Preview
FILED: NEW YORK COUNTY CLERK 01/15/2021 10:46 PM INDEX NO. 657193/2020
NYSCEF DOC. NO. 21 RECEIVED NYSCEF: 01/15/2021
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
YASEMIN TEKINER,
in her individual capacity, as a beneficiary
and a Trustee of The Yasemin Tekiner
Index No.: 657193/2020
2011 Descendants Trust and derivatively as
a holder of equitable interests in a
shareholder or a member of the Company Motion Sequence #1
Defendants,
Plaintiff,
-against-
BREMEN HOUSE INC., BREMEN HOUSE
TEXAS, INC., GERMAN NEWS COMPANY,
INC., GERMAN NEWS TEXAS, INC., 254-258
W. 35TH ST. LLC, BERRIN TEKINER, GONCA
TEKINER, and BILLUR AKIPEK, in her capacity
as a Trustee of The Yasemin Tekiner 2011
Descendants Trust,
Defendants.
MEMORANDUM OF LAW IN OPPOSITION TO
PLAINTIFF’S MOTION FOR A PRELIMINARY INJUNCTION
Judith A. Archer
David B. Schwartz
Sean M. Topping
NORTON ROSE FULBRIGHT US LLP
1301 Avenue of the Americas
New York, NY 10019-6022
+1 212 318-3000
Attorneys for Defendants
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TABLE OF CONTENTS
Page
PRELIMINARY STATEMENT ............................................................................................. 1
STATEMENT OF FACTS ..................................................................................................... 2
I. Parties ............................................................................................................. 2
II. Companies Flourish Under Defendants’ Stewardship For More Than 30
Years............................................................................................................... 3
III. All Parties, Including Plaintiff, Have Reaped the Benefits of the
Companies’ Success......................................................................................... 4
IV. Companies Sell Unprofitable Properties............................................................ 6
V. Plaintiff’s Disruptive Behavior Threatens the Stability of the Companies,
Despite Defendants’ Efforts to Accommodate Her ............................................ 7
VI. The Court Denies Plaintiff’s Request for TRO .................................................. 9
LEGAL STANDARD ...........................................................................................................10
ARGUMENT ........................................................................................................................11
I. PLAINTIFF SATISFIES NONE OF THE REQUIREMENTS FOR A
PRELIMINARY INJUNCTION......................................................................11
A. Plaintiff Suffers No Irreparable Harm ...................................................11
B. Plaintiff’s Claims Are Likely to Fail .....................................................13
1. Berrin and Gonca Have Not Self-Dealt, While Plaintiff
Makes Such Claims With Unclean Hands..................................13
2. Plaintiff Provides No Evidence of Corporate
Mismanagement .......................................................................15
3. Defendants Have Not Breached Duties of Candor ......................17
C. The Balance of the Equities Weighs Against Granting a
Preliminary Injunction .........................................................................19
II. PLAINTIFF SEEKS RELIEF THAT SHOULD NOT BE GRANTED
THROUGH PRELIMINARY INJUNCTION...................................................20
A. Defendant’s Vague Claims of Possible “Retaliation” is a Smoke
Screen For Permissive Corporate Action...............................................20
B. The BCL and the Companies’ By-Laws Permits Use of Corporate
Assets to Pay Legal Fees ......................................................................22
CONCLUSION ......................................................................................................................23
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TABLE OF AUTHORITIES
Page(s)
Cases
1234 Broadway LLC v. West Side SRO Law Project,
86 A.D.3d 18 (1st Dep’t 2011) .......................................................................................... 10
40 W. 67th St. Corp. v. Pullman,
100 N.Y.2d 147 (2003) ..................................................................................................... 13
Ajettix Inc. v. Raub,
9 Misc.3d 908 (Sup. Ct. Monroe Cty. 2005)....................................................................... 18
American Commerce Ins. Co. v Francois,
125 A.D.3d 903 (2d Dep’t 2016) ....................................................................................... 11
Bansbach v. Zinn,
1 N.Y.3d 1 (2003) ............................................................................................................. 22
Birnbaum v. Birnbaum,
73 N.Y.2d 461 (1989) ....................................................................................................... 14
Blake v. Blake,
225 A.D.2d 337 (1st Dep’t 1996) ...................................................................................... 15
Burry v. Madison Park Owner LLC,
84 A.D.3d 699 (1st Dep’t 2011) ........................................................................................ 13
Chrysler Corp. v. Fedders Corp.,
63 A.D.2d 567 (1st Dep’t 1978) ........................................................................................ 19
Cohen v. Cocoline Prod.,
309 N.Y. 119 (1955) ......................................................................................................... 17
Doe v. Axelrod,
73 N.Y.2d 748 (1988) ....................................................................................................... 10
Donovan v. Rothman,
253 A.D.2d 627 (1st Dep’t 1998) ...................................................................................... 22
Dwyer v. DiNardo & Metschl, P.C.,
41 A.D.3d 1177 (4th Dep’t 2007) ...................................................................................... 18
Ed Cia Corp. v. McCormack,
44 A.D.3d 991 (2d Dep’t 2007) ......................................................................................... 11
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Eikenberry v. Lamson,
No. 516653/20, 2020 WL 7041788 (Kings Cty. Sup. Ct., Nov. 30, 2020)...................... 11, 12
Evangelista v. Longo,
13 A.D.2d 835 (2d Dep’t 1961) ......................................................................................... 14
Global Minerals and Metals Corp. v. Holme,
35 A.D.3d 93 (1st Dep’t 2006) .......................................................................................... 13
Gottfried v. Gottfried,
112 N.Y.S.2d 431 (Sup. Ct. N.Y. Cty. 1952)...................................................................... 14
Hammerman v. Bueche-Girod Corp.,
72 A.D.2d 677 (1st Dep’t 1979) ........................................................................................ 18
Happy Kids, Inc. v. Glasgow,
No. 01 Civ. 6434, 2002 WL 72937 (S.D.N.Y. Jan. 17, 2002).............................................. 22
J-K Apparel Sales Co. v. Jacobs,
No. 2017-11423, 2020 WL 7233671 (2d Dep’t Dec. 9, 2020) ............................................. 21
Laker v. Assoc. of Prop. Owners of Sleepy Hollow Lake Inc.,
172 A.D.3d 1660 (3d Dep’t 2019) ..................................................................................... 12
Levine v. Levine,
184 A.D.2d 53 (1st Dep’t 1992) ........................................................................................ 16
M&M Country Store, Inc. v. Kelly,
159 A.D.3d 1102 (3d Dep’t 2018) ..................................................................................... 16
Margolies v. Encounter, Inc.,
42 N.Y.2d 475 (1977) ....................................................................................................... 10
McGlaughlin, Piven, Vogel, Inc. v. W.J. Nolan & Co.,
114 A.D.2d 165 (2d Dep’t 1986) ....................................................................................... 19
Mr. Natural, Inc. v. Unadulterated Food Prods., Inc.,
152 A.D.2d 729 (2d Dep’t 1989) ....................................................................................... 19
Owen v. Hamilton,
44 A.D.3d 452 (1st Dep’t 2007) ........................................................................................ 13
Pilipiak v. Keyes,
286 A.D.2d 231 (1st Dep’t 2001) ................................................................................ 12,
22
Redmond v. Redmond,
42 A.D.2d 542 (1st Dep’t 1973) ........................................................................................ 21
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Rockowitz v. Raab,
132 A.D.2d 916 (3d Dep’t 1987) ....................................................................................... 21
Scotto v. Mei,
219 A.D.2d 181 (1st Dep’t 1996) ...................................................................................... 10
Shapiro v. Rockville Country Club, Inc.,
22 A.D.3d 657 (2d Dep’t 2005) ......................................................................................... 15
Spectrum Stamford, LLC v. 400 Atlantic Title, LLC,
162 A.D.3d 615 (1st Dep’t 2018) ...................................................................................... 19
Steinberg v. Steinberg,
434 N.Y.S.2d 877 (Sup. Ct. N.Y. Cty. 1980)...................................................................... 14
Sterling Fifth Assocs. v. Carpentille Corp.,
5 A.D.3d 328 (1st Dep’t 2004) .......................................................................................... 12
Tatko v. Sheldon Slate Products Co., Inc.,
2 A.D.3d 1030 (3d Dep’t 2003) ......................................................................................... 14
Town of Liberty Volunteer Ambulance Corp. v Catskill Regional Med. Ctr.,
30 A.D.3d 739 (3d Dep’t 2006) ......................................................................................... 11
Valentine v. Schembri,
212 A.D.2d 371 (1st Dep’t 1995) ...................................................................................... 11
Rules and Statutes
BCL § 720(a)(1) ..................................................................................................................... 22
BCL § 720(a)(3) ..................................................................................................................... 22
BCL §§ 721-723..................................................................................................................... 22
BCL § 722(a)-(b).................................................................................................................... 22
BCL §§ 723(c) ....................................................................................................................... 22
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Defendants Bremen House, Inc., Bremen House Texas, Inc., German News Company, Inc.,
German News Texas, Inc., 254-258 W 35th St LLC, Berrin Tekiner, and Gonca Tekiner
(collectively, “Defendants” 1), hereby submit this Memorandum of Law in Opposition to Plaintiff’s
Motion for a Preliminary Injunction with Temporary Restraining Order (the “Motion”).
PRELIMINARY STATEMENT
This is not a case about corporate malfeasance, but rather the act of an angry daughter—
unsatisfied with millions of dollars in benefits she has received from her mother’s generosity—
seeking an early inheritance through threats of sabotage to the companies her family has managed
for over 70 years. Plaintiff is seeking a quick payday by armchair quarterbacking the Companies
while living in Bel Air, California, pursuing her dream of being a screenwriter. Plaintiff’s
incendiary attacks regarding her mother’s and sister’s health demonstrate that she is motivated not
just by greed, but also long-simmering personal animus. Plaintiff’s mean-spirited allegations and
recounting of family disputes are entirely personal, concern matters that have not affected the
Companies’ management, and have no place in the public record.
Plaintiff’s Motion asks the Court to maintain, or reinstate, the benefits she enjoys from the
Companies, including a six-figure salary and rent-free living in a Bel Air mansion, while she
pursues claims against Defendants for similar benefits. Plaintiff’s request fails because (1) she has
not made the required showing to justify a preliminary injunction—especially absent irreparable
harm—and (2) she seeks to enjoin actions that are justified under the Companies’ governing
documents and the Business Corporations Law. Plaintiff’s actions, on the other hand, threaten to
interfere with the Companies’ operations, including the acquisition of replacement properties
1 The Motion does not seek relief from Defendant Billur Akipek.
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allowing the Companies to reap tax benefits from recent property sales. Plaintiff’s Motion should
be denied.
STATEMENT OF FACTS
I. Parties
Bremen House, Inc. (“Bremen House”) and German News Company, Inc. (“German
News,” and collectively the “Companies”) own, manage, and rent, either directly or through
wholly-owned subsidiaries (including Bremen House Texas, Inc. and German News Texas, Inc.),
a portfolio of residential and commercial real estate properties. (Affidavit of Berrin Tekiner, dated
January 14, 2021 (“Berrin Aff.”) ¶2) The Companies are managed by Defendants Berrin Tekiner
(“Berrin”) and Gonca Tekiner (“Gonca”). (Id.)
Berrin is the Chairperson of the Companies, which she has successfully lead for more than
30 years. (Id. ¶¶1,2) Berrin is Plaintiff’s and Gonca’s mother. (Id. ¶¶2-3) Gonca is the
Companies’ President, and a member of their Boards of Directors. (Affidavit of Gonca Tekiner
Hartmann, dated January 14, 2021 (“Gonca Aff.”) ¶1) Gonca worked for the Companies part-time
in the 1990s and full-time since 2005. (Id. ¶2)
Plaintiff was a member of the Board of Directors and Vice President of Bremen House, as
well as Treasurer of German News. (Berrin Aff. ¶3) She currently resides in an approximately
$3.5 million home in Bel Air, California owned by Bremen House. (Id.) Since 2011, Plaintiff has
been the beneficiary of the Yasemin Tekiner 2011 Descendants Trust (the “Yasemin Trust”),
similar to trusts created for her siblings. (Id. ¶4) The Yasemin Trust’s only assets are
approximately one-third of the shares of Bremen House and German News and approximately
one-sixth of the interest in 254-258 W 35th St LLC; its most significant liability are notes valued
at over $10 million, held by Berrin. (Id.) The Yasemin Trust does not require its Trustee make
any distributions to Plaintiff. (Id., Ex. A, Art. 2(B)) Berrin is the sole member of the Protector
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Committee of the Yasemin Trust and can remove any member of the trust committee of the
Yasemin Trust without cause in her discretion. (Id., Ex. A, Art. 6(A)(1)-(3)) Billur Akipek isthe
sole member of the trust committee, while Christiana Trust, a Division of Wilmington Savings
Fund Society, FSB, acts as the Yasemin Trust’s directed trustee. (Id. ¶4) The trust committee
directs the trustee and has no obligation to distribute any funds to Yasemin. (Id.)
II. The Companies Flourish Under Defendants’ Stewardship For More Than 30 Years
Defendants have successfully managed the Companies for over three decades. Sami
Tekiner, Berrin’s husband and Plaintiff and Gonca’s father, acquired several commercial and
residential real estate properties during his lifetime. (Berrin Aff. ¶5) Sadly, in the late 1980s,
Sami began suffering from Alzheimer’s Disease, which affected his ability to manage the
Companies. (Id.) Berrin stepped in to manage the Companies during Sami’s illness, working not
only to save the Companies, but also to care for her ill husband and three young daughters. (Id.)
At that time, Berrin had taken business courses at Marymount Manhattan College for
approximately two years. (Id.)
In 1994, when Sami died, the Companies were valued at approximately $15 million.
(Id. ¶6) Under Berrin’s management, the Companies prospered and expanded their holdings,
including acquiring three Texas shopping centers and incorporating Bremen House Texas in 2007
and German News Texas in 2017. (Id.) By the end of 2019, the Companies collectively held a
portfolio of 22 commercial and residential properties in various states, held assets in excess of $75
million, and were underleveraged with modest debt of less than $20 million. (Id. ¶7) In 2019, the
Companies effectively broke even, with a small net operating loss of approximately $220,000.
(Id.)
The Companies’ staff, along with Berrin and Gonca, manage the properties, lease space to
commercial and residential tenants, coordinate property maintenance, and perform various other
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administrative tasks to ensure that the Companies comply with federal, state, and city regulations.
(Id. ¶8; Gonca Aff. ¶2) Berrin and Gonca have provided stable leadership that has been unaffected
by limited health issues that have, on rare occasions, required hospitalization or treatment. (Berrin
Aff. ¶8; Gonca Aff. ¶5) Berrin, who has a chronic heart condition, has in the past been briefly
hospitalized for treatment. (Berrin Aff. ¶8) Berrin and Gonca have also each briefly stayed at a
private mental health treatment center. (Berrin Aff. ¶8; Gonca Aff. ¶5) At no point has any health
issue of Berrin or Gonca impaired the management or operations of the Companies. (Id.)
While Defendants have diligently managed the Companies, Plaintiff has done virtually
nothing to assist them. (Berrin Aff. ¶13) Plaintiff pursued an undergraduate degree in Psychology,
a graduate degree in Film, and, in or around 2012, moved to Los Angeles to pursue her dream of
being a screenwriter. (Id.) Plaintiff rarely returns to New York, appears in the Companies’ offices,
or attempts to productively assist in managing them. (Id. ¶14; Gonca Aff. ¶3) On multiple
occasions, Plaintiff even thanked Berrin and Gonca for their work at the Companies that allows
Plaintiff to pursue her dreams. (Gonca Aff. ¶3)
III. All Parties, Including Plaintiff, Have Reaped the Benefits of the Companies’ Success
The Companies are closely held corporate entities, and Berrin has sought to generously
provide for all three of her daughters.
The Companies hold title to several residential properties, including those occupied by
Plaintiff, Gonca, their other sister, and Berrin. (Berrin Aff. ¶9) Gonca and Plaintiff live in
comparably-valued homes owned by the Companies. (Id.) The proceeds of the loan used to
purchase the home for Gonca were also used to finance company debt. (Id. ¶11) When the
Defendants have vacated a company-owned property, the Companies have typically either sold or
rented it. (Id. ¶10) After Gonca moved to Bronxville in 2017, the New York apartment in which
she previously resided was rented. (Id.) When the $3.5 million Bel Air home in which Plaintiff
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resides was purchased, the New York apartment (owned by the Companies), in which she resided
before moving to California, was sold. (Id.) The Companies generally pay for upkeep on these
properties. For example, while complaining of such payments for her mother and sister, Plaintiff
sent the Companies a $3,200 landscaping bill on the day she commenced this action. (Id. ¶9,
Ex. B)
The Companies pay Defendants’ salaries and provide certain services, such as a driver for
Berrin, to assist in Defendants’ management of the Companies. (Id. ¶12) Gonca’s employment
contract, salary, and benefits are commensurate with her position as the Companies’ President
overseeing their day-to-day operations. (Id.) Finally, the Companies pay for office and overhead
expenses, including telephone bills necessary to conduct company business and pet food for rescue
cats that reside in the company offices. (Id.)
While Berrin generously ensured that all three of her daughters benefited from the
Companies’ success, she has been especially generous to Plaintiff. Plaintiff previously lived in a
multi-million dollar apartment owned by the Companies. (Id. ¶14) After Plaintiff moved to
California, the Companies, at Berrin’s direction, purchased a multi-million dollar Bel Air home
for her. (Id.) She has lived continuously in Los Angeles since 2012, with the exception of late
2016 to April 2017 when she returned to New York for her fiancée’s work as a successful
television writer and producer. (Id.)
At Berrin’s direction, the Companies have paid Plaintiff annual compensation, which, since
2016, has ranged between $200,000 and $290,000 and rewarded her with a pension valued at over
$660,000. (Id. ¶15) She also lives in a company-owned mansion, for which she pays no out-of-
pocket expenses (the Companies pay rent as a bonus to Plaintiff each year). (Id. ¶14) When
Plaintiff temporarily relocated to New York in 2016-2017, the Companies spent over $70,000 to
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renovate an apartment for her use, and when Plaintiff disliked the apartment, provided her a
$14,000-per-month townhouse until she returned to Bel Air. (Id.) Finally, in 2019, Berrin paid
for Plaintiff and her now fiancée to take extended, luxury vacations to Bora Bora and Turkey and,
in Turkey, arranged an engagement party for them. (Id. ¶16)
IV. The Companies Sell Unprofitable Properties
In recent years, some of the Companies’ New York properties have become unprofitable
due to their advanced age, excessive maintenance costs, and the number of rent-controlled and
rent-stabilized tenants. (Berrin Aff. ¶21) The Companies made the fiscally prudent decision to
sell five unprofitable buildings. (Id.) They listed the buildings for sale and they sat on the market
for the better part of a year despite Defendants’ best efforts to find a suitable buyer. (Id.) While
Defendants received a handful of offers, all were well below what they found to be an acceptable
sales price. (Id.) At the same time, after the COVID-19 pandemic struck, widespread economic
difficulties lead fewer of the Companies’ tenants to pay rent, causing gross rental income to
plummet by more than one-third. (Id.)
Faced with persistent losses and a depressed real estate market, the Defendants made the
calculated business decision to accept Extell Acquisitions LLC’s (“Extell”) offer to purchase five
buildings for $60 million. (Id. ¶22) Plaintiff consented to the sale in writing, telling Berrin that
she was willing to accept an even lower price. (Id. ¶23) Before signing the purchase contract, the
parties decided to split the transaction into two: one for $45 million (for four buildings) and one
for $15 million (for the other building). (Id. ¶24) Immediately prior to signing the contracts on
October 12, 2020, Extell demanded a reduction of purchase price of the first four buildings from
$45 to $35 million. (Id.) With no other serious buyers, the Defendants elected to execute the
contracts at the modified price. (Id.) Defendants and Extell closed on the sale of the four buildings
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for $35 million on December 21, 2020, but Extell defaulted on its purchase of the fifth building.
(Id. ¶25)
V. Plaintiff’s Disruptive Behavior Threatens the Stability of the Companies, Despite
Defendants’ Efforts to Accommodate Her
Despite her limited role with the Companies, Plaintiff has repeatedly sought to disrupt their
management and operations. In a 2019 meeting, Plaintiff, unable to understand the financial
statements, yelled at the Companies’ long-standing bookkeeper, accused her of stealing, and
demanded to be sent additional financial documents (which she was given). (Berrin Aff. ¶18;
Gonca Aff. ¶8) In 2020, despite having consented to the Extell sale, Plaintiff berated Berrin and
Gonca when they informed her they had accepted Extell’s reduced $50 million offer. (Berrin Aff.
¶24; Gonca Aff. ¶10)
In contrast, Defendants have repeatedly accommodated Plaintiff. Plaintiff was bestowed
her largely honorific director and officer roles after graduating from film school and struggling
financially and personally. (Berrin Aff. ¶17) Defendants provided Plaintiff with considerable
financial information about the Companies. For example, in August 2019 when Plaintiff requested
an accounting of “current mortgages, their interest rates, and costs,” the Companies quickly
provided the most recent financial statements, as well as a “mortgage spreadsheet, 2019 lists of
payment breakdown for every building as well as maintenance for individual units.” (Id. ¶18,
Ex. C) Plaintiff confirmed that she already had company financial information through 2017. (Id.)
After Plaintiff had difficulties understanding the Companies’ financial statements in 2019,
Plaintiff, at Berrin’s suggestion, took an online finance course to better understand the Companies’
business. (Id. ¶19) In 2020, the Companies decided to retain a real estate advisor. (Berrin Aff.
¶20; Gonca Aff. ¶9) In order to appease Yasemin, the Companies retained her suggested advisor,
but later terminated the advisor because it failed to provide any useful advice or interim invoices
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despite repeated requests, and ultimately billed greatly in excess of the agreed-upon compensation.
(Id.)
Plaintiff’s disruptive behavior in the past few months, including this lawsuit, has the
potential to significantly harm the Companies. Defendants are in the process of reviewing
potential replacement properties in a like-kind exchange under Internal Revenue Code Section
1031. (Berrin Aff. ¶26) Plaintiff seeks to disrupt that process to get what she thinks is her share
of her inheritance, despite her mother stillbeing alive. (Id. ¶27)
Within days of the Extell sale going to contract, Plaintiff sought information about dividing
the Companies, writing to the Companies’ accountant that she “was never privy to the breakdown
of why dividing the shares of the company would be so problematic…. please outline for me with
real numbers what that would mean overall and what it would entail.” (NYSCEF No. 9 at 1)
Plaintiff subsequently made an exceptionally overbroad books and records request seeking among
other things, “all documents and correspondence” related to “the sale or contemplated sale of
properties” and “any mortgages on any of the properties owned by the companies, as well as “all
documents related to the companies’ expenses.” (NYSCEF No. 10 at 2-3) On December 4, 2020,
Defendants’ counsel asked Plaintiff’s counsel to narrow the request, but he declined to do so.
(Affirmation of David B. Schwartz, dated January 15, 2021, (“Schwartz Aff.”) ¶3) On the same
call, Plaintiff’s counsel stated in no uncertain terms that Plaintiff wants one-third of the sale price
from the Extell sale. (Id. ¶4)
Plaintiff attempts to embarrass Berrin and Gonca through personal attacks and
mischaracterizations of family fights that have little to do with the Companies. (Berrin Aff. ¶27;
Gonca Aff. ¶13) As Yasemin admits, the conflict between the parties in 2017 started with a heated
family dinner, resulting in a broader family dispute and Berrin removing Yasemin from the trust
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committee of the Yasemin Trust and as director/officer of the Companies. 2 (Berrin Aff. ¶28;
Gonca Aff. ¶14) Yasemin, however, was never evicted from the apartment the Companies
provided during her temporary stay in New York. (Id.) Rather, Berrin informed Yasemin—after
Yasemin was already on her way back to California—that the apartment would not be available
for her future use. (Berrin Aff. ¶28) In 2019, Berrin’s dispute with Gonca was based on Berrin’s
disapproval of Gonca’s (now former) significant other. 3 (Berrin Aff. ¶29; Gonca Aff. ¶15)
Berrin’s actions (and those of the shareholders and directors of the Companies) with regard to
Yasemin in 2017 and Gonca in 2019 arose from these family disputes, have no bearing on
Plaintiff’s claims, and Berrin and Gonca strongly dispute Plaintiff’s account. (Berrin Aff. ¶27;
Gonca Aff. ¶13)
VI. The Court Denies Plaintiff’s Request for TRO
Plaintiff filed a Summons with Notice on December 21, 2020 and a Complaint (“Compl.”)
on January 3, 2021, alleging direct or derivative claims for breaches of fiduciary duties such as
self-dealing, corporate mismanagement, breach of duty of candor, and retaliation. On January 4,
2021, Plaintiff moved by order to show cause for preliminary injunction with temporary restraining
order (“TRO”) to enjoin Defendants from: (1) “retaliating” against Plaintiff by removing her as
director or officer of the Companies, reducing her salary, or impairing her right to occupy her
home; and (2) using company funds to pay their legal fees in defending this action. After a hearing
2
Berrin’s July 17, 2017 email, cited as purported evidence of employment “retaliation” affirms
this dispute was entirely personal and had nothing to do with corporate governance. (NYSCEF
No. 8 at 1)
3
The relationship became abusive, and Gonca ultimately went to a private mental health
treatment center in California to ensure he could not reach her. (Gonca Aff. ¶15)
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on January 5, 2021, the Court denied Plaintiff’s request for a TRO, (Schwartz Aff., Ex. A at 40:3-
8), and set a briefing schedule for the Motion.
Plaintiff was removed as a Director of Bremen House on January 5, 2021. (Berrin Aff.
¶30, Ex. F) On January 8, 2021, Plaintiff was removed both as Vice-President of Bremen House
(Id. ¶30, Ex. G) and Treasurer of German News (Id. ¶30, Ex. H), and terminated from her
employment. (Id. ¶31, Ex. K) Plaintiff remains in the Companies’ Bel Air house and continues
to receive health insurance at the Companies’ expense. (Id. ¶31)
LEGAL STANDARD
A preliminary injunction substantially limits the non-movant’s interests “prior to any
adjudication of the respective rights of the parties on the merits.” Margolies v. Encounter, Inc.,
42 N.Y.2d 475, 479 (1977). It is a drastic and extraordinary provisional remedy requiring movant
to establish a clear legal right to such relief, supported by undisputed facts. See id.; Scotto v. Mei,
219 A.D.2d 181, 182 (1st Dep’t 1996). Plaintiff must make a clear showing that (1) she is likely
to ultimately succeed on the merits, (2) she will suffer irreparable injury absent relief, and (3) the
balance of the equities favors her. See Doe v. Axelrod, 73 N.Y.2d 748, 750 (1988); Scotto, 219
A.D.2d at 182. She has the burden of proving these elements through
Preview
FILED: NEW YORK COUNTY CLERK 01/15/2021 10:46 PM INDEX NO. 657193/2020 NYSCEF DOC. NO. 21 RECEIVED NYSCEF: 01/15/2021 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK YASEMIN TEKINER, in her individual capacity, as a beneficiary and a Trustee of The Yasemin Tekiner Index No.: 657193/2020 2011 Descendants Trust and derivatively as a holder of equitable interests in a shareholder or a member of the Company Motion Sequence #1 Defendants, Plaintiff, -against- BREMEN HOUSE INC., BREMEN HOUSE TEXAS, INC., GERMAN NEWS COMPANY, INC., GERMAN NEWS TEXAS, INC., 254-258 W. 35TH ST. LLC, BERRIN TEKINER, GONCA TEKINER, and BILLUR AKIPEK, in her capacity as a Trustee of The Yasemin Tekiner 2011 Descendants Trust, Defendants. MEMORANDUM OF LAW IN OPPOSITION TO PLAINTIFF’S MOTION FOR A PRELIMINARY INJUNCTION Judith A. Archer David B. Schwartz Sean M. Topping NORTON ROSE FULBRIGHT US LLP 1301 Avenue of the Americas New York, NY 10019-6022 +1 212 318-3000 Attorneys for Defendants 1 of 29 FILED: NEW YORK COUNTY CLERK 01/15/2021 10:46 PM INDEX NO. 657193/2020 NYSCEF DOC. NO. 21 RECEIVED NYSCEF: 01/15/2021 TABLE OF CONTENTS Page PRELIMINARY STATEMENT ............................................................................................. 1 STATEMENT OF FACTS ..................................................................................................... 2 I. Parties ............................................................................................................. 2 II. Companies Flourish Under Defendants’ Stewardship For More Than 30 Years............................................................................................................... 3 III. All Parties, Including Plaintiff, Have Reaped the Benefits of the Companies’ Success......................................................................................... 4 IV. Companies Sell Unprofitable Properties............................................................ 6 V. Plaintiff’s Disruptive Behavior Threatens the Stability of the Companies, Despite Defendants’ Efforts to Accommodate Her ............................................ 7 VI. The Court Denies Plaintiff’s Request for TRO .................................................. 9 LEGAL STANDARD ...........................................................................................................10 ARGUMENT ........................................................................................................................11 I. PLAINTIFF SATISFIES NONE OF THE REQUIREMENTS FOR A PRELIMINARY INJUNCTION......................................................................11 A. Plaintiff Suffers No Irreparable Harm ...................................................11 B. Plaintiff’s Claims Are Likely to Fail .....................................................13 1. Berrin and Gonca Have Not Self-Dealt, While Plaintiff Makes Such Claims With Unclean Hands..................................13 2. Plaintiff Provides No Evidence of Corporate Mismanagement .......................................................................15 3. Defendants Have Not Breached Duties of Candor ......................17 C. The Balance of the Equities Weighs Against Granting a Preliminary Injunction .........................................................................19 II. PLAINTIFF SEEKS RELIEF THAT SHOULD NOT BE GRANTED THROUGH PRELIMINARY INJUNCTION...................................................20 A. Defendant’s Vague Claims of Possible “Retaliation” is a Smoke Screen For Permissive Corporate Action...............................................20 B. The BCL and the Companies’ By-Laws Permits Use of Corporate Assets to Pay Legal Fees ......................................................................22 CONCLUSION ......................................................................................................................23 -i- 2 of 29 FILED: NEW YORK COUNTY CLERK 01/15/2021 10:46 PM INDEX NO. 657193/2020 NYSCEF DOC. NO. 21 RECEIVED NYSCEF: 01/15/2021 TABLE OF AUTHORITIES Page(s) Cases 1234 Broadway LLC v. West Side SRO Law Project, 86 A.D.3d 18 (1st Dep’t 2011) .......................................................................................... 10 40 W. 67th St. Corp. v. Pullman, 100 N.Y.2d 147 (2003) ..................................................................................................... 13 Ajettix Inc. v. Raub, 9 Misc.3d 908 (Sup. Ct. Monroe Cty. 2005)....................................................................... 18 American Commerce Ins. Co. v Francois, 125 A.D.3d 903 (2d Dep’t 2016) ....................................................................................... 11 Bansbach v. Zinn, 1 N.Y.3d 1 (2003) ............................................................................................................. 22 Birnbaum v. Birnbaum, 73 N.Y.2d 461 (1989) ....................................................................................................... 14 Blake v. Blake, 225 A.D.2d 337 (1st Dep’t 1996) ...................................................................................... 15 Burry v. Madison Park Owner LLC, 84 A.D.3d 699 (1st Dep’t 2011) ........................................................................................ 13 Chrysler Corp. v. Fedders Corp., 63 A.D.2d 567 (1st Dep’t 1978) ........................................................................................ 19 Cohen v. Cocoline Prod., 309 N.Y. 119 (1955) ......................................................................................................... 17 Doe v. Axelrod, 73 N.Y.2d 748 (1988) ....................................................................................................... 10 Donovan v. Rothman, 253 A.D.2d 627 (1st Dep’t 1998) ...................................................................................... 22 Dwyer v. DiNardo & Metschl, P.C., 41 A.D.3d 1177 (4th Dep’t 2007) ...................................................................................... 18 Ed Cia Corp. v. McCormack, 44 A.D.3d 991 (2d Dep’t 2007) ......................................................................................... 11 -ii- 3 of 29 FILED: NEW YORK COUNTY CLERK 01/15/2021 10:46 PM INDEX NO. 657193/2020 NYSCEF DOC. NO. 21 RECEIVED NYSCEF: 01/15/2021 Eikenberry v. Lamson, No. 516653/20, 2020 WL 7041788 (Kings Cty. Sup. Ct., Nov. 30, 2020)...................... 11, 12 Evangelista v. Longo, 13 A.D.2d 835 (2d Dep’t 1961) ......................................................................................... 14 Global Minerals and Metals Corp. v. Holme, 35 A.D.3d 93 (1st Dep’t 2006) .......................................................................................... 13 Gottfried v. Gottfried, 112 N.Y.S.2d 431 (Sup. Ct. N.Y. Cty. 1952)...................................................................... 14 Hammerman v. Bueche-Girod Corp., 72 A.D.2d 677 (1st Dep’t 1979) ........................................................................................ 18 Happy Kids, Inc. v. Glasgow, No. 01 Civ. 6434, 2002 WL 72937 (S.D.N.Y. Jan. 17, 2002).............................................. 22 J-K Apparel Sales Co. v. Jacobs, No. 2017-11423, 2020 WL 7233671 (2d Dep’t Dec. 9, 2020) ............................................. 21 Laker v. Assoc. of Prop. Owners of Sleepy Hollow Lake Inc., 172 A.D.3d 1660 (3d Dep’t 2019) ..................................................................................... 12 Levine v. Levine, 184 A.D.2d 53 (1st Dep’t 1992) ........................................................................................ 16 M&M Country Store, Inc. v. Kelly, 159 A.D.3d 1102 (3d Dep’t 2018) ..................................................................................... 16 Margolies v. Encounter, Inc., 42 N.Y.2d 475 (1977) ....................................................................................................... 10 McGlaughlin, Piven, Vogel, Inc. v. W.J. Nolan & Co., 114 A.D.2d 165 (2d Dep’t 1986) ....................................................................................... 19 Mr. Natural, Inc. v. Unadulterated Food Prods., Inc., 152 A.D.2d 729 (2d Dep’t 1989) ....................................................................................... 19 Owen v. Hamilton, 44 A.D.3d 452 (1st Dep’t 2007) ........................................................................................ 13 Pilipiak v. Keyes, 286 A.D.2d 231 (1st Dep’t 2001) ................................................................................ 12, 22 Redmond v. Redmond, 42 A.D.2d 542 (1st Dep’t 1973) ........................................................................................ 21 -iii- 4 of 29 FILED: NEW YORK COUNTY CLERK 01/15/2021 10:46 PM INDEX NO. 657193/2020 NYSCEF DOC. NO. 21 RECEIVED NYSCEF: 01/15/2021 Rockowitz v. Raab, 132 A.D.2d 916 (3d Dep’t 1987) ....................................................................................... 21 Scotto v. Mei, 219 A.D.2d 181 (1st Dep’t 1996) ...................................................................................... 10 Shapiro v. Rockville Country Club, Inc., 22 A.D.3d 657 (2d Dep’t 2005) ......................................................................................... 15 Spectrum Stamford, LLC v. 400 Atlantic Title, LLC, 162 A.D.3d 615 (1st Dep’t 2018) ...................................................................................... 19 Steinberg v. Steinberg, 434 N.Y.S.2d 877 (Sup. Ct. N.Y. Cty. 1980)...................................................................... 14 Sterling Fifth Assocs. v. Carpentille Corp., 5 A.D.3d 328 (1st Dep’t 2004) .......................................................................................... 12 Tatko v. Sheldon Slate Products Co., Inc., 2 A.D.3d 1030 (3d Dep’t 2003) ......................................................................................... 14 Town of Liberty Volunteer Ambulance Corp. v Catskill Regional Med. Ctr., 30 A.D.3d 739 (3d Dep’t 2006) ......................................................................................... 11 Valentine v. Schembri, 212 A.D.2d 371 (1st Dep’t 1995) ...................................................................................... 11 Rules and Statutes BCL § 720(a)(1) ..................................................................................................................... 22 BCL § 720(a)(3) ..................................................................................................................... 22 BCL §§ 721-723..................................................................................................................... 22 BCL § 722(a)-(b).................................................................................................................... 22 BCL §§ 723(c) ....................................................................................................................... 22 -iv- 5 of 29 FILED: NEW YORK COUNTY CLERK 01/15/2021 10:46 PM INDEX NO. 657193/2020 NYSCEF DOC. NO. 21 RECEIVED NYSCEF: 01/15/2021 Defendants Bremen House, Inc., Bremen House Texas, Inc., German News Company, Inc., German News Texas, Inc., 254-258 W 35th St LLC, Berrin Tekiner, and Gonca Tekiner (collectively, “Defendants” 1), hereby submit this Memorandum of Law in Opposition to Plaintiff’s Motion for a Preliminary Injunction with Temporary Restraining Order (the “Motion”). PRELIMINARY STATEMENT This is not a case about corporate malfeasance, but rather the act of an angry daughter— unsatisfied with millions of dollars in benefits she has received from her mother’s generosity— seeking an early inheritance through threats of sabotage to the companies her family has managed for over 70 years. Plaintiff is seeking a quick payday by armchair quarterbacking the Companies while living in Bel Air, California, pursuing her dream of being a screenwriter. Plaintiff’s incendiary attacks regarding her mother’s and sister’s health demonstrate that she is motivated not just by greed, but also long-simmering personal animus. Plaintiff’s mean-spirited allegations and recounting of family disputes are entirely personal, concern matters that have not affected the Companies’ management, and have no place in the public record. Plaintiff’s Motion asks the Court to maintain, or reinstate, the benefits she enjoys from the Companies, including a six-figure salary and rent-free living in a Bel Air mansion, while she pursues claims against Defendants for similar benefits. Plaintiff’s request fails because (1) she has not made the required showing to justify a preliminary injunction—especially absent irreparable harm—and (2) she seeks to enjoin actions that are justified under the Companies’ governing documents and the Business Corporations Law. Plaintiff’s actions, on the other hand, threaten to interfere with the Companies’ operations, including the acquisition of replacement properties 1 The Motion does not seek relief from Defendant Billur Akipek. 6 of 29 FILED: NEW YORK COUNTY CLERK 01/15/2021 10:46 PM INDEX NO. 657193/2020 NYSCEF DOC. NO. 21 RECEIVED NYSCEF: 01/15/2021 allowing the Companies to reap tax benefits from recent property sales. Plaintiff’s Motion should be denied. STATEMENT OF FACTS I. Parties Bremen House, Inc. (“Bremen House”) and German News Company, Inc. (“German News,” and collectively the “Companies”) own, manage, and rent, either directly or through wholly-owned subsidiaries (including Bremen House Texas, Inc. and German News Texas, Inc.), a portfolio of residential and commercial real estate properties. (Affidavit of Berrin Tekiner, dated January 14, 2021 (“Berrin Aff.”) ¶2) The Companies are managed by Defendants Berrin Tekiner (“Berrin”) and Gonca Tekiner (“Gonca”). (Id.) Berrin is the Chairperson of the Companies, which she has successfully lead for more than 30 years. (Id. ¶¶1,2) Berrin is Plaintiff’s and Gonca’s mother. (Id. ¶¶2-3) Gonca is the Companies’ President, and a member of their Boards of Directors. (Affidavit of Gonca Tekiner Hartmann, dated January 14, 2021 (“Gonca Aff.”) ¶1) Gonca worked for the Companies part-time in the 1990s and full-time since 2005. (Id. ¶2) Plaintiff was a member of the Board of Directors and Vice President of Bremen House, as well as Treasurer of German News. (Berrin Aff. ¶3) She currently resides in an approximately $3.5 million home in Bel Air, California owned by Bremen House. (Id.) Since 2011, Plaintiff has been the beneficiary of the Yasemin Tekiner 2011 Descendants Trust (the “Yasemin Trust”), similar to trusts created for her siblings. (Id. ¶4) The Yasemin Trust’s only assets are approximately one-third of the shares of Bremen House and German News and approximately one-sixth of the interest in 254-258 W 35th St LLC; its most significant liability are notes valued at over $10 million, held by Berrin. (Id.) The Yasemin Trust does not require its Trustee make any distributions to Plaintiff. (Id., Ex. A, Art. 2(B)) Berrin is the sole member of the Protector -2- 7 of 29 FILED: NEW YORK COUNTY CLERK 01/15/2021 10:46 PM INDEX NO. 657193/2020 NYSCEF DOC. NO. 21 RECEIVED NYSCEF: 01/15/2021 Committee of the Yasemin Trust and can remove any member of the trust committee of the Yasemin Trust without cause in her discretion. (Id., Ex. A, Art. 6(A)(1)-(3)) Billur Akipek isthe sole member of the trust committee, while Christiana Trust, a Division of Wilmington Savings Fund Society, FSB, acts as the Yasemin Trust’s directed trustee. (Id. ¶4) The trust committee directs the trustee and has no obligation to distribute any funds to Yasemin. (Id.) II. The Companies Flourish Under Defendants’ Stewardship For More Than 30 Years Defendants have successfully managed the Companies for over three decades. Sami Tekiner, Berrin’s husband and Plaintiff and Gonca’s father, acquired several commercial and residential real estate properties during his lifetime. (Berrin Aff. ¶5) Sadly, in the late 1980s, Sami began suffering from Alzheimer’s Disease, which affected his ability to manage the Companies. (Id.) Berrin stepped in to manage the Companies during Sami’s illness, working not only to save the Companies, but also to care for her ill husband and three young daughters. (Id.) At that time, Berrin had taken business courses at Marymount Manhattan College for approximately two years. (Id.) In 1994, when Sami died, the Companies were valued at approximately $15 million. (Id. ¶6) Under Berrin’s management, the Companies prospered and expanded their holdings, including acquiring three Texas shopping centers and incorporating Bremen House Texas in 2007 and German News Texas in 2017. (Id.) By the end of 2019, the Companies collectively held a portfolio of 22 commercial and residential properties in various states, held assets in excess of $75 million, and were underleveraged with modest debt of less than $20 million. (Id. ¶7) In 2019, the Companies effectively broke even, with a small net operating loss of approximately $220,000. (Id.) The Companies’ staff, along with Berrin and Gonca, manage the properties, lease space to commercial and residential tenants, coordinate property maintenance, and perform various other -3- 8 of 29 FILED: NEW YORK COUNTY CLERK 01/15/2021 10:46 PM INDEX NO. 657193/2020 NYSCEF DOC. NO. 21 RECEIVED NYSCEF: 01/15/2021 administrative tasks to ensure that the Companies comply with federal, state, and city regulations. (Id. ¶8; Gonca Aff. ¶2) Berrin and Gonca have provided stable leadership that has been unaffected by limited health issues that have, on rare occasions, required hospitalization or treatment. (Berrin Aff. ¶8; Gonca Aff. ¶5) Berrin, who has a chronic heart condition, has in the past been briefly hospitalized for treatment. (Berrin Aff. ¶8) Berrin and Gonca have also each briefly stayed at a private mental health treatment center. (Berrin Aff. ¶8; Gonca Aff. ¶5) At no point has any health issue of Berrin or Gonca impaired the management or operations of the Companies. (Id.) While Defendants have diligently managed the Companies, Plaintiff has done virtually nothing to assist them. (Berrin Aff. ¶13) Plaintiff pursued an undergraduate degree in Psychology, a graduate degree in Film, and, in or around 2012, moved to Los Angeles to pursue her dream of being a screenwriter. (Id.) Plaintiff rarely returns to New York, appears in the Companies’ offices, or attempts to productively assist in managing them. (Id. ¶14; Gonca Aff. ¶3) On multiple occasions, Plaintiff even thanked Berrin and Gonca for their work at the Companies that allows Plaintiff to pursue her dreams. (Gonca Aff. ¶3) III. All Parties, Including Plaintiff, Have Reaped the Benefits of the Companies’ Success The Companies are closely held corporate entities, and Berrin has sought to generously provide for all three of her daughters. The Companies hold title to several residential properties, including those occupied by Plaintiff, Gonca, their other sister, and Berrin. (Berrin Aff. ¶9) Gonca and Plaintiff live in comparably-valued homes owned by the Companies. (Id.) The proceeds of the loan used to purchase the home for Gonca were also used to finance company debt. (Id. ¶11) When the Defendants have vacated a company-owned property, the Companies have typically either sold or rented it. (Id. ¶10) After Gonca moved to Bronxville in 2017, the New York apartment in which she previously resided was rented. (Id.) When the $3.5 million Bel Air home in which Plaintiff -4- 9 of 29 FILED: NEW YORK COUNTY CLERK 01/15/2021 10:46 PM INDEX NO. 657193/2020 NYSCEF DOC. NO. 21 RECEIVED NYSCEF: 01/15/2021 resides was purchased, the New York apartment (owned by the Companies), in which she resided before moving to California, was sold. (Id.) The Companies generally pay for upkeep on these properties. For example, while complaining of such payments for her mother and sister, Plaintiff sent the Companies a $3,200 landscaping bill on the day she commenced this action. (Id. ¶9, Ex. B) The Companies pay Defendants’ salaries and provide certain services, such as a driver for Berrin, to assist in Defendants’ management of the Companies. (Id. ¶12) Gonca’s employment contract, salary, and benefits are commensurate with her position as the Companies’ President overseeing their day-to-day operations. (Id.) Finally, the Companies pay for office and overhead expenses, including telephone bills necessary to conduct company business and pet food for rescue cats that reside in the company offices. (Id.) While Berrin generously ensured that all three of her daughters benefited from the Companies’ success, she has been especially generous to Plaintiff. Plaintiff previously lived in a multi-million dollar apartment owned by the Companies. (Id. ¶14) After Plaintiff moved to California, the Companies, at Berrin’s direction, purchased a multi-million dollar Bel Air home for her. (Id.) She has lived continuously in Los Angeles since 2012, with the exception of late 2016 to April 2017 when she returned to New York for her fiancée’s work as a successful television writer and producer. (Id.) At Berrin’s direction, the Companies have paid Plaintiff annual compensation, which, since 2016, has ranged between $200,000 and $290,000 and rewarded her with a pension valued at over $660,000. (Id. ¶15) She also lives in a company-owned mansion, for which she pays no out-of- pocket expenses (the Companies pay rent as a bonus to Plaintiff each year). (Id. ¶14) When Plaintiff temporarily relocated to New York in 2016-2017, the Companies spent over $70,000 to -5- 10 of 29 FILED: NEW YORK COUNTY CLERK 01/15/2021 10:46 PM INDEX NO. 657193/2020 NYSCEF DOC. NO. 21 RECEIVED NYSCEF: 01/15/2021 renovate an apartment for her use, and when Plaintiff disliked the apartment, provided her a $14,000-per-month townhouse until she returned to Bel Air. (Id.) Finally, in 2019, Berrin paid for Plaintiff and her now fiancée to take extended, luxury vacations to Bora Bora and Turkey and, in Turkey, arranged an engagement party for them. (Id. ¶16) IV. The Companies Sell Unprofitable Properties In recent years, some of the Companies’ New York properties have become unprofitable due to their advanced age, excessive maintenance costs, and the number of rent-controlled and rent-stabilized tenants. (Berrin Aff. ¶21) The Companies made the fiscally prudent decision to sell five unprofitable buildings. (Id.) They listed the buildings for sale and they sat on the market for the better part of a year despite Defendants’ best efforts to find a suitable buyer. (Id.) While Defendants received a handful of offers, all were well below what they found to be an acceptable sales price. (Id.) At the same time, after the COVID-19 pandemic struck, widespread economic difficulties lead fewer of the Companies’ tenants to pay rent, causing gross rental income to plummet by more than one-third. (Id.) Faced with persistent losses and a depressed real estate market, the Defendants made the calculated business decision to accept Extell Acquisitions LLC’s (“Extell”) offer to purchase five buildings for $60 million. (Id. ¶22) Plaintiff consented to the sale in writing, telling Berrin that she was willing to accept an even lower price. (Id. ¶23) Before signing the purchase contract, the parties decided to split the transaction into two: one for $45 million (for four buildings) and one for $15 million (for the other building). (Id. ¶24) Immediately prior to signing the contracts on October 12, 2020, Extell demanded a reduction of purchase price of the first four buildings from $45 to $35 million. (Id.) With no other serious buyers, the Defendants elected to execute the contracts at the modified price. (Id.) Defendants and Extell closed on the sale of the four buildings -6- 11 of 29 FILED: NEW YORK COUNTY CLERK 01/15/2021 10:46 PM INDEX NO. 657193/2020 NYSCEF DOC. NO. 21 RECEIVED NYSCEF: 01/15/2021 for $35 million on December 21, 2020, but Extell defaulted on its purchase of the fifth building. (Id. ¶25) V. Plaintiff’s Disruptive Behavior Threatens the Stability of the Companies, Despite Defendants’ Efforts to Accommodate Her Despite her limited role with the Companies, Plaintiff has repeatedly sought to disrupt their management and operations. In a 2019 meeting, Plaintiff, unable to understand the financial statements, yelled at the Companies’ long-standing bookkeeper, accused her of stealing, and demanded to be sent additional financial documents (which she was given). (Berrin Aff. ¶18; Gonca Aff. ¶8) In 2020, despite having consented to the Extell sale, Plaintiff berated Berrin and Gonca when they informed her they had accepted Extell’s reduced $50 million offer. (Berrin Aff. ¶24; Gonca Aff. ¶10) In contrast, Defendants have repeatedly accommodated Plaintiff. Plaintiff was bestowed her largely honorific director and officer roles after graduating from film school and struggling financially and personally. (Berrin Aff. ¶17) Defendants provided Plaintiff with considerable financial information about the Companies. For example, in August 2019 when Plaintiff requested an accounting of “current mortgages, their interest rates, and costs,” the Companies quickly provided the most recent financial statements, as well as a “mortgage spreadsheet, 2019 lists of payment breakdown for every building as well as maintenance for individual units.” (Id. ¶18, Ex. C) Plaintiff confirmed that she already had company financial information through 2017. (Id.) After Plaintiff had difficulties understanding the Companies’ financial statements in 2019, Plaintiff, at Berrin’s suggestion, took an online finance course to better understand the Companies’ business. (Id. ¶19) In 2020, the Companies decided to retain a real estate advisor. (Berrin Aff. ¶20; Gonca Aff. ¶9) In order to appease Yasemin, the Companies retained her suggested advisor, but later terminated the advisor because it failed to provide any useful advice or interim invoices -7- 12 of 29 FILED: NEW YORK COUNTY CLERK 01/15/2021 10:46 PM INDEX NO. 657193/2020 NYSCEF DOC. NO. 21 RECEIVED NYSCEF: 01/15/2021 despite repeated requests, and ultimately billed greatly in excess of the agreed-upon compensation. (Id.) Plaintiff’s disruptive behavior in the past few months, including this lawsuit, has the potential to significantly harm the Companies. Defendants are in the process of reviewing potential replacement properties in a like-kind exchange under Internal Revenue Code Section 1031. (Berrin Aff. ¶26) Plaintiff seeks to disrupt that process to get what she thinks is her share of her inheritance, despite her mother stillbeing alive. (Id. ¶27) Within days of the Extell sale going to contract, Plaintiff sought information about dividing the Companies, writing to the Companies’ accountant that she “was never privy to the breakdown of why dividing the shares of the company would be so problematic…. please outline for me with real numbers what that would mean overall and what it would entail.” (NYSCEF No. 9 at 1) Plaintiff subsequently made an exceptionally overbroad books and records request seeking among other things, “all documents and correspondence” related to “the sale or contemplated sale of properties” and “any mortgages on any of the properties owned by the companies, as well as “all documents related to the companies’ expenses.” (NYSCEF No. 10 at 2-3) On December 4, 2020, Defendants’ counsel asked Plaintiff’s counsel to narrow the request, but he declined to do so. (Affirmation of David B. Schwartz, dated January 15, 2021, (“Schwartz Aff.”) ¶3) On the same call, Plaintiff’s counsel stated in no uncertain terms that Plaintiff wants one-third of the sale price from the Extell sale. (Id. ¶4) Plaintiff attempts to embarrass Berrin and Gonca through personal attacks and mischaracterizations of family fights that have little to do with the Companies. (Berrin Aff. ¶27; Gonca Aff. ¶13) As Yasemin admits, the conflict between the parties in 2017 started with a heated family dinner, resulting in a broader family dispute and Berrin removing Yasemin from the trust -8- 13 of 29 FILED: NEW YORK COUNTY CLERK 01/15/2021 10:46 PM INDEX NO. 657193/2020 NYSCEF DOC. NO. 21 RECEIVED NYSCEF: 01/15/2021 committee of the Yasemin Trust and as director/officer of the Companies. 2 (Berrin Aff. ¶28; Gonca Aff. ¶14) Yasemin, however, was never evicted from the apartment the Companies provided during her temporary stay in New York. (Id.) Rather, Berrin informed Yasemin—after Yasemin was already on her way back to California—that the apartment would not be available for her future use. (Berrin Aff. ¶28) In 2019, Berrin’s dispute with Gonca was based on Berrin’s disapproval of Gonca’s (now former) significant other. 3 (Berrin Aff. ¶29; Gonca Aff. ¶15) Berrin’s actions (and those of the shareholders and directors of the Companies) with regard to Yasemin in 2017 and Gonca in 2019 arose from these family disputes, have no bearing on Plaintiff’s claims, and Berrin and Gonca strongly dispute Plaintiff’s account. (Berrin Aff. ¶27; Gonca Aff. ¶13) VI. The Court Denies Plaintiff’s Request for TRO Plaintiff filed a Summons with Notice on December 21, 2020 and a Complaint (“Compl.”) on January 3, 2021, alleging direct or derivative claims for breaches of fiduciary duties such as self-dealing, corporate mismanagement, breach of duty of candor, and retaliation. On January 4, 2021, Plaintiff moved by order to show cause for preliminary injunction with temporary restraining order (“TRO”) to enjoin Defendants from: (1) “retaliating” against Plaintiff by removing her as director or officer of the Companies, reducing her salary, or impairing her right to occupy her home; and (2) using company funds to pay their legal fees in defending this action. After a hearing 2 Berrin’s July 17, 2017 email, cited as purported evidence of employment “retaliation” affirms this dispute was entirely personal and had nothing to do with corporate governance. (NYSCEF No. 8 at 1) 3 The relationship became abusive, and Gonca ultimately went to a private mental health treatment center in California to ensure he could not reach her. (Gonca Aff. ¶15) -9- 14 of 29 FILED: NEW YORK COUNTY CLERK 01/15/2021 10:46 PM INDEX NO. 657193/2020 NYSCEF DOC. NO. 21 RECEIVED NYSCEF: 01/15/2021 on January 5, 2021, the Court denied Plaintiff’s request for a TRO, (Schwartz Aff., Ex. A at 40:3- 8), and set a briefing schedule for the Motion. Plaintiff was removed as a Director of Bremen House on January 5, 2021. (Berrin Aff. ¶30, Ex. F) On January 8, 2021, Plaintiff was removed both as Vice-President of Bremen House (Id. ¶30, Ex. G) and Treasurer of German News (Id. ¶30, Ex. H), and terminated from her employment. (Id. ¶31, Ex. K) Plaintiff remains in the Companies’ Bel Air house and continues to receive health insurance at the Companies’ expense. (Id. ¶31) LEGAL STANDARD A preliminary injunction substantially limits the non-movant’s interests “prior to any adjudication of the respective rights of the parties on the merits.” Margolies v. Encounter, Inc., 42 N.Y.2d 475, 479 (1977). It is a drastic and extraordinary provisional remedy requiring movant to establish a clear legal right to such relief, supported by undisputed facts. See id.; Scotto v. Mei, 219 A.D.2d 181, 182 (1st Dep’t 1996). Plaintiff must make a clear showing that (1) she is likely to ultimately succeed on the merits, (2) she will suffer irreparable injury absent relief, and (3) the balance of the equities favors her. See Doe v. Axelrod, 73 N.Y.2d 748, 750 (1988); Scotto, 219 A.D.2d at 182. She has the burden of proving these elements through