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FILED: NEW YORK COUNTY CLERK 12/24/2022 01:09 PM INDEX NO. 657193/2020
NYSCEF DOC. NO. 979 RECEIVED NYSCEF: 12/24/2022
SUPREME COURT OF THE STATE OF NEW YORK
COMMERCIAL DIVISION: NEW YORK COUNTY
-------------------------------------------------------------- x
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 : Commercial Division Part 3
of the Company Defendants, :
Plaintiff, : Hon. Joel M. Cohen, J.S.C.
:
- against – : Motion Seq. No.
:
BREMEN HOUSE INC., GERMAN NEWS :
COMPANY, INC., BERRIN TEKINER, GONCA :
TEKINER, and BILLUR AKIPEK, in her capacity :
as a Trustee of The Yasemin Tekiner 2011 :
Descendants Trust, :
Defendants. :
-------------------------------------------------------------- x
ZEYNEP TEKINER, :
:
in her individual capacity, as a :
beneficiary and a Trustee of The Zeynep :
Tekiner 2011 Descendants Trust and :
derivatively as a holder of equitable :
interests in a shareholder or a member of :
the Company Defendants, :
:
Intervenor-Plaintiff, :
:
- :
against- :
:
BREMEN HOUSE INC., GERMAN NEWS :
COMPANY, INC., BERRIN TEKINER, GONCA :
TEKINER, and BILLUR AKIPEK, in her capacity :
as a Trustee of The Zeynep Tekiner 2011 :
Descendants Trust, :
:
Defendants. :
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MEMORANDUM OF LAW OF PLAINTIFFS, YASEMIN TEKINER AND ZEYNEP
TEKINER, IN SUPPORT OF THEIR ORDER TO SHOW CAUSE FOR LEAVE TO
TAKE POST-NOTE OF ISSUE DISCOVERY AND, ALTERNATIVELY, FOR A CASE
MANAGEMENT CONFERENCE AND/OR TO APPOINT
A SPECIAL DISCOVERY MASTER
Stephen P. Younger Michele Kahn
FOLEY HOAG LLP KAHN & GOLDBERG, LLP
1301 Avenue of the Americas 555 Fifth Avenue, 14th Floor
25th Floor New York, New York 10017
New York, NY 10019 Telephone: (212) 687-5066
(212) 812-0365 mk@kahngoldberg.com
spyounger@foleyhoag.com
Attorneys for Plaintiff Yasemin Tekiner Attorneys for Plaintiff Zeynep Tekiner
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TABLE OF CONTENTS
PRELIMINARY STATEMENT .................................................................................................... 1
FACTUAL BACKGROUND ......................................................................................................... 5
ARGUMENT .................................................................................................................................. 8
I. THIS COURT SHOULD GRANT PLAINTIFFS’ REQUEST FOR LEAVE TO TAKE
POST-NOTE OF ISSUE DISCOVERY ..................................................................................... 8
A. Legal Standard .............................................................................................................. 8
B. Post-Note of Issue Discovery Is Critical ...................................................................... 8
C. Extension of Expert Disclosure .................................................................................. 20
D. Granting of Negative Inference .................................................................................. 21
II. ALTERNATIVELY, THIS COURT SHOULD APPOINT A SPECIAL DISCOVERY
MASTER TO MANAGE DISCOVERY PURSUANT TO CPLR 3104 .................. 21
A. Standard of Review .................................................................................................... 21
B. Defendants’ Refusal to Engage in Meaningful and Good Faith Discovery Warrants
the Appointment of a Special Discovery Master .................................................................. 22
CONCLUSION ............................................................................................................................. 23
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TABLE OF AUTHORITIES
Cases
Baker v General Mills Fun Grp., Inc., 101 Misc. 2d 193 [Sup Ct, NY County 1979]................. 21
Cadlerock Joint Venture, L.P. v Sol Greenberg &Sons Int’l, Inc., 94 AD3d 580
[1st Dept 2012] ......................................................................................................................... 21
Capoccia v Brognano, 126 AD2d 323 [3d Dept 1987] ................................................................ 21
cf. Hindlin v. Prescription Songs LLC, Index No. 651974/2018 (Oct. 6, 2020) (Masley, J.) ...... 21
Cuprill v. Citywide Towing & Auto Repair Servs., 149 A.D.3d 442 (1st Dep’t 2017).................. 8
Hickey v. City of New York, 159 A.D.3d 511 (1st Dep’t 2018) ...................................................... 8
Kogan v Royal Indem. Co., 179 AD2d 399 (1st Dept 1992) ........................................................ 21
Lowitt v Korelitz, 152 AD2d 506 [1st Dept 1989] ........................................................................ 21
O’Neill v Ho, 28 AD3d 626 [2d Dept 2006]................................................................................. 21
Parker v Ollivierre, 60 AD3d 1023 [2d Dept 2009]..................................................................... 21
Valencia v. City of New York, 188 A.D.3d 549 (1st Dep’t 2020) ................................................... 8
Vasile v Chisena, 272 AD2d 610 [2d Dept 2000] ........................................................................ 21
Voom HD Hoildings LLC v. Echostar Staellite L.L.C., 93 A.D.3d 33 (1st Dep’t 2012) .............. 21
Rules
22 N.Y.C.R.R. 202.21(d) ................................................................................................................ 1
CPLR 3104................................................................................................................................ 1, 21
CPLR 4201.................................................................................................................................... 21
CPLR 4212.................................................................................................................................... 21
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Treatises
A Carmody-Wait 2d § 42:639....................................................................................................... 21
Other Authorities
Maryann C. Stallone, Private Judging: What Is It, and How Can It Help to Advance Your Case?,
27 NYSBA Commercial and Federal Litigation Section Newsletter 2 (2021) ......................... 22
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Plaintiffs, Yasemin Tekiner (“Yasemin”) and Zeynep Tekiner (“Zeynep”) (collectively,
“Plaintiffs”), respectfully submit this memorandum of law in support of their Order to Show Cause
(the “OTSC”), for: (1) leave to take post-Note of Issue discovery pursuant to 22 N.Y.C.R.R.
202.21(d); (2) granting a negative inference; and, alternatively, (3) for a case management
conference and/or to appoint a special discovery master, pursuant to CPLR 3104. 1
PRELIMINARY STATEMENT
Plaintiffs principally request that this Court: compel Defendants to comply with their
discovery obligations and the Court’s prior Orders, grant Plaintiffs’ pending discovery motions,
grant a negative inference, and grant Plaintiffs leave to take post-Note of Issue discovery to prevent
substantial prejudice to Plaintiffs due to Defendants’ persistent failures to engage in good faith
discovery.
As set forth in Plaintiffs’ Memorandum of Law in Support of Their Order to Show Cause
to Compel Compliance with Discovery Order and Appoint a Special Discovery Master (see
NYSCEF Doc. No. 754), when Defendants’ new counsel joined this case on July 8, 2022, they
asked the Court for an extremely long stay of all proceedings. The Court denied their request.
Thereafter, instead of engaging in good faith discovery, Defendants continuously delayed
complying with their discovery obligations and at least two Court Orders. For example, on August
17, 2022, the Court granted, in part Plaintiff Yasemin’s motion to compel documents Defendants
had previously withheld as privileged “to the extent that Defendants’ categorical assertion of
privilege with respect to corporate business-related documents is overly broad…” (NYSCEF Doc.
No. 680.) The Court also granted, in part, Plaintiff’s motion to compel discovery relating to
1
Plaintiffs hereby incorporate by reference their motions, orders to show cause, and accompanying briefing and
exhibits filed on October 5, 2022 (NYSCEF Doc. No. 726-754), October 24, 2022 (NYSCEF Doc. No. 805-814, 816-
839), December 21, 2022 (NYSCEF Doc. No. 952-960), and December 22, 2022 (NYSCEF Doc. No. 965-968).
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Defendants’ medical condition, history, and records, and ordered the parties to “carefully and
narrowly tailor their proposed discovery” relating to these subjects. (Id.) Defendants failed to
promptly produce the documents they claimed were privileged—the vast majority of which were
never privileged. Instead, Defendants produced numerous documents during and after party
depositions, which were held during the last week of the previous discovery period. (See Younger
Aff., Ex. A.) In addition, Defendants refused outright to produce any mental health and medical
documentation, despite having been ordered to do so.
Defendants had repeatedly refused to schedule party depositions until the last week of
discovery, and then tried to jam all of the depositions together with third-party depositions in a
single week. This was obviously unworkable.
And, Defendants repeatedly refused to produce critical bank records.
As a result of all of this, Plaintiffs moved to appoint a special discovery master on October
5, 2022. (NYSCEF Doc. No. 754.) Immediately after that motion was made, Defendants turned
over—not in discovery, but as part of a much-delayed corporate records inspection—highly
selective and redacted bank records from a single Santander bank account. Even those minimal
banking records were highly revealing, showing at least $3 million dollars that Berrin wrongly
diverted from Company coffers to herself.
Plaintiffs only recently received additional bank records in response to Yasemin’s
subpoena to Santander, and are still awaiting from Santander the entirety of the requested
production.
Many key discovery issues remain, despite Plaintiffs’ best efforts to secure Defendants’
compliance:
• Withheld Mental Health and Substance Abuse Documents: As set forth in
Yasemin’s recently filed motion to compel (see NYSCEF Doc. No. 965-968),
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Defendants have refused to consent to any hospital subpoenas. They have refused
to produce any documents in response to Yasemin’s narrowed set of document
requests except for a handful of documents of their own choosing, as well as refused
to identify which additional documents they might be willing to produce (as the
Court instructed).
• Withheld Privileged Documents: As set forth in Yasemin’s recently filed motion
to compel (see NYSCEF Doc. No. 951-960), after deliberately slow-rolling the
production of thousands and thousands of previously withheld documents that were
wrongfully withheld as privileged, Defendants are still wrongfully withholding
more than 800 documents as privileged. Incredibly, this includes documents in
which Yasemin or Zeynep were identified as recipients.
• Santander bank records: Defendants have consistently refused to produce the
relevant Santander bank records, during discovery. Nor have they done so in
response to Plaintiffs’ multiple books-and-records requests – notwithstanding
Billur’s promise in her affidavit that Defendants were “committed to provid[ing]
Yasemin and Zeynep access to all the books and records of the Company.”
(NYSCEF Doc. No. 654, para. 8.) On August 9, 2022, Yasemin subpoenaed
Santander to obtain those records directly – which Defendants moved to quash, a
motion that the Court denied. When Santander finally responded to the subpoena,
they only produced some (but not all) of those banking records. Thus, Yasemin
now must move to compel Santander to produce the balance of the missing
documents.
• Subpoenas to Phil Michaels and Allen Beck: Defendants’ counsel, Pryor
Cashman, advised Yasemin that they were accepting service of Yasemin’s
subpoenas to Michaels and Beck for documents and depositions. However, Pryor
Cashman responded to the subpoenas on October 27th by objecting to every single
document request and refusing to produce a single document. Pryor Cashman
recently represented to the Court that they would amend their responses and
objections to the subpoena – but instead, they mailed to Yasemin’s counsel the
same objections that they submitted on October 27th. Yasemin now must move to
compel the production of the subpoenaed documents.
• Missing Documents and Metadata: On November 15, 2022, and again on
December 5, 2022, in response to Yasemin’s request during Gonca Tekiner’s
(“Gonca’s”) deposition, Defendants produced a small selection of previously
withheld WhatsApp messages and texts that addressed key, critical issues in the
case – with no explanation as to why these documents were being produced this
late in the case. This was contrary to a prior representation from Norton Rose in
September 2021 that Defendants had already completed their electronic production.
Nor have Defendants produced the metadata from these extremely late productions.
• Re-Deposition of the Individual Defendants: On October 27, 2022, the Court
advised that Plaintiffs had the right to re-depose the individual defendants – and
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rejected Defendants’ attempt to place an “arbitrary limit” upon the length of those
depositions. Further, the Court advised that if it was “people to whom this health-
related discovery is relevant, then you should probably hold off until that is finished
as well.” In response, Defendants have offered only Berrin and Gonca for three-
hour depositions on December 27th (even though Defendants have not nearly
finished their mental health-related discovery), and are refusing to reproduce Billur
for her deposition – even though many of the thousands of documents that
Defendants previously withheld as privileged and only produced in
September/October 22 involved Billur.
• Motion to compel Paul Schwartzman to respond to Yasemin’s subpoena: On
August 17, 2022, the Court denied Defendants’ motion to quash Yasemin’s
subpoena to Schwartzman for documents and a deposition. Plaintiffs thereafter
diligently pursued Schwartzman to comply with that subpoena – and for a period
of time, Schwartzman was initially cooperative and even offered to make himself
available for deposition. Schwartzman thereafter stopped cooperating entirely, and
Yasemin needs to file a motion to compel.
• Motion to compel Goldberg Weprin Finkel Goldstein LLP (“Goldberg
Weprin”) to respond to Yasemin’s subpoena: Yasemin served a properly
noticed document subpoena upon Goldberg Weprin, to which neither Defendants
nor Goldberg Weprin objected. Despite multiple follow-ups by Yasemin (both
telephonic and written), however, Goldberg Weprin has refused to comply with the
subpoena –and Yasemin may have to file a motion to compel.
• Motion to compel Christina Trust to respond to Yasemin’s subpoena: Yasemin
served a properly noticed subpoena upon Christina Trust – i.e., the corporate trustee
for both Yasemin’s and Zeynep’s 2011 trusts – for documents and a deposition, to
which neither Christina Trust nor Defendants objected. Christina Trust responded
to the subpoena by producing documents, but have not yet produced any e-mails –
and Yasemin may have to file a motion to compel.
• Deposition of Sadan Gurbuzturk (i.e., the Company’s bookkeeper): Yasemin
duly noticed a deposition of Sadan, but Defendants simply refused to produce her.
Instead, they purported to replace Sadan with defendant Gonca pursuant to CPLR
3106(d). During Gonca’s deposition, however, it became quickly evident that
Gonca had no knowledge about how the Company keeps its books – in fact, she
testified that she was not even aware of this purported substitution. Yasemin re-
noticed the deposition of Sadan and Defendants have thus far failed to provide her
availability.
Simply put, Defendants have acted throughout discovery in utter bad faith. Consequently,
critical discovery is outstanding. Allowing this case to proceed to trial without permitting
Plaintiffs access to this critical discovery would be patently unfair and would reward Defendants
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for their refusals to engage in good faith discovery. This is especially the case where Defendants:
(1) failed to produce documents from social media accounts deleted during the pendency of this
litigation; and (2) failed to produce complete bank records, and the few that were produced showed
diversions of funds exceeding $3 million in violation of multiple representations to the contrary.
Plaintiffs therefore request that the Court grant Plaintiffs leave to take post-Note of Issue
discovery, grant Plaintiffs’ pending discovery motions, grant a negative inference, or,
alternatively, grant Plaintiffs’ request for a case management conference and/or to appoint a
special discovery master to conclude the open discovery issues.
FACTUAL BACKGROUND
Plaintiff Yasemin filed her Complaint on January 3, 2021. (NYSCEF Doc. No. 2.)
Yasemin immediately moved to bar Defendants from firing Yasemin and from using company
funds to pay legal fees. (NYSCEF Doc. No. 11.) Defendants’ then counsel, Norton Rose, told the
Court that there had been no request for indemnity at that time. (NYSCEF Doc. No. 21, at 23.)
Counsel even suggested that no money had flowed out of the company to pay legal fees. (See
NYSCEF Doc. No. 97, at 39.)
Defendants also said that the parties did not really need discovery because they would give
Yasemin the company records she had asked to inspect before filing this case. Despite this
promise, Defendants fought nearly every discovery request for the next year and a half. As
examples of this conduct, Defendants withheld, on privilege grounds, more than 10,000 documents
that were never privileged to begin with. (See NYSCEF Doc. No. 379.) In breach of the
controlling ESI Protocol, Defendants failed to search and produce responsive communications
located on Defendants’ iCloud storage systems. When confronted with this blatant failure,
Defendants obfuscated and tried to foist the costs of such production onto Plaintiffs.
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At one point Defendants claimed that Berrin “did not send or receive many text messages;”
Plaintiffs understood that to be demonstrably untrue. And it was not until after the depositions of
Zeynep and Billur and long after Defendants’ former counsel Norton Rose represented that all
reasonably accessible ESI had already been produced that Defendants produced highly relevant
WhatsApp messages – including a message where Gonca complains about being fired and Berrin
instructs Billur to threaten Gonca with revoking her irrevocable trust. Troublingly, each time
Plaintiffs were able to probe more deeply into discovery, Plaintiffs kept uncovering more evidence
that had not been disclosed.
In April 2022, after Zeynep had joined the case as co-plaintiff, the Court reinstated
Yasemin as a director and officer. (NYSCEF Doc. No. 353.) Accordingly, Zeynep and Yasemin
promptly asked for a board meeting. Under Section 3.11 of the Bylaws, two board members can
compel a board meeting. (NYSCEF Doc. No. 31-32.) But the Defendants refused to hold the
requested board meeting – and they still have not done so, some eight months later.
In July 2022, Pryor Cashman entered the case as Defendants’ counsel. Plaintiffs hoped
they would get the requested board meeting and that new counsel would disclose the requested
discovery. None of that happened, despite Defendants’ promises. Counsel asked for a 120-day
extension of the discovery deadline, but the Court denied that request.
After months of Defendants’ noncompliance, this Court’s so-ordered Stipulation Setting
Revised Discovery Deadlines was entered on August 1, 2022 providing: (1) the deadline to
complete fact discovery was scheduled for October 17, 2022; (2) the deadline for CPLR 3101(d)
expert disclosure was scheduled for November 15, 2022 (since extended to December 15, 2022);
(3) the end date for all discovery was scheduled for December 27, 2022; (4) the deadline to file
the note of issue was scheduled for December 28, 2022; and (5) the deadline for filing dispositive
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motions was scheduled for January 27, 2023. (NYSCEF Doc. No. 659.) Still, Defendants defied
the Court’s orders and did nothing.
On October 5, 2022, Yasemin and co-plaintiff Zeynep Tekiner (“Zeynep”) moved by order
to show cause to appoint a special discovery master and to compel Defendants to comply with this
Court’s prior orders. (See NYSCEF Doc. No. 754.) On December 6, 2022, this Court issued an
order denying the request to appoint a special discovery master but granting the request to compel
Defendants to comply with this Court’s prior orders. (NYSCEF Doc. No. 888.)
In early November 2022, Plaintiffs deposed Gonca and Berrin. Numerous supposedly
privileged documents were produced during and after those depositions. Gonca admitted deleting
her WhatsApp and LinikedIn accounts during this litigation and failing to search for them.
On November 15, 2022 and again on December 5, 2022, Defendants produced a series of
highly relevant texts and WhatsApp messages that were between, among others, Berrin, Gonca,
and Billur. Defendants offered no explanation for why these key documents were not produced
much earlier in the case or their failure to produce others.
In the meantime, the parties held two telephonic conferences with the Court on November
7 and December 5, 2022, which culminated in Plaintiffs’ two recently filed motions to compel
addressing the Court’s specific suggestions. Unfortunately, there are still numerous outstanding
discovery issues that relate to this Court’s prior orders (and otherwise). At the December 19, 2022
hearing, the Court granted Plaintiffs leave to file this Motion for leave to take post-Note of Issue
discovery.
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ARGUMENT
I. THIS COURT SHOULD GRANT PLAINTIFFS’ REQUEST FOR LEAVE TO
TAKE POST-NOTE OF ISSUE DISCOVERY
A. Legal Standard
“Trial courts are authorized, as a matter of discretion, to permit post-note of issue
discovery without vacating the note of issue, so long as neither party will be prejudiced.” Cuprill
v. Citywide Towing & Auto Repair Servs., 149 A.D.3d 442 ,442 (1st Dep’t 2017). Post-note of
issued discovery is appropriate where, as here, a party “would be prejudiced if additional
discovery was not granted.” Valencia v. City of New York, 188 A.D.3d 549, 549 (1st Dep’t
2020); see also Hickey v. City of New York, 159 A.D.3d 511, 511 (1st Dep’t 2018).
B. Post-Note of Issue Discovery Is Critical
As set forth below, there are many key discovery issues that remain, which are nearly
entirely based upon Defendants’ obstructionist behavior.
1. Defendants’ Refusal to Produce Any Documents Related to Berrin and
Gonca’s Medical Condition and History
On August 17, 2022, this Court overruled Defendants’ objections to all mental health
discovery, finding that such discovery was appropriate so long as it was conducted in a “narrow”
fashion (the “August 17th Order”). (See NYSCEF Doc. No. 680.) In response, Yasemin sent
Defendants a list of ten narrow document requests, but the parties were unable to reach an
agreement as to the scope of those requests to which Defendants would produce responsive
documents. (See NYSCEF Doc. No. 733.) Plaintiffs raised these issues in their October 5, 2022
order to show cause to appoint a special discovery master, and the Court held a conference on
October 27, 2022 to further address the issue. At the conference, the Court instructed Defendants
to identify what they were actually willing to produce. (NYSCEF Doc. No. 857, at 32-33.)
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Thereafter, Yasemin met-and-conferred with Defendants on November 7, 2022, and again on
November 10, 2022. Also on November 7, 2022, Defendants produced a limited number of mental
health documents that left many questions unanswered. They have produced nothing further since
that time, nor have they identified any additional documents that they are willing to produce
(despite the Court’s instruction).
On November 22 and 30, 2022, the parties exchanged Rule 14 letters regarding this issue,
and the Court held a telephonic conference on December 5, 2022. (See NYSCEF Doc. No. 887.)
During the conference, the Court invited Yasemin to file a motion to compel Defendants to provide
the requisite consent for the hospital subpoenas pursuant to CPLR 3122(a)(1). Plaintiffs filed a
motion to compel these documents on December 22, 2022 (NYSCEF Doc. No. 965).
2. Defendants’ Refusal to Timely Produce Previously Withheld Privileged
Documents
The August 17 Order also granted in part Yasemin’s motion to compel “to the extent that
Defendants’ categorical assertion of privilege with respect to corporate business-related
documents is overly broad.” (See NYSCEF Doc. No. 680.) Defendants, however, did not begin
their “rolling production” of 9,539 documents previously withheld as privileged until September
23, 2022 – more than five weeks after they were ordered to do so. This production (which
Defendants did not complete until October 18, 2022, eight weeks after the Court’s order) included
key, critical documents produced during and after the depositions of the parties in mid-October.
(See NYSCEF Doc. No. 952, 954.)
After Defendants finally completed this belated production, Defendants sent Yasemin an
amended privilege log that reflected that Defendants were stillwithholding more than 1,000
documents as privileged. On November 22 and 30, 2022, the parties exchanged Rule 14 letters
regarding this issue, and the Court held a telephonic conference on December 5, 2022 to address
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this (and other outstanding discovery issues). At the conference, this Court instructed Yasemin to
identify for Defendants which of the e-mails/documents from Defendants’ amended privilege log
Yasemin believed were being wrongfully withheld as privileged.
On December 13, 2022, Yasemin identified for Defendants more than 800 documents that
Yasemin believes Defendants are still wrongfully withholding as privileged, including: (1) emails
and/or attachments where Yasemin and/or Zeynep are listed as recipients; (2) emails and/or
attachments with Norton Rose; (3) emails and/or attachments among non-attorneys; (4) emails
and/or attachments from Billur Akipek regarding either the trusts or Yasemin’s position within the
company; (5) emails and/or attachments for which there were insufficient information for inclusion
in the amended privilege log (recipients of texts are not listed); and (6) emails and/or attachments
sent while Yasemin was a director and officer (i.e., before she was wrongfully terminated by
Defendants). Defendants did not respond, forcing Plaintiffs to file a motion to compel on
December 21, 2022. (NYSCEF Doc. No. 951-960). 2
3. Defendants’ Refusal to Produce Bank Records
Defendants have refused to produce reports from their accounting system, which are easy
to run and could have shed light on Plaintiffs’ claims of malfeasance and self-dealing. Given this
outright refusal, Defendants’ bank records became even more critical yet were not produced
despite multiple request. On August 9, 2022, Yasemin issued a subpoena to Santander Bank, N.A.
for certain relevant banking documents. Santander did not object to the subpoena, but on
September 16, 2022, Defendants moved to quash it.
2
In the late evening of December 23, Defendants responded to Yasemin’s December 13th e-mail, but Plaintiffs have
not had the opportunity to review this response in any detail.
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On October 5, 2022 – and only several hours after Plaintiffs filed their Order to Show
Cause to Appoint a Special Discovery Master – Billur provided to Yasemin as part of Plaintiffs’
“books and records” request a limited and heavily redacted set of Santander bank statements from
a single Company account, not as part of the discovery process, but during corporate record
inspection. Those documents were startling. They showed $3 million dollars of diverted funds.
For example, last Spring Defendants wanted to sell the Company’s Tanglewylde house in
Bronxville. Plaintiffs had no objection to the sale. They simply wanted to know how Defendants
intended to use the sale proceeds. Plaintiffs tried to notice a board meeting and again, could not
get one. On July 1, 2022, Defendant’s counsel from Norton Rose represented to the Court that the
Tanglewylde proceeds were not going to the Individual Defendants, either “directly or indirectly.”
(See NYSCEF Doc. No. 657, at 26.) But $1 million dollars had already been transferred to Berrin.
(See NYSCEF Doc. No. 806, 813.) The very next week, Norton Rose resigned from this case.
Subsequently, Pryor Cashman made multiple representations that: (a) Defendants would include
Plaintiffs on all e-mails that relate to (1) operations of the Company for any material events, and/or
(2) significant matters regarding property sales; (b) “material events” were those that exceeded
$50,000: and (c) nothing other than operational expenses will go out of the Company from the
Tanglewylde proceeds. (See NYSCEF Doc. No. 834.) This was false.
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FILED: NEW YORK COUNTY CLERK 12/24/2022 01:09 PM INDEX NO. 657193/2020 NYSCEF DOC. NO. 979 RECEIVED NYSCEF: 12/24/2022 SUPREME COURT OF THE STATE OF NEW YORK COMMERCIAL DIVISION: NEW YORK COUNTY -------------------------------------------------------------- x 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 : Commercial Division Part 3 of the Company Defendants, : Plaintiff, : Hon. Joel M. Cohen, J.S.C. : - against – : Motion Seq. No. : BREMEN HOUSE INC., GERMAN NEWS : COMPANY, INC., BERRIN TEKINER, GONCA : TEKINER, and BILLUR AKIPEK, in her capacity : as a Trustee of The Yasemin Tekiner 2011 : Descendants Trust, : Defendants. : -------------------------------------------------------------- x ZEYNEP TEKINER, : : in her individual capacity, as a : beneficiary and a Trustee of The Zeynep : Tekiner 2011 Descendants Trust and : derivatively as a holder of equitable : interests in a shareholder or a member of : the Company Defendants, : : Intervenor-Plaintiff, : : - : against- : : BREMEN HOUSE INC., GERMAN NEWS : COMPANY, INC., BERRIN TEKINER, GONCA : TEKINER, and BILLUR AKIPEK, in her capacity : as a Trustee of The Zeynep Tekiner 2011 : Descendants Trust, : : Defendants. : -------------------------------------------------------------- x 1 of 30 FILED: NEW YORK COUNTY CLERK 12/24/2022 01:09 PM INDEX NO. 657193/2020 NYSCEF DOC. NO. 979 RECEIVED NYSCEF: 12/24/2022 MEMORANDUM OF LAW OF PLAINTIFFS, YASEMIN TEKINER AND ZEYNEP TEKINER, IN SUPPORT OF THEIR ORDER TO SHOW CAUSE FOR LEAVE TO TAKE POST-NOTE OF ISSUE DISCOVERY AND, ALTERNATIVELY, FOR A CASE MANAGEMENT CONFERENCE AND/OR TO APPOINT A SPECIAL DISCOVERY MASTER Stephen P. Younger Michele Kahn FOLEY HOAG LLP KAHN & GOLDBERG, LLP 1301 Avenue of the Americas 555 Fifth Avenue, 14th Floor 25th Floor New York, New York 10017 New York, NY 10019 Telephone: (212) 687-5066 (212) 812-0365 mk@kahngoldberg.com spyounger@foleyhoag.com Attorneys for Plaintiff Yasemin Tekiner Attorneys for Plaintiff Zeynep Tekiner 2 of 30 FILED: NEW YORK COUNTY CLERK 12/24/2022 01:09 PM INDEX NO. 657193/2020 NYSCEF DOC. NO. 979 RECEIVED NYSCEF: 12/24/2022 TABLE OF CONTENTS PRELIMINARY STATEMENT .................................................................................................... 1 FACTUAL BACKGROUND ......................................................................................................... 5 ARGUMENT .................................................................................................................................. 8 I. THIS COURT SHOULD GRANT PLAINTIFFS’ REQUEST FOR LEAVE TO TAKE POST-NOTE OF ISSUE DISCOVERY ..................................................................................... 8 A. Legal Standard .............................................................................................................. 8 B. Post-Note of Issue Discovery Is Critical ...................................................................... 8 C. Extension of Expert Disclosure .................................................................................. 20 D. Granting of Negative Inference .................................................................................. 21 II. ALTERNATIVELY, THIS COURT SHOULD APPOINT A SPECIAL DISCOVERY MASTER TO MANAGE DISCOVERY PURSUANT TO CPLR 3104 .................. 21 A. Standard of Review .................................................................................................... 21 B. Defendants’ Refusal to Engage in Meaningful and Good Faith Discovery Warrants the Appointment of a Special Discovery Master .................................................................. 22 CONCLUSION ............................................................................................................................. 23 i 3 of 30 FILED: NEW YORK COUNTY CLERK 12/24/2022 01:09 PM INDEX NO. 657193/2020 NYSCEF DOC. NO. 979 RECEIVED NYSCEF: 12/24/2022 TABLE OF AUTHORITIES Cases Baker v General Mills Fun Grp., Inc., 101 Misc. 2d 193 [Sup Ct, NY County 1979]................. 21 Cadlerock Joint Venture, L.P. v Sol Greenberg &Sons Int’l, Inc., 94 AD3d 580 [1st Dept 2012] ......................................................................................................................... 21 Capoccia v Brognano, 126 AD2d 323 [3d Dept 1987] ................................................................ 21 cf. Hindlin v. Prescription Songs LLC, Index No. 651974/2018 (Oct. 6, 2020) (Masley, J.) ...... 21 Cuprill v. Citywide Towing & Auto Repair Servs., 149 A.D.3d 442 (1st Dep’t 2017).................. 8 Hickey v. City of New York, 159 A.D.3d 511 (1st Dep’t 2018) ...................................................... 8 Kogan v Royal Indem. Co., 179 AD2d 399 (1st Dept 1992) ........................................................ 21 Lowitt v Korelitz, 152 AD2d 506 [1st Dept 1989] ........................................................................ 21 O’Neill v Ho, 28 AD3d 626 [2d Dept 2006]................................................................................. 21 Parker v Ollivierre, 60 AD3d 1023 [2d Dept 2009]..................................................................... 21 Valencia v. City of New York, 188 A.D.3d 549 (1st Dep’t 2020) ................................................... 8 Vasile v Chisena, 272 AD2d 610 [2d Dept 2000] ........................................................................ 21 Voom HD Hoildings LLC v. Echostar Staellite L.L.C., 93 A.D.3d 33 (1st Dep’t 2012) .............. 21 Rules 22 N.Y.C.R.R. 202.21(d) ................................................................................................................ 1 CPLR 3104................................................................................................................................ 1, 21 CPLR 4201.................................................................................................................................... 21 CPLR 4212.................................................................................................................................... 21 ii 4 of 30 FILED: NEW YORK COUNTY CLERK 12/24/2022 01:09 PM INDEX NO. 657193/2020 NYSCEF DOC. NO. 979 RECEIVED NYSCEF: 12/24/2022 Treatises A Carmody-Wait 2d § 42:639....................................................................................................... 21 Other Authorities Maryann C. Stallone, Private Judging: What Is It, and How Can It Help to Advance Your Case?, 27 NYSBA Commercial and Federal Litigation Section Newsletter 2 (2021) ......................... 22 iii 5 of 30 FILED: NEW YORK COUNTY CLERK 12/24/2022 01:09 PM INDEX NO. 657193/2020 NYSCEF DOC. NO. 979 RECEIVED NYSCEF: 12/24/2022 Plaintiffs, Yasemin Tekiner (“Yasemin”) and Zeynep Tekiner (“Zeynep”) (collectively, “Plaintiffs”), respectfully submit this memorandum of law in support of their Order to Show Cause (the “OTSC”), for: (1) leave to take post-Note of Issue discovery pursuant to 22 N.Y.C.R.R. 202.21(d); (2) granting a negative inference; and, alternatively, (3) for a case management conference and/or to appoint a special discovery master, pursuant to CPLR 3104. 1 PRELIMINARY STATEMENT Plaintiffs principally request that this Court: compel Defendants to comply with their discovery obligations and the Court’s prior Orders, grant Plaintiffs’ pending discovery motions, grant a negative inference, and grant Plaintiffs leave to take post-Note of Issue discovery to prevent substantial prejudice to Plaintiffs due to Defendants’ persistent failures to engage in good faith discovery. As set forth in Plaintiffs’ Memorandum of Law in Support of Their Order to Show Cause to Compel Compliance with Discovery Order and Appoint a Special Discovery Master (see NYSCEF Doc. No. 754), when Defendants’ new counsel joined this case on July 8, 2022, they asked the Court for an extremely long stay of all proceedings. The Court denied their request. Thereafter, instead of engaging in good faith discovery, Defendants continuously delayed complying with their discovery obligations and at least two Court Orders. For example, on August 17, 2022, the Court granted, in part Plaintiff Yasemin’s motion to compel documents Defendants had previously withheld as privileged “to the extent that Defendants’ categorical assertion of privilege with respect to corporate business-related documents is overly broad…” (NYSCEF Doc. No. 680.) The Court also granted, in part, Plaintiff’s motion to compel discovery relating to 1 Plaintiffs hereby incorporate by reference their motions, orders to show cause, and accompanying briefing and exhibits filed on October 5, 2022 (NYSCEF Doc. No. 726-754), October 24, 2022 (NYSCEF Doc. No. 805-814, 816- 839), December 21, 2022 (NYSCEF Doc. No. 952-960), and December 22, 2022 (NYSCEF Doc. No. 965-968). 1 6 of 30 FILED: NEW YORK COUNTY CLERK 12/24/2022 01:09 PM INDEX NO. 657193/2020 NYSCEF DOC. NO. 979 RECEIVED NYSCEF: 12/24/2022 Defendants’ medical condition, history, and records, and ordered the parties to “carefully and narrowly tailor their proposed discovery” relating to these subjects. (Id.) Defendants failed to promptly produce the documents they claimed were privileged—the vast majority of which were never privileged. Instead, Defendants produced numerous documents during and after party depositions, which were held during the last week of the previous discovery period. (See Younger Aff., Ex. A.) In addition, Defendants refused outright to produce any mental health and medical documentation, despite having been ordered to do so. Defendants had repeatedly refused to schedule party depositions until the last week of discovery, and then tried to jam all of the depositions together with third-party depositions in a single week. This was obviously unworkable. And, Defendants repeatedly refused to produce critical bank records. As a result of all of this, Plaintiffs moved to appoint a special discovery master on October 5, 2022. (NYSCEF Doc. No. 754.) Immediately after that motion was made, Defendants turned over—not in discovery, but as part of a much-delayed corporate records inspection—highly selective and redacted bank records from a single Santander bank account. Even those minimal banking records were highly revealing, showing at least $3 million dollars that Berrin wrongly diverted from Company coffers to herself. Plaintiffs only recently received additional bank records in response to Yasemin’s subpoena to Santander, and are still awaiting from Santander the entirety of the requested production. Many key discovery issues remain, despite Plaintiffs’ best efforts to secure Defendants’ compliance: • Withheld Mental Health and Substance Abuse Documents: As set forth in Yasemin’s recently filed motion to compel (see NYSCEF Doc. No. 965-968), 2 7 of 30 FILED: NEW YORK COUNTY CLERK 12/24/2022 01:09 PM INDEX NO. 657193/2020 NYSCEF DOC. NO. 979 RECEIVED NYSCEF: 12/24/2022 Defendants have refused to consent to any hospital subpoenas. They have refused to produce any documents in response to Yasemin’s narrowed set of document requests except for a handful of documents of their own choosing, as well as refused to identify which additional documents they might be willing to produce (as the Court instructed). • Withheld Privileged Documents: As set forth in Yasemin’s recently filed motion to compel (see NYSCEF Doc. No. 951-960), after deliberately slow-rolling the production of thousands and thousands of previously withheld documents that were wrongfully withheld as privileged, Defendants are still wrongfully withholding more than 800 documents as privileged. Incredibly, this includes documents in which Yasemin or Zeynep were identified as recipients. • Santander bank records: Defendants have consistently refused to produce the relevant Santander bank records, during discovery. Nor have they done so in response to Plaintiffs’ multiple books-and-records requests – notwithstanding Billur’s promise in her affidavit that Defendants were “committed to provid[ing] Yasemin and Zeynep access to all the books and records of the Company.” (NYSCEF Doc. No. 654, para. 8.) On August 9, 2022, Yasemin subpoenaed Santander to obtain those records directly – which Defendants moved to quash, a motion that the Court denied. When Santander finally responded to the subpoena, they only produced some (but not all) of those banking records. Thus, Yasemin now must move to compel Santander to produce the balance of the missing documents. • Subpoenas to Phil Michaels and Allen Beck: Defendants’ counsel, Pryor Cashman, advised Yasemin that they were accepting service of Yasemin’s subpoenas to Michaels and Beck for documents and depositions. However, Pryor Cashman responded to the subpoenas on October 27th by objecting to every single document request and refusing to produce a single document. Pryor Cashman recently represented to the Court that they would amend their responses and objections to the subpoena – but instead, they mailed to Yasemin’s counsel the same objections that they submitted on October 27th. Yasemin now must move to compel the production of the subpoenaed documents. • Missing Documents and Metadata: On November 15, 2022, and again on December 5, 2022, in response to Yasemin’s request during Gonca Tekiner’s (“Gonca’s”) deposition, Defendants produced a small selection of previously withheld WhatsApp messages and texts that addressed key, critical issues in the case – with no explanation as to why these documents were being produced this late in the case. This was contrary to a prior representation from Norton Rose in September 2021 that Defendants had already completed their electronic production. Nor have Defendants produced the metadata from these extremely late productions. • Re-Deposition of the Individual Defendants: On October 27, 2022, the Court advised that Plaintiffs had the right to re-depose the individual defendants – and 3 8 of 30 FILED: NEW YORK COUNTY CLERK 12/24/2022 01:09 PM INDEX NO. 657193/2020 NYSCEF DOC. NO. 979 RECEIVED NYSCEF: 12/24/2022 rejected Defendants’ attempt to place an “arbitrary limit” upon the length of those depositions. Further, the Court advised that if it was “people to whom this health- related discovery is relevant, then you should probably hold off until that is finished as well.” In response, Defendants have offered only Berrin and Gonca for three- hour depositions on December 27th (even though Defendants have not nearly finished their mental health-related discovery), and are refusing to reproduce Billur for her deposition – even though many of the thousands of documents that Defendants previously withheld as privileged and only produced in September/October 22 involved Billur. • Motion to compel Paul Schwartzman to respond to Yasemin’s subpoena: On August 17, 2022, the Court denied Defendants’ motion to quash Yasemin’s subpoena to Schwartzman for documents and a deposition. Plaintiffs thereafter diligently pursued Schwartzman to comply with that subpoena – and for a period of time, Schwartzman was initially cooperative and even offered to make himself available for deposition. Schwartzman thereafter stopped cooperating entirely, and Yasemin needs to file a motion to compel. • Motion to compel Goldberg Weprin Finkel Goldstein LLP (“Goldberg Weprin”) to respond to Yasemin’s subpoena: Yasemin served a properly noticed document subpoena upon Goldberg Weprin, to which neither Defendants nor Goldberg Weprin objected. Despite multiple follow-ups by Yasemin (both telephonic and written), however, Goldberg Weprin has refused to comply with the subpoena –and Yasemin may have to file a motion to compel. • Motion to compel Christina Trust to respond to Yasemin’s subpoena: Yasemin served a properly noticed subpoena upon Christina Trust – i.e., the corporate trustee for both Yasemin’s and Zeynep’s 2011 trusts – for documents and a deposition, to which neither Christina Trust nor Defendants objected. Christina Trust responded to the subpoena by producing documents, but have not yet produced any e-mails – and Yasemin may have to file a motion to compel. • Deposition of Sadan Gurbuzturk (i.e., the Company’s bookkeeper): Yasemin duly noticed a deposition of Sadan, but Defendants simply refused to produce her. Instead, they purported to replace Sadan with defendant Gonca pursuant to CPLR 3106(d). During Gonca’s deposition, however, it became quickly evident that Gonca had no knowledge about how the Company keeps its books – in fact, she testified that she was not even aware of this purported substitution. Yasemin re- noticed the deposition of Sadan and Defendants have thus far failed to provide her availability. Simply put, Defendants have acted throughout discovery in utter bad faith. Consequently, critical discovery is outstanding. Allowing this case to proceed to trial without permitting Plaintiffs access to this critical discovery would be patently unfair and would reward Defendants 4 9 of 30 FILED: NEW YORK COUNTY CLERK 12/24/2022 01:09 PM INDEX NO. 657193/2020 NYSCEF DOC. NO. 979 RECEIVED NYSCEF: 12/24/2022 for their refusals to engage in good faith discovery. This is especially the case where Defendants: (1) failed to produce documents from social media accounts deleted during the pendency of this litigation; and (2) failed to produce complete bank records, and the few that were produced showed diversions of funds exceeding $3 million in violation of multiple representations to the contrary. Plaintiffs therefore request that the Court grant Plaintiffs leave to take post-Note of Issue discovery, grant Plaintiffs’ pending discovery motions, grant a negative inference, or, alternatively, grant Plaintiffs’ request for a case management conference and/or to appoint a special discovery master to conclude the open discovery issues. FACTUAL BACKGROUND Plaintiff Yasemin filed her Complaint on January 3, 2021. (NYSCEF Doc. No. 2.) Yasemin immediately moved to bar Defendants from firing Yasemin and from using company funds to pay legal fees. (NYSCEF Doc. No. 11.) Defendants’ then counsel, Norton Rose, told the Court that there had been no request for indemnity at that time. (NYSCEF Doc. No. 21, at 23.) Counsel even suggested that no money had flowed out of the company to pay legal fees. (See NYSCEF Doc. No. 97, at 39.) Defendants also said that the parties did not really need discovery because they would give Yasemin the company records she had asked to inspect before filing this case. Despite this promise, Defendants fought nearly every discovery request for the next year and a half. As examples of this conduct, Defendants withheld, on privilege grounds, more than 10,000 documents that were never privileged to begin with. (See NYSCEF Doc. No. 379.) In breach of the controlling ESI Protocol, Defendants failed to search and produce responsive communications located on Defendants’ iCloud storage systems. When confronted with this blatant failure, Defendants obfuscated and tried to foist the costs of such production onto Plaintiffs. 5 10 of 30 FILED: NEW YORK COUNTY CLERK 12/24/2022 01:09 PM INDEX NO. 657193/2020 NYSCEF DOC. NO. 979 RECEIVED NYSCEF: 12/24/2022 At one point Defendants claimed that Berrin “did not send or receive many text messages;” Plaintiffs understood that to be demonstrably untrue. And it was not until after the depositions of Zeynep and Billur and long after Defendants’ former counsel Norton Rose represented that all reasonably accessible ESI had already been produced that Defendants produced highly relevant WhatsApp messages – including a message where Gonca complains about being fired and Berrin instructs Billur to threaten Gonca with revoking her irrevocable trust. Troublingly, each time Plaintiffs were able to probe more deeply into discovery, Plaintiffs kept uncovering more evidence that had not been disclosed. In April 2022, after Zeynep had joined the case as co-plaintiff, the Court reinstated Yasemin as a director and officer. (NYSCEF Doc. No. 353.) Accordingly, Zeynep and Yasemin promptly asked for a board meeting. Under Section 3.11 of the Bylaws, two board members can compel a board meeting. (NYSCEF Doc. No. 31-32.) But the Defendants refused to hold the requested board meeting – and they still have not done so, some eight months later. In July 2022, Pryor Cashman entered the case as Defendants’ counsel. Plaintiffs hoped they would get the requested board meeting and that new counsel would disclose the requested discovery. None of that happened, despite Defendants’ promises. Counsel asked for a 120-day extension of the discovery deadline, but the Court denied that request. After months of Defendants’ noncompliance, this Court’s so-ordered Stipulation Setting Revised Discovery Deadlines was entered on August 1, 2022 providing: (1) the deadline to complete fact discovery was scheduled for October 17, 2022; (2) the deadline for CPLR 3101(d) expert disclosure was scheduled for November 15, 2022 (since extended to December 15, 2022); (3) the end date for all discovery was scheduled for December 27, 2022; (4) the deadline to file the note of issue was scheduled for December 28, 2022; and (5) the deadline for filing dispositive 6 11 of 30 FILED: NEW YORK COUNTY CLERK 12/24/2022 01:09 PM INDEX NO. 657193/2020 NYSCEF DOC. NO. 979 RECEIVED NYSCEF: 12/24/2022 motions was scheduled for January 27, 2023. (NYSCEF Doc. No. 659.) Still, Defendants defied the Court’s orders and did nothing. On October 5, 2022, Yasemin and co-plaintiff Zeynep Tekiner (“Zeynep”) moved by order to show cause to appoint a special discovery master and to compel Defendants to comply with this Court’s prior orders. (See NYSCEF Doc. No. 754.) On December 6, 2022, this Court issued an order denying the request to appoint a special discovery master but granting the request to compel Defendants to comply with this Court’s prior orders. (NYSCEF Doc. No. 888.) In early November 2022, Plaintiffs deposed Gonca and Berrin. Numerous supposedly privileged documents were produced during and after those depositions. Gonca admitted deleting her WhatsApp and LinikedIn accounts during this litigation and failing to search for them. On November 15, 2022 and again on December 5, 2022, Defendants produced a series of highly relevant texts and WhatsApp messages that were between, among others, Berrin, Gonca, and Billur. Defendants offered no explanation for why these key documents were not produced much earlier in the case or their failure to produce others. In the meantime, the parties held two telephonic conferences with the Court on November 7 and December 5, 2022, which culminated in Plaintiffs’ two recently filed motions to compel addressing the Court’s specific suggestions. Unfortunately, there are still numerous outstanding discovery issues that relate to this Court’s prior orders (and otherwise). At the December 19, 2022 hearing, the Court granted Plaintiffs leave to file this Motion for leave to take post-Note of Issue discovery. 7 12 of 30 FILED: NEW YORK COUNTY CLERK 12/24/2022 01:09 PM INDEX NO. 657193/2020 NYSCEF DOC. NO. 979 RECEIVED NYSCEF: 12/24/2022 ARGUMENT I. THIS COURT SHOULD GRANT PLAINTIFFS’ REQUEST FOR LEAVE TO TAKE POST-NOTE OF ISSUE DISCOVERY A. Legal Standard “Trial courts are authorized, as a matter of discretion, to permit post-note of issue discovery without vacating the note of issue, so long as neither party will be prejudiced.” Cuprill v. Citywide Towing & Auto Repair Servs., 149 A.D.3d 442 ,442 (1st Dep’t 2017). Post-note of issued discovery is appropriate where, as here, a party “would be prejudiced if additional discovery was not granted.” Valencia v. City of New York, 188 A.D.3d 549, 549 (1st Dep’t 2020); see also Hickey v. City of New York, 159 A.D.3d 511, 511 (1st Dep’t 2018). B. Post-Note of Issue Discovery Is Critical As set forth below, there are many key discovery issues that remain, which are nearly entirely based upon Defendants’ obstructionist behavior. 1. Defendants’ Refusal to Produce Any Documents Related to Berrin and Gonca’s Medical Condition and History On August 17, 2022, this Court overruled Defendants’ objections to all mental health discovery, finding that such discovery was appropriate so long as it was conducted in a “narrow” fashion (the “August 17th Order”). (See NYSCEF Doc. No. 680.) In response, Yasemin sent Defendants a list of ten narrow document requests, but the parties were unable to reach an agreement as to the scope of those requests to which Defendants would produce responsive documents. (See NYSCEF Doc. No. 733.) Plaintiffs raised these issues in their October 5, 2022 order to show cause to appoint a special discovery master, and the Court held a conference on October 27, 2022 to further address the issue. At the conference, the Court instructed Defendants to identify what they were actually willing to produce. (NYSCEF Doc. No. 857, at 32-33.) 8 13 of 30 FILED: NEW YORK COUNTY CLERK 12/24/2022 01:09 PM INDEX NO. 657193/2020 NYSCEF DOC. NO. 979 RECEIVED NYSCEF: 12/24/2022 Thereafter, Yasemin met-and-conferred with Defendants on November 7, 2022, and again on November 10, 2022. Also on November 7, 2022, Defendants produced a limited number of mental health documents that left many questions unanswered. They have produced nothing further since that time, nor have they identified any additional documents that they are willing to produce (despite the Court’s instruction). On November 22 and 30, 2022, the parties exchanged Rule 14 letters regarding this issue, and the Court held a telephonic conference on December 5, 2022. (See NYSCEF Doc. No. 887.) During the conference, the Court invited Yasemin to file a motion to compel Defendants to provide the requisite consent for the hospital subpoenas pursuant to CPLR 3122(a)(1). Plaintiffs filed a motion to compel these documents on December 22, 2022 (NYSCEF Doc. No. 965). 2. Defendants’ Refusal to Timely Produce Previously Withheld Privileged Documents The August 17 Order also granted in part Yasemin’s motion to compel “to the extent that Defendants’ categorical assertion of privilege with respect to corporate business-related documents is overly broad.” (See NYSCEF Doc. No. 680.) Defendants, however, did not begin their “rolling production” of 9,539 documents previously withheld as privileged until September 23, 2022 – more than five weeks after they were ordered to do so. This production (which Defendants did not complete until October 18, 2022, eight weeks after the Court’s order) included key, critical documents produced during and after the depositions of the parties in mid-October. (See NYSCEF Doc. No. 952, 954.) After Defendants finally completed this belated production, Defendants sent Yasemin an amended privilege log that reflected that Defendants were stillwithholding more than 1,000 documents as privileged. On November 22 and 30, 2022, the parties exchanged Rule 14 letters regarding this issue, and the Court held a telephonic conference on December 5, 2022 to address 9 14 of 30 FILED: NEW YORK COUNTY CLERK 12/24/2022 01:09 PM INDEX NO. 657193/2020 NYSCEF DOC. NO. 979 RECEIVED NYSCEF: 12/24/2022 this (and other outstanding discovery issues). At the conference, this Court instructed Yasemin to identify for Defendants which of the e-mails/documents from Defendants’ amended privilege log Yasemin believed were being wrongfully withheld as privileged. On December 13, 2022, Yasemin identified for Defendants more than 800 documents that Yasemin believes Defendants are still wrongfully withholding as privileged, including: (1) emails and/or attachments where Yasemin and/or Zeynep are listed as recipients; (2) emails and/or attachments with Norton Rose; (3) emails and/or attachments among non-attorneys; (4) emails and/or attachments from Billur Akipek regarding either the trusts or Yasemin’s position within the company; (5) emails and/or attachments for which there were insufficient information for inclusion in the amended privilege log (recipients of texts are not listed); and (6) emails and/or attachments sent while Yasemin was a director and officer (i.e., before she was wrongfully terminated by Defendants). Defendants did not respond, forcing Plaintiffs to file a motion to compel on December 21, 2022. (NYSCEF Doc. No. 951-960). 2 3. Defendants’ Refusal to Produce Bank Records Defendants have refused to produce reports from their accounting system, which are easy to run and could have shed light on Plaintiffs’ claims of malfeasance and self-dealing. Given this outright refusal, Defendants’ bank records became even more critical yet were not produced despite multiple request. On August 9, 2022, Yasemin issued a subpoena to Santander Bank, N.A. for certain relevant banking documents. Santander did not object to the subpoena, but on September 16, 2022, Defendants moved to quash it. 2 In the late evening of December 23, Defendants responded to Yasemin’s December 13th e-mail, but Plaintiffs have not had the opportunity to review this response in any detail. 10 15 of 30 FILED: NEW YORK COUNTY CLERK 12/24/2022 01:09 PM INDEX NO. 657193/2020 NYSCEF DOC. NO. 979 RECEIVED NYSCEF: 12/24/2022 On October 5, 2022 – and only several hours after Plaintiffs filed their Order to Show Cause to Appoint a Special Discovery Master – Billur provided to Yasemin as part of Plaintiffs’ “books and records” request a limited and heavily redacted set of Santander bank statements from a single Company account, not as part of the discovery process, but during corporate record inspection. Those documents were startling. They showed $3 million dollars of diverted funds. For example, last Spring Defendants wanted to sell the Company’s Tanglewylde house in Bronxville. Plaintiffs had no objection to the sale. They simply wanted to know how Defendants intended to use the sale proceeds. Plaintiffs tried to notice a board meeting and again, could not get one. On July 1, 2022, Defendant’s counsel from Norton Rose represented to the Court that the Tanglewylde proceeds were not going to the Individual Defendants, either “directly or indirectly.” (See NYSCEF Doc. No. 657, at 26.) But $1 million dollars had already been transferred to Berrin. (See NYSCEF Doc. No. 806, 813.) The very next week, Norton Rose resigned from this case. Subsequently, Pryor Cashman made multiple representations that: (a) Defendants would include Plaintiffs on all e-mails that relate to (1) operations of the Company for any material events, and/or (2) significant matters regarding property sales; (b) “material events” were those that exceeded $50,000: and (c) nothing other than operational expenses will go out of the Company from the Tanglewylde proceeds. (See NYSCEF Doc. No. 834.) This was false.