15-2018 Cresco Deck”), which provided Liberty with the exact amount of the “upfront capital required to purchase the [New York medical marijuana license]” and information from which the price (or approximate price) and timing of the remaining payments under the LOI would be due for the proposed transaction between Cresco and Fiorello’s shareholders. (Attached together as Exhibit 17 are true and correct copies of that March 1, 2018 and excerpts from its attachment titled “2-15-2018 Cresco Deck”; see Page 9 “Growth Objectives,” bullet 5, “Finalize acquisition of existing license in New York to open cultivation and processing operations and four dispensary locations (one of only four allowed in Manhattan)”; page 57 “Investment Details New York”; first two sentences “Cresco Labs has executed a binding LOI to acquire a hundred percent of a vertically integrated license in New York, which includes cultivation, processing and up to four dispensary locations.” “Our partner did not win one of the initial five licenses awarded by New York state”; the following paragraph provides the amount of the initial capital 17 17 of 21 FILED: NEW YORK COUNTY CLERK 06/05/2020 01:13 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 183 RECEIVED NYSCEF: 06/05/2020 required to “acquire the license” and the following page 58 provides additional details on “capital expenditures” in the next two years that closely coincide with the LOI amounts.) 45. Cresco’s CEO admitted at his deposition that the