Preview
FILED: NEW YORK COUNTY CLERK 12/14/2021 11:15 PM INDEX NO. 652343/2018
NYSCEF DOC. NO. 236 RECEIVED NYSCEF: 12/14/2021
Exhibit G
Excerpts from the Deposition of John Figone, Taken January 17, 2020
Index No. 652343/2018 Motion Seq. No. __
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·1
·2· · · SUPREME COURT OF THE STATE OF NEW YORK
·3· · · · · · · · COUNTY OF NEW YORK
·4· ·--------------------------------X
· · ·CRESCO LABS, NEW YORK, LLC, a
·5· ·New York limited liability
· · ·company, and CRESCO LABS LLC,
·6· ·an Illinois limited liability
· · ·company,
·7
· · · · · · · · · · · Plaintiffs,
·8· · · · · · · · · · · · · · · · · · · Index No.
· · · · · · · · ·VS.· · · · · · · · · · 652343/2018
·9
· · ·FIORELLO PHARMACEUTICALS, INC.,
10· ·a New York corporation, ERIC
· · ·SIROTA, an individual, SUSAN
11· ·YOSS, an individual, and JOHN
· · ·DOES 1-10,
12
· · · · · · · · · · · Defendants.
13· ·--------------------------------X
14
15
16· · · · · · · · · · DEPOSITION
17· · · · · · · · · · · · OF
18· · · · · · · · · ·JOHN FIGONE
19· · · · · · ·Friday, January 17, 2020
20· · · · · · · · ·200 Park Avenue
21· · · · · · · · New York, New York
22
23
24· ·Reported by:
· · ·AYLETTE GONZALEZ, RPR, CLR, CCR
25· ·JOB NO. 174111
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·1· · · · · · · ·JOHN FIGONE (1/17/20)
·2· · · · ·Q.· ·And your home address?
·3· · · · ·A.· ·REDACTED
REDACTED
·4· ·REDACTED California .
·5· · · · ·Q.· ·Do you have a card for me?· I will
·6· ·give you mine.
·7· · · · ·A.· ·Yes, of course.· Thank you,
·8· ·Counsel.
·9· · · · ·Q.· ·What a deal.
10· · · · · · · (Whereupon, an off-the-record
11· · · · ·discussion was held.)
12· · BY MR. LEFTON:
13· · · · ·Q.· ·Were you aware that there was an
14· ·Equity Letter of Intent with a company called
15· ·Fiorello Pharmaceuticals?
16· · · · ·A.· ·Yes.
17· · · · ·Q.· ·And when did you become aware of
18· ·that?
19· · · · ·A.· ·In the first part of 2018,
20· ·February, March.
21· · · · ·Q.· ·Did you participate in negotiating
22· ·the Letter of Intent?
23· · · · · · · MR. HIPP:· Objection; vague as to
24· · · · ·"participate."
25· · · · ·Q.· ·You may answer.
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·1· · · · · · · ·JOHN FIGONE (1/17/20)
·2· · · · ·A.· ·The business terms were essentially
·3· ·negotiated among Charlie, Eric and Susan. I
·4· ·was more or less the scrivener, scribe.
·5· · · · ·Q.· ·And is that true of the -- in terms
·6· ·of the consulting agreement as well?· The
·7· ·memorandum terms for the consulting agreement?
·8· · · · ·A.· ·Yes, I believe the terms were
·9· ·negotiated amongst principals.· And I more or
10· ·less memorialized what they had agreed to.
11· · · · ·Q.· ·Okay.· And you -- but you were
12· ·familiar with the terms of the LOI in February
13· ·of 2018?
14· · · · ·A.· ·If you're asking me if I'm familiar
15· ·with the terms as I sit here now and then --
16· · · · ·Q.· ·No.· I'm asking if you were
17· ·familiar then?
18· · · · ·A.· ·Yes.
19· · · · ·Q.· ·At the time that the Letter of
20· ·Intent -- the Letter of Intent was finally
21· ·executed on or about February 14, 2018, did it
22· ·need to be approved by anyone at Cresco?
23· · · · · · · MR. HIPP:· Objection; assumes
24· · · · ·facts not in evidence.
25· · · · ·A.· ·I don't know.
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·1· · · · · · · ·JOHN FIGONE (1/17/20)
·2· · · · · · · MR. HIPP:· Thank you.
·3· · · · · · · MR. LEFTON:· Thank you for
·4· · · · ·pointing that out.
·5· · · · · · · MR. HIPP:· Sure.
·6· · · · ·Q.· ·So you testified earlier,
·7· ·Mr. Figone, that you acted primarily as the
·8· ·scrivener in connection with the Letter of
·9· ·Intent?
10· · · · ·A.· ·Yes.
11· · · · ·Q.· ·Let me show you an e-mail exchange.
12· ·And on the back page, on the bottom, there
13· ·seems to be an e-mail involving you.· And I'll
14· ·ask you -- let's mark it as Exhibit 4.· Let's
15· ·see if you can tell me what it is.
16· · · · · · · (Figone Exhibit 4, E-mail dated
17· · · · ·2/12/2018 Bates stamped CRES00001057
18· · · · ·through CRES00001058 was marked for
19· · · · ·identification, as of this date.)
20· · BY MR. LEFTON:
21· · · · ·Q.· ·You recognize the document, sir?
22· · · · ·A.· ·You mean the DocuSign?· I --
23· · · · ·Q.· ·Look at the back page.
24· · · · ·A.· ·Ah, okay.
25· · · · · · · Okay.· And your question again,
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·1· · · · · · · ·JOHN FIGONE (1/17/20)
·2· · · · ·Q.· ·Did you also act as a
·3· ·businessperson in connection with the Fiorello
·4· ·Letter of Intent?
·5· · · · · · · MR. HIPP:· Objection; calls for a
·6· · · · ·legal conclusion.
·7· · · · ·Q.· ·You can answer that.
·8· · · · ·A.· ·As I said before, I was not
·9· ·involved in any of the negotiation of the
10· ·business points of the Fiorello structure.
11· · · · ·Q.· ·Did you -- did you ever begin to
12· ·negotiate, just from a drafting perspective,
13· ·did you ever begin to draft a Management
14· ·Oversight Agreement?
15· · · · ·A.· ·Again, all of the business points
16· ·were predetermined and I merely scrivenered
17· ·the documents.
18· · · · ·Q.· ·Did some of that scrivening
19· ·responsibility include a Management Oversight
20· ·Agreement?
21· · · · ·A.· ·Management oversight was part of
22· ·the arrangement.
23· · · · ·Q.· ·Did you draft anything that might
24· ·be used as -- other than what's included
25· ·here --
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·1· · · · · · · ·JOHN FIGONE (1/17/20)
·2· · · · ·A.· ·Right.· Not directly, though it
·3· ·does have a carveout for professional advisors
·4· ·and appraisers, as long as they maintain the
·5· ·confidentiality.
·6· · · · ·Q.· ·Yes.· I'm not asking about advisors
·7· ·or appraisers.· I'm asking specifically about
·8· ·investors.
·9· · · · ·A.· ·I wouldn't know --
10· · · · · · · MR. HIPP:· Same objection, calls
11· · · · ·for a legal conclusion.
12· · · · ·A.· ·It appears, no, that it does not.
13· · · · ·Q.· ·Okay.· And there's also a section
14· ·on "Contingent Payment," right?· Or is that in
15· ·6?
16· · · · ·A.· ·Thank you.· Ah, I see it.
17· · · · ·Q.· ·Now, do you recall, sir, that
18· ·Cresco ultimately acquired Valley
19· ·Pharmaceuticals from Gloucester?
20· · · · · · · MR. HIPP:· Objection; misleading.
21· · · · ·A.· ·Your question?
22· · · · ·Q.· ·I may not have the names right.
23· ·Did Valley -- excuse me.
24· · · · · · · Did Cresco acquire an ownership
25· ·interest in another New York licensee?
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·1· · · · · · · ·JOHN FIGONE (1/17/20)
·2· · · · ·A.· ·Yes.
·3· · · · ·Q.· ·And who was that?
·4· · · · ·A.· ·Valley Agriceutical.
·5· · · · ·Q.· ·Agriceutical?
·6· · · · ·A.· ·Yes.
·7· · · · ·Q.· ·And that acquisition was made from
·8· ·an entity called Gloucester?
·9· · · · · · · MR. HIPP:· Objection; vague.
10· · · · ·A.· ·I think the holding structure was
11· ·-- had a Gloucester in its name.· I only knew
12· ·of Valley Agriceutical.
13· · · · ·Q.· ·So when that transaction was first
14· ·negotiated and signed, was it anticipated that
15· ·there be a contingent payment in the event of
16· ·adult legalization?
17· · · · · · · MR. HIPP:· Objection only to the
18· · · · ·extent that it requires disclosing
19· · · · ·privileged information.
20· · · · ·A.· ·I don't recollect.
21· · · · ·Q.· ·Did you ever learn that the New
22· ·York State Department of Health would refuse
23· ·to approve the transaction to acquire a
24· ·licensee's interest -- withdrawn.
25· · · · · · · Did you ever learn that the New
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·1· · · · · · · ·JOHN FIGONE (1/17/20)
·2· ·York State Department of Health would refuse
·3· ·to approve a transfer of ownership of a
·4· ·license which included a contingent payment on
·5· ·adult legalization as one of the terms of
·6· ·consideration?
·7· · · · ·A.· ·I did not, no.
·8· · · · ·Q.· ·You need to take a break?
·9· · · · ·A.· ·No, just a few seconds.
10· · · · · · · Please resume.
11· · · · ·Q.· ·Did you have discussions with
12· ·either Sirota or Yoss regarding the reduction
13· ·in consulting compensation?
14· · · · ·A.· ·I did not.
15· · · · · · · MR. HIPP:· Objection to the
16· · · · ·question, assumes facts not in
17· · · · ·evidence.
18· · · · ·Q.· ·I'm going to hand you Exhibit 8.
19· · · · · · · MR. HIPP:· Is there a 7?
20· · · · ·Q.· ·This is 7.· I'm going to hand you
21· ·Exhibit 7.
22· · · · · · · (Figone Exhibit 7, Escrow
23· · · · ·Agreement, Bates stamped D012914
24· · · · ·through DC12921 was marked for
25· · · · ·identification, as of this date.)
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·1· · · · · · · ·JOHN FIGONE (1/17/20)
·2· · · · ·A.· ·She's an attorney with Much
·3· ·Shelist.
·4· · · · ·Q.· ·And did she take the lead in
·5· ·negotiating the definitive agreement on behalf
·6· ·of Cresco?
·7· · · · ·A.· ·Yes.
·8· · · · · · · MR. HIPP:· Objection to the
·9· · · · ·question vague as to "lead."
10· · · · ·A.· ·Yes.
11· · · · ·Q.· ·And you said that Mr. Bachtell
12· ·decided to hire that firm, right?
13· · · · ·A.· ·Yes.
14· · · · ·Q.· ·Had you recommended any other firm?
15· ·You may answer.
16· · · · ·A.· ·I don't remember if I had made a
17· ·recommendation.
18· · · · ·Q.· ·Did you at that time do acquisition
19· ·agreements yourself?
20· · · · ·A.· ·I did.· I do.
21· · · · ·Q.· ·Was there a reason that you did not
22· ·do this one?
23· · · · · · · MR. HIPP:· Objection to the extent
24· · · · ·that requires disclosing
25· · · · ·attorney-client privileged
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·1· · · · · · · ·JOHN FIGONE (1/17/20)
·2· · · · ·information.
·3· · · · ·A.· ·I have to agree with my counsel on
·4· ·that.· It was a discussion between Charlie and
·5· ·myself.
·6· · · · ·Q.· ·And it was Charlie's decision then
·7· ·to use an outside firm?
·8· · · · · · · MR. HIPP:· Objection, same
·9· · · · ·objection.
10· · · · ·Q.· ·Is that correct?
11· · · · · · · MR. HIPP:· Same objection. I
12· · · · ·instruct you not to answer.
13· · · · ·Q.· ·Without telling me the contents of
14· ·that discussion, when did it occur?
15· · · · ·A.· ·I would say mid to late February.
16· · · · ·Q.· ·After the execution of the Letter
17· ·of Intent?
18· · · · ·A.· ·Yes.
19· · · · ·Q.· ·Had you done any work to prepare a
20· ·draft Purchase Agreement?
21· · · · ·A.· ·I'm sorry.
22· · · · ·Q.· ·Had you personally done any work to
23· ·prepare a draft Purchase Agreement?
24· · · · ·A.· ·My normal preparation, sure.
25· · · · ·Q.· ·And what is that?
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·1· · · · · · · ·JOHN FIGONE (1/17/20)
·2· · · · ·A.· ·Start assembling -- taking the
·3· ·boilerplate language and starting to develop
·4· ·it so it would be useful.
·5· · · · ·Q.· ·And did you send that to Much
·6· ·Shelist?
·7· · · · ·A.· ·I believe I did, yes.
·8· · · · ·Q.· ·They were not retained until
·9· ·February 21st.· Do you recall that?
10· · · · ·A.· ·I specifically do not, but I have
11· ·no reason to doubt you, sir.
12· · · · ·Q.· ·Do you recall that on March 1st you
13· ·introduced Catherine Lewis to Scott Linsky?
14· · · · ·A.· ·I don't specifically, but about --
15· ·I feel I'm about to be refreshed.
16· · · · ·Q.· ·Who was Scott Linsky?
17· · · · ·A.· ·I believe Mr. Linsky is an attorney
18· ·for the Lucosky firm.
19· · · · ·Q.· ·Do you know why it took them until
20· ·March 1 to advise Mr. Linsky as to who the
21· ·lawyer would be for Cresco?
22· · · · · · · MR. HIPP:· Objection to the extent
23· · · · ·it requires disclosing attorney-client
24· · · · ·privileged communication.
25· · · · ·A.· ·And your question again, sir?
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·1· · · · · · · ·JOHN FIGONE (1/17/20)
·2· · · · ·Q.· ·Why it took them to March 1 to put
·3· ·Ms. Lewis and Mr. Linsky together?
·4· · · · ·A.· ·I don't.
·5· · · · · · · MR. HIPP:· Objection to the
·6· · · · ·question, assumes facts not in
·7· · · · ·evidence.
·8· · · · ·Q.· ·Did you introduce Mr. Linsky to
·9· ·Ms. Lewis before February -- March 1?
10· · · · ·A.· ·I may have.· I don't recollect.
11· · · · ·Q.· ·You don't recall?
12· · · · ·A.· ·It may have been through a
13· ·telephone introduction.· I can't recall.
14· · · · ·Q.· ·Let's mark this as the next
15· ·exhibit.· Why the photocopy vendor puts these
16· ·pages in...
17· · · · ·A.· ·We're on the record, so I'm going
18· ·to keep my opinion to myself.
19· · · · · · · (Figone Exhibit 8, E-mail with
20· · · · ·attachment dated 3/1/2018, Bates
21· · · · ·stamped MS_000082 through MS_000142
22· · · · ·was marked for identification, as of
23· · · · ·this date.)
24· · · · · · · MR. LEFTON:· I'll let you separate
25· · · · ·it for yourselves.
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·1· · · · · · · ·JOHN FIGONE (1/17/20)
·2· · · · · · · MR. HIPP:· You're marking three
·3· · · · ·documents as --
·4· · · · · · · MR. LEFTON:· Yes.
·5· · · · · · · MR. HIPP:· -- one exhibit?
·6· · · · · · · MR. LEFTON:· Yes.· Figone 8.
·7· · · · ·Q.· ·Sir, I've handed you an e-mail
·8· ·Bates stamped MS '0082.· And the attachments
·9· ·referred to in that e-mail address Stock
10· ·Purchase Agreement dated February 28, MS '84
11· ·through '132.· And a due diligence request
12· ·list, MS '133 through '142.
13· · · · · · · You see them, sir?
14· · · · ·A.· ·I do.
15· · · · ·Q.· ·Okay.· So beginning with the bottom
16· ·e-mail from you to Mr. Linsky, with a copy to
17· ·Ms. Lewis.· Not to get mud on the documents.
18· · · · · · · Does this refresh your recollection
19· ·that it was on March 1 that you introduced
20· ·Ms. Lewis to Mr. Linsky?
21· · · · ·A.· ·It would appear that way, yes.
22· · · · ·Q.· ·And you don't recall the specific
23· ·telephone conversation?
24· · · · ·A.· ·I don't.
25· · · · ·Q.· ·Okay.· And you see that also on
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·1· · · · · · · ·JOHN FIGONE (1/17/20)
·2· ·March 1 Ms. Lewis reaches out to him?
·3· · · · ·A.· ·"Attached for your review is the
·4· ·initial draft of the Stock Purchase Agreement
·5· ·and due diligence request," yes I see that.
·6· · · · ·Q.· ·Now, between February 14, the date
·7· ·of the LOI, and March 1, had you had any
·8· ·discussions with Mr. Linsky or his colleague,
·9· ·Mr. Lucosky, of specific terms of the SPA?
10· · · · ·A.· ·I don't recall.
11· · · · ·Q.· ·You understood that it was the
12· ·buyer's responsibility to prepare the initial
13· ·draft of the SPA?
14· · · · ·A.· ·Yes.
15· · · · ·Q.· ·And if you look at the next
16· ·document -- so can you tell me what transpired
17· ·between February 14 and March 1 on your end
18· ·regarding this transaction?
19· · · · · · · MR. HIPP:· Objection to the extent
20· · · · ·it requires disclosing attorney-client
21· · · · ·privileged communications.
22· · · · ·A.· ·I can't recall whether Scott and
23· ·myself were honing the terms agreed into the
24· ·LOI into some kind of form or not.
25· · · · ·Q.· ·You don't recall if you even had a
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·1· · · · · · · ·JOHN FIGONE (1/17/20)
·2· ·conversation with him, right?
·3· · · · ·A.· ·I don't recall if I even had a
·4· ·conversation with him, yes.
·5· · · · ·Q.· ·Did you have an e-mail exchange
·6· ·with him or a written exchange with him?
·7· · · · ·A.· ·I don't recall.
·8· · · · ·Q.· ·Did you -- in connection with this
·9· ·lawsuit, did you collect documents from your
10· ·files for production?
11· · · · ·A.· ·In connection with this lawsuit? I
12· ·maintained -- I maintain all of my files. I
13· ·don't delete anything.
14· · · · ·Q.· ·And did you produce your files to
15· ·counsel for review and production?
16· · · · ·A.· ·Of course, yes.
17· · · · ·Q.· ·If you had written communications
18· ·with Mr. Linsky, they would have been
19· ·reflected in those files?
20· · · · ·A.· ·They should, yes.
21· · · · ·Q.· ·And you don't know whether you did
22· ·or did not?
23· · · · ·A.· ·I can't remember.· It's over two
24· ·years ago.
25· · · · ·Q.· ·Okay.· So if you look at the draft
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·1· · · · · · · ·JOHN FIGONE (1/17/20)
·2· ·Stock Purchase Agreement, is this a document
·3· ·that you had drafted?
·4· · · · ·A.· ·This looks like it was drafted by
·5· ·Ms. Lewis.
·6· · · · ·Q.· ·Does it reflect your boilerplate
·7· ·terms and template that you sent to her?
·8· · · · · · · MR. HIPP:· Objection; calls for
·9· · · · ·privileged information.
10· · · · · · · MR. LEFTON:· I don't think it
11· · · · ·does.
12· · · · · · · MR. HIPP:· Reiterate the objection
13· · · · ·and instruct you not to answer.
14· · · · ·Q.· ·Is any part of this document what
15· ·you prepared, the substance?
16· · · · ·A.· ·There are certain, certainly,
17· ·commodities, but this is Ms. Lewis' document.
18· · · · ·Q.· ·Okay.· Did you review it before it
19· ·was sent?
20· · · · ·A.· ·I would presume so, but I don't
21· ·specifically recollect.
22· · · · ·Q.· ·Would anyone else at Cresco have
23· ·reviewed it before it was sent?
24· · · · ·A.· ·Again, I would presume so, but I
25· ·don't specifically recollect.