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  • Yasemin Tekiner in her individual capacity, as a beneficiary and a Trustee of The Yasemin Tekiner 2011 Descendants Trust and derivatively as a holder of equitable interests in a shareholder or a member of the Company Defendants v. Bremen House Inc., German News Company, Inc., Berrin Tekiner, Gonca Tekiner, Billur Akipek in her capacity as a Trustee of the Yasemin Tekiner 2011 Descendants Trust, Zeynep Tekiner (Intervenor Plaintiff)Commercial Division document preview
  • Yasemin Tekiner in her individual capacity, as a beneficiary and a Trustee of The Yasemin Tekiner 2011 Descendants Trust and derivatively as a holder of equitable interests in a shareholder or a member of the Company Defendants v. Bremen House Inc., German News Company, Inc., Berrin Tekiner, Gonca Tekiner, Billur Akipek in her capacity as a Trustee of the Yasemin Tekiner 2011 Descendants Trust, Zeynep Tekiner (Intervenor Plaintiff)Commercial Division document preview
  • Yasemin Tekiner in her individual capacity, as a beneficiary and a Trustee of The Yasemin Tekiner 2011 Descendants Trust and derivatively as a holder of equitable interests in a shareholder or a member of the Company Defendants v. Bremen House Inc., German News Company, Inc., Berrin Tekiner, Gonca Tekiner, Billur Akipek in her capacity as a Trustee of the Yasemin Tekiner 2011 Descendants Trust, Zeynep Tekiner (Intervenor Plaintiff)Commercial Division document preview
  • Yasemin Tekiner in her individual capacity, as a beneficiary and a Trustee of The Yasemin Tekiner 2011 Descendants Trust and derivatively as a holder of equitable interests in a shareholder or a member of the Company Defendants v. Bremen House Inc., German News Company, Inc., Berrin Tekiner, Gonca Tekiner, Billur Akipek in her capacity as a Trustee of the Yasemin Tekiner 2011 Descendants Trust, Zeynep Tekiner (Intervenor Plaintiff)Commercial Division document preview
  • Yasemin Tekiner in her individual capacity, as a beneficiary and a Trustee of The Yasemin Tekiner 2011 Descendants Trust and derivatively as a holder of equitable interests in a shareholder or a member of the Company Defendants v. Bremen House Inc., German News Company, Inc., Berrin Tekiner, Gonca Tekiner, Billur Akipek in her capacity as a Trustee of the Yasemin Tekiner 2011 Descendants Trust, Zeynep Tekiner (Intervenor Plaintiff)Commercial Division document preview
  • Yasemin Tekiner in her individual capacity, as a beneficiary and a Trustee of The Yasemin Tekiner 2011 Descendants Trust and derivatively as a holder of equitable interests in a shareholder or a member of the Company Defendants v. Bremen House Inc., German News Company, Inc., Berrin Tekiner, Gonca Tekiner, Billur Akipek in her capacity as a Trustee of the Yasemin Tekiner 2011 Descendants Trust, Zeynep Tekiner (Intervenor Plaintiff)Commercial Division document preview
  • Yasemin Tekiner in her individual capacity, as a beneficiary and a Trustee of The Yasemin Tekiner 2011 Descendants Trust and derivatively as a holder of equitable interests in a shareholder or a member of the Company Defendants v. Bremen House Inc., German News Company, Inc., Berrin Tekiner, Gonca Tekiner, Billur Akipek in her capacity as a Trustee of the Yasemin Tekiner 2011 Descendants Trust, Zeynep Tekiner (Intervenor Plaintiff)Commercial Division document preview
  • Yasemin Tekiner in her individual capacity, as a beneficiary and a Trustee of The Yasemin Tekiner 2011 Descendants Trust and derivatively as a holder of equitable interests in a shareholder or a member of the Company Defendants v. Bremen House Inc., German News Company, Inc., Berrin Tekiner, Gonca Tekiner, Billur Akipek in her capacity as a Trustee of the Yasemin Tekiner 2011 Descendants Trust, Zeynep Tekiner (Intervenor Plaintiff)Commercial Division document preview
						
                                

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FILED: NEW YORK COUNTY CLERK 01/31/2023 12:11 AM INDEX NO. 657193/2020 NYSCEF DOC. NO. 1121 RECEIVED NYSCEF: 01/31/2023 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK YASEMIN TEKINER, Index 657193/2020 in her individual capacity, as a beneficiary and a Trustee of The Yasemin Tekiner 2011 Commercial Division Part 3 Descendants Trust and derivatively as a holder of equitable interests in a shareholder or a member Hon. Joel M. Cohen of the Company Defendants, Mot. Seq. 48 Plaintiff, -against- 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. 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 Yasemin Tekiner 2011 Descendants Trust. Defendants. MEMORANDUM OF LAW IN OPPOSITION TO PLAINTIFF ZEYNEP TEKINER’S MOTION TO AMEND THE VERIFIED FIRST AMENDED COMPLAINT 1 of 18 FILED: NEW YORK COUNTY CLERK 01/31/2023 12:11 AM INDEX NO. 657193/2020 NYSCEF DOC. NO. 1121 RECEIVED NYSCEF: 01/31/2023 PRYOR CASHMAN LLP Todd E. Soloway Bryan T. Mohler Rachel E. Shaw 7 Times Square New York, NY 10036 (212) 421-4100 Attorneys for Defendants 2 of 18 FILED: NEW YORK COUNTY CLERK 01/31/2023 12:11 AM INDEX NO. 657193/2020 NYSCEF DOC. NO. 1121 RECEIVED NYSCEF: 01/31/2023 TABLE OF CONTENTS TABLE OF AUTHORITIES .......................................................................................................... ii PRELIMINARY STATEMENT .....................................................................................................1 PROCEDURAL HISTORY AND BACKGROUND......................................................................2 I. Zeynep Intervenes in this Action ............................................................................................2 II. Yasemin’s Second Amended Complaint ................................................................................2 III. Zeynep Proposes Amending Her Complaint, and Then Fails To Do So ................................3 IV. Zeynep’s Proposed Second Amended Complaint...................................................................4 ARGUMENT ...................................................................................................................................4 I. LEGAL STANDARD .............................................................................................................4 II. ZEYNEP ALONE IS TO BLAME FOR HER FAILURE TO TIMELY SEEK AMENDMENT OF THE AMENDED COMPLAINT ...............................6 III. ZEYNEP ALSO CANNOT STATE A CLAIM FOR AIDING AND ABETTING A BREACH OF FIDUCIARY DUTY AGAINST GONCA......................................................7 CONCLUSION ..............................................................................................................................12 i 3 of 18 FILED: NEW YORK COUNTY CLERK 01/31/2023 12:11 AM INDEX NO. 657193/2020 NYSCEF DOC. NO. 1121 RECEIVED NYSCEF: 01/31/2023 TABLE OF AUTHORITIES CASES PAGE(s) Alliance Network, LLC v. Sidley Austin LLP, 43 Misc. 3d 848, 987 N.Y.S 2d 794 (N.Y. Sup. 2014) ..............................................................1 Bailey v. Village of Saranac Lake, Inc., 100 A.D.3d 1089 (3d Dep’t 2012) .............................................................................................5 Bert G. Gross & Co., Inc. v. Damor Realty Corp., 60 A.D.2d 541 (1st Dep’t 1977) ................................................................................................6 In re Dole Food Co., Inc. S’holder Litig., No.8703-VCL, No.9079-VCL, 2015 WL 5052214 (Del. Ch. Aug. 27, 2015) ..........................8 Garfinkel v. Garfinkel, 8 A.D.2d 777 (1st Dep’t 1959) ..................................................................................................4 Glenn Partition, Inc. v. Trustees of Columbia Univ. in City of New York, 169 A.D.2d 488 (1st Dep’t 1991) ..............................................................................................7 Haddad v. New York City Transit Auth., 5 A.D.3d 255 (1st Dep’t 2004) ..................................................................................................6 Kihl v. Pfeffer, 94 N.Y.2d 118 (1999) ................................................................................................................5 Law v. Law, 753 A.2d 443 (Del. 2000) ........................................................................................................11 Lockton v. Rogers, 2021-0058-SG, 2022 Del. Ch. LEXIS 47 (Del. Ch. Mar. 1, 2022) ...........................................7 Malpiede v. Townson, 780 A.2d 1075 (Del. 2001) .....................................................................................................11 Miranda v. Riverdale Manor Home for Adults, 142 A.D.3d 813 (1st Dep’t 2016) ..............................................................................................5 Mosaic Caribe, Ltd. v. AllSettled Group, Inc., 117 A.D.3d 421 (1st Dep’t 2014) ..............................................................................................7 Neurvana Med., LLC v. Balt USA, LLC, CV 2019-0034-KSJM, 2020 WL 949917 (Del. Ch. Feb. 27, 2020) ..........................................9 NuVasive, Inc. v. Miles, CV 2017-0720-SG, 2020 WL 5106554 (Del. Ch. Aug. 31, 2020) ......................................8, 10 ii 4 of 18 FILED: NEW YORK COUNTY CLERK 01/31/2023 12:11 AM INDEX NO. 657193/2020 NYSCEF DOC. NO. 1121 RECEIVED NYSCEF: 01/31/2023 In re NYMEX S'holder Litig., CIV.A. 3621-VCN, 2009 WL 3206051 (Del. Ch. Sept. 30, 2009)............................................9 Olam Corp. v. Thayer, 652764/2018, 2021 WL 408232 (Sup. Ct. N.Y. Cnty. Feb. 5, 2021) ........................................7 In re Oracle Corp. Derivative Litig., CV 2017-0337-SG, 2020 WL 3410745 (Del. Ch. June 22, 2020).............................................8 Orros v. Yick Ming Yip Realty, Inc., 258 A.D.2d 387 (1st Dep’t 1999) ..............................................................................................5 Prince v. O'Brien, 256 A.D.2d 208 (1st Dep’t 1998) ..............................................................................................5 RBC Cap. Markets, LLC v. Jervis, 129 A.3d 816 (Del. 2015) ........................................................................................................11 Rontee & Co. v. Janoff, 224 A.D.2d 227 (1st Dep’t 1996) ..............................................................................................5 In re Santa Fe Pac. Corp. S'holder Litig., 669 A.2d 59 (Del. 1995) ............................................................................................................9 Wolf v. Wolf, 50 A.D.2d 740 (1st Dep’t 1975) ................................................................................................4 STATUTES CPLR 3025.......................................................................................................................................7 CPLR 3211(a) ..................................................................................................................................1 iii 5 of 18 FILED: NEW YORK COUNTY CLERK 01/31/2023 12:11 AM INDEX NO. 657193/2020 NYSCEF DOC. NO. 1121 RECEIVED NYSCEF: 01/31/2023 Defendants Bremen House Inc. (“Bremen House”), German News Company, Inc. (“German News”), (collectively, the “Company Defendants”), Berrin Tekiner (“Berrin”), Gonca Chelsea (“Gonca”), and Billur Akipek (“Billur”) (the “Individual Defendants,” and, together with the Company Defendants, the “Defendants”) respectfully submit this Memorandum of Law pursuant to CPLR 3211(a)(1) and 3211(a)(7) in opposition to Plaintiff Zeynep Tekiner’s (“Plaintiff” or “Zeynep”) Motion to Amend the Verified First Amended Complaint (the “Motion”). PRELIMINARY STATEMENT Zeynep seeks leave, post filing of note of issue, to amend her Amended Verified Complaint in Intervention (the “Amended Complaint”) to add a new theory of recovery against Gonca. Zeynep offers no explanation for why such relief could not have been timely sought in the nine- plus months since she intervened in this action, much less what “material facts” were not known to her prior to the close of discovery -- as the law requires. To the contrary, Zeynep concedes that her proposed new cause of action is “based on the same factual allegations” set forth in the Amended Complaint filed in May 2022. Instead, Zeynep incredibly tries to point the finger at Defendants, claiming that Defendants somehow prevented her from timely seeking to amend. That argument is neither logical nor credible, as described. Because Zeynep fails to meet the standard necessary to amend her complaint post-note of issue, and because the proposed aiding and abetting claim fails to sufficiently allege that Gonca materially supported Berrin and Billur’s alleged fiduciary breaches, the Motion should be denied in its entirety. 6 of 18 FILED: NEW YORK COUNTY CLERK 01/31/2023 12:11 AM INDEX NO. 657193/2020 NYSCEF DOC. NO. 1121 RECEIVED NYSCEF: 01/31/2023 PROCEDURAL HISTORY AND BACKGROUND I. Zeynep Intervenes in this Action In March 2022, Zeynep moved by order to show cause to intervene into this action. (Dkt. 223.) By Decision and Order dated April 18, 2022, Zeynep’s motion was granted. (Dkt. 354.) On April 19, 2022, Zeynep filed a Verified Complaint in Intervention. (Dkt. 358.) Three weeks later, Zeynep filed a First Amended Complaint in Intervention (the “Amended Complaint”). (Dkt. 371.) On May 17, 2022, Defendants filed their Verified Answer, Affirmative Defense and Counterclaims to Zeynep’s Verified Intervention Complaint. (Dkt. 372.) The Amended Complaint asserts six causes of action, pled against various combinations of: Berrin, Gonca Chelsea, Billur, and entity defendants Bremen House and German News. The factual allegations in the Amended Complaint are identical to the factual allegations in Yasemin’s First Amended Complaint. (See Dkt. 371, 86, respectively.) On December 28, 2022, following the completion of fact discovery, Plaintiffs and Defendants each filed Notes of Issue. (Dkt. 998, 997, respectively.) Now, following the filing of Plaintiffs’ own Note of Issue, Zeynep seeks leave to Amend her Amended Complaint (Dkt. 1018.) (“Proposed SAC,” Dkt. 1021). II. Yasemin’s Second Amended Complaint On June 22, 2022, Yasemin filed her Verified Second Amended Complaint (Dkt. 548) adding the Twelfth Cause of Action (“Count Twelve”) for aiding and abetting a breach of fiduciary duty, alleged against each of the Individual Defendants. On August 5, 2022, Defendants moved to dismiss Count Twelve (“Motion Sequence 33”). (Dkt. 660-665.) By Decision and Order dated October 26, 2022, the Court resolved Motion Sequence 33 by dismissing Count Twelve as against Berrin and Billur, but sustaining it as against Gonca. (Dkt. 841.) 2 7 of 18 FILED: NEW YORK COUNTY CLERK 01/31/2023 12:11 AM INDEX NO. 657193/2020 NYSCEF DOC. NO. 1121 RECEIVED NYSCEF: 01/31/2023 III. Zeynep Proposes Amending Her Complaint, and Then Fails To Do So Following Defendants’ motion to dismiss Count Twelve of Yasemin’s Second Amended Complaint, Zeynep proposed amending the Amended Complaint to “add[] the same cause of action.” (Mohler Afm., ¶3, Ex. 1.) 1 However, Zeynep indicated she would “be in touch” after the Court issued its decision the motion. (Id., ¶4, Ex. 2.) By letter dated August 22, 2022, Zeynep confirmed she would “revisit the issue once the Court decides [Defendants’] motion to dismiss” Count Twelve. (Id., ¶5, Ex. 3.) Following the Court’s October 26 Order, Zeynep then waited three weeks to send the Proposed SAC, with a request that Defendants provide their consent to the filing of same. (Id. ¶6, Ex. 4.) Defendants agreed, conditioned upon the parties entering into a stipulation whereby Zeynep would confirm that the Proposed SAC would not include any new factual allegations that would necessitate additional discovery. (Id. ¶7, Ex. 5.) Ten days later, on November 28, 2022, Zeynep confirmed. Id. ¶8.) Zeynep then did nothing for thirty days. (Id. ¶9.) No stipulation was sent. (Id.) It was not until December 28, 2022, the day after the deadline for the completion of fact discovery and the day the parties filed their respective notes of issue, that Zeynep sent the stipulation. (Id. ¶10, Ex. 6.) But the stipulation Zeynep sent did not include the agreed upon representation that Zeynep would not seek additional discovery in connection with the proposed amendment. (Id. ¶11, Ex. 7.) As such, by email dated January 3, 2023, counsel for Defendants indicated they could not consent to a post-note of issue amendment. (Id. ¶12, Ex. 6.) 1 References to “Mohler Aff.” are to the Affirmation of Bryan T. Mohler in Opposition to Zeynep’s Motion for Leave to Amend. 3 8 of 18 FILED: NEW YORK COUNTY CLERK 01/31/2023 12:11 AM INDEX NO. 657193/2020 NYSCEF DOC. NO. 1121 RECEIVED NYSCEF: 01/31/2023 IV. Zeynep’s Proposed Second Amended Complaint The factual allegations in the Proposed SAC are identical to the factual allegations in the Amended Complaint. (See Dkt. 1021, 371, respectively.) The only substantive change is the addition of Zeynep’s Eighth Cause of Action (“Count Eight”) for aiding and abetting a breach of fiduciary duty, alleged against Gonca, who holds no role in connection with either the Yasemin Tekiner 2011 Descendants Trust or the Zeynep Tekiner Ozaltin 2011 Descendants Trust (the “Trust Agreement”). (Dkt. No. 669.) Count Eight principally alleges that: (i) Berrin owed Zeynep a fiduciary duty as “sole member of the Zeynep Trust Protector Committee,” (Dkt. 1021, ¶150); (ii) Billur owed Zeynep a fiduciary duty as “a Trustee [member of the Trust Committee] of the Zeynep Trust,” id. ¶151; and (iii) “Gonca aided and abetted Berrin and [Billur’s] breaches of fiduciary duty.” Id. ¶152. “In 2011, Berrin transferred the [Company’s] property interests…in equal parts to three irrevocable trusts formed under Delaware law….” Id. ¶26. Under the Trust Agreement, the Zeynep Trust is located in Delaware, and Delaware law governs the Trust Agreement: THIRTIETH: Governing Law This instrument and each trust created by this instrument shall be construed and governed in all respects by and in accordance with the law of the State of Delaware and each trust created under this instrument hall have its situs and be administered in the State of Delaware. Id. §30. ARGUMENT I. LEGAL STANDARD It is settled that where “one who seeks the favor of the court has willfully flouted its orders, courts will be loath to exercise their discretion to grant such an applicant affirmative relief.” Wolf v. Wolf, 50 A.D.2d 740, 740 (1st Dep’t 1975) (citation and quotation omitted); see also Garfinkel 4 9 of 18 FILED: NEW YORK COUNTY CLERK 01/31/2023 12:11 AM INDEX NO. 657193/2020 NYSCEF DOC. NO. 1121 RECEIVED NYSCEF: 01/31/2023 v. Garfinkel, 8 A.D.2d 777, 777 (1st Dep’t 1959) (staying party from “taking any further steps” in the prosecution of his case until he complied with a prior order). Likewise, as the Court of Appeals has admonished, “[i]f the credibility of court orders and the integrity of our judicial system are to be maintained, a litigant cannot ignore court orders with impunity.” Kihl v. Pfeffer, 94 N.Y.2d 118, 123 (1999); see also Rontee & Co. v. Janoff, 224 A.D.2d 227, 227-228 (1st Dep’t 1996) (finding that the trial court properly struck the defendant’s answer owing to its failure to post an undertaking in accordance with a prior order). These principals are applicable specifically where a party seeks to amend its complaint after a note of issue has been filed. “While leave to amend a complaint… ordinarily should be freely granted, lateness in making a motion to amend, coupled with the absence of a satisfactory excuse for the delay and prejudice to the opposing party, justifies denial of such a motion.” Bailey v. Village of Saranac Lake, Inc., 100 A.D.3d 1089, 1090 (3d Dep’t 2012). The First Department has regularly held that such an amendment is improper where the facts underlying the new claim were known to the moving party well before the note of issue was filed, and the party provided no excuse for its delay. See Miranda v. Riverdale Manor Home for Adults, 142 A.D.3d 813 (1st Dep’t 2016) (leave to amend complaint after a note of issue was filed was properly denied where “[p]laintiff failed to provide a reasonable excuse for the delay or cite material facts that were not known prior to the close of discovery.” Id. at 814.) (citation omitted); Orros v. Yick Ming Yip Realty, Inc., 258 A.D.2d 387 (1st Dep’t 1999) (leave to amend complaint after a note of issue was filed was properly denied where “plaintiff had been on notice for several months prior to the filing of his note of issue of the facts pertinent to the proposed amendment, [and] he offered no explanation for his delay in moving to amend.” Id. at 388.) (citation omitted); Prince v. O'Brien, 256 A.D.2d 208 (1st Dep’t 1998) (granting leave to amend complaint was reversed where plaintiff 5 10 of 18 FILED: NEW YORK COUNTY CLERK 01/31/2023 12:11 AM INDEX NO. 657193/2020 NYSCEF DOC. NO. 1121 RECEIVED NYSCEF: 01/31/2023 did not explain why the additional claim could not have been brought at the outset of the litigation); see also Haddad v. New York City Transit Auth., 5 A.D.3d 255 (1st Dep’t 2004) (leave to amend a bill of particulars after a note of issue was filed was properly denied solely because plaintiffs provided no excuse for their delay; moreover, “there could be no reasonable excuse since plaintiffs had evidence of the newly asserted injury as early as a year prior to the proposed amendment.” Id. at 256.). Since Zeynep does not and cannot provide any justification for her delay in seeking leave to amend the Amended Complaint prior to the filing of the Notes of Issue, the Motion should be denied. II. ZEYNEP ALONE IS TO BLAME FOR HER FAILURE TO TIMELY SEEK AMENDMENT OF THE AMENDED COMPLAINT Zeynep seeks leave to amend the Amended Complaint, adding an entirely new theory of recovery, after Plaintiffs filed their Note of Issue. But Zeynep offers no explanation for why such amendment could not have been timely sought in the nine months since Zeynep intervened into this action. In fact, Zeynep outright admits Count Eight “is based on the same factual allegations contained in the extant First Amended Complaint.” (Dkt. 1020 at 6.) As the court-ordered deadline for the filing of the Note of Issue approached, Zeynep chose to disregard the Court’s scheduling order—to which she had consented—in order to continue pursuing Plaintiffs’ preferred strategy for this litigation. Plaintiffs’ indifference to the Court’s schedule should not be countenanced, and the Court should deny her request for leave to amend the Amended Complaint that, with diligence, could have been sought long ago. Bert G. Gross & Co., Inc. v. Damor Realty Corp., 60 A.D.2d 541 (1st Dep’t 1977). Zeynep’s argument that Defendants’ previously consented to the amendment of the Amended Complaint rings hollow. (Dkt. 1020 at 3.) What Zeynep conveniently omits from such 6 11 of 18 FILED: NEW YORK COUNTY CLERK 01/31/2023 12:11 AM INDEX NO. 657193/2020 NYSCEF DOC. NO. 1121 RECEIVED NYSCEF: 01/31/2023 argument is that following Defendants’ consent on November 18, 2022 – six weeks prior to the deadline for the filing of the Note of Issue – Zeynep then did nothing. (Mohler Aff. ¶ 10.) It was not until December 28, 2022 – the day both parties filed their Notes of Issue – that Zeynep forwarded Defendants the proposed stipulation concerning the amendment – without the agreed upon representation concerning discovery. (Id. ¶11.) Zeynep offers no justification or excuse whatsoever for this delay. None exists. Because Zeynep wholly disregarded the Court’s scheduling order, the Motion should be denied. Prince, 256 A.D.2d 208. III. ZEYNEP ALSO CANNOT STATE A CLAIM FOR AIDING AND ABETTING A BREACH OF FIDUCIARY DUTY AGAINST GONCA Notwithstanding Zeynep’s dilatory conduct, Count Eight fails as a matter of law. Where “proposed amendments are totally devoid of merit and legally insufficient, leave to amend should be denied.” Mosaic Caribe, Ltd. v. AllSettled Group, Inc., 117 A.D.3d 421, 422 (1st Dep’t 2014) (citations omitted). A proposed amendment is legally insufficient where it cannot survive a motion to dismiss. Glenn Partition, Inc. v. Trustees of Columbia Univ. in City of New York, 169 A.D.2d 488 (1st Dep’t 1991); Olam Corp. v. Thayer, 652764/2018, 2021 WL 408232, at *1 (Sup. Ct. N.Y. Cnty. Feb. 5, 2021) (“A proposed amended complaint that would be subject to dismissal as a matter of law is, by definition, ‘palpably insufficient or clearly devoid of merit’ and thus should not be permitted under CPLR 3025.”). Zeynep’s Motion should be denied because Count Eight fails as a matter of law. Under Delaware law, a cause of action for aiding and abetting a breach of fiduciary duty requires: “(1) the existence of a fiduciary relationship, (2) a breach of the fiduciary’s duty and (3) knowing participation in that breach by the non-fiduciary.” Lockton v. Rogers, 2021-0058-SG, 7 12 of 18 FILED: NEW YORK COUNTY CLERK 01/31/2023 12:11 AM INDEX NO. 657193/2020 NYSCEF DOC. NO. 1121 RECEIVED NYSCEF: 01/31/2023 2022 Del. Ch. LEXIS 47, at *41 (Del. Ch. Mar. 1, 2022). Because the Proposed SAC fails to sufficiently allege these elements against Gonca, the Motion should be denied. Here, Count Eight fails for the simple reason that Zeynep has not alleged, and cannot possibly allege, that Gonca substantially assisted and knowingly participated in any of Billur or Berrin’s alleged fiduciary breaches of their duties to Zeynep. Under Delaware law, “[b]ecause the involvement of secondary actors in tortious conduct can take a variety of forms that can differ vastly in their magnitude, effect, and consequential culpability, the element of knowing participation requires that the secondary actor have provided substantial assistance to the primary violator.” In re Oracle Corp. Derivative Litig., CV 2017- 0337-SG, 2020 WL 3410745, at *11 (Del. Ch. June 22, 2020) (quoting In re Dole Food Co., Inc. S’holder Litig., No.8703-VCL, No.9079-VCL, 2015 WL 5052214, at *41 (Del. Ch. Aug. 27, 2015)). To sustain a claim for aiding and abetting a fiduciary breach under Delaware law, a party must sufficiently allege that the defendant “materially supported or encouraged” the fiduciary breach. NuVasive, Inc. v. Miles, CV 2017-0720-SG, 2020 WL 5106554, at *14 (Del. Ch. Aug. 31, 2020). The Proposed SAC alleges no such underlying facts, as none exist. First, Count Eight is entirely devoid of any allegations that Gonca “provided substantial assistance to the primary violator” or “materially supported or encouraged” Berrin and Billur’s alleged breaches of their fiduciary duties. To the contrary, Zeynep baldly concludes that Gonca “assisted in the planning” of Berrin and Billur’s breaches and “shared the same attorneys so as to ensure these breaches were implemented.” (Dkt. 1021 at ¶152). Zeynep does not identify any act undertaken by Gonca that she provided assistance to either Berrin or Billur or that she “encouraged” either one of them to commit the breaches alleged. Similarly, Zeynep’s allegation that Gonca 8 13 of 18 FILED: NEW YORK COUNTY CLERK 01/31/2023 12:11 AM INDEX NO. 657193/2020 NYSCEF DOC. NO. 1121 RECEIVED NYSCEF: 01/31/2023 “coordinated with the relevant decisionmaker(s) to effect these breaches” is insufficient to state a claim for aiding and abetting. Id. ¶152. Delaware courts regularly reject as inadequate such conclusory statements where they are unsupported by factual allegations. In re Santa Fe Pac. Corp. S'holder Litig., 669 A.2d 59 (Del. 1995) (dismissal of a claim for aiding and abetting breach of fiduciary duty was affirmed where the complaint alleged no specific facts, only that defendant “knowingly and substantially participated and assisted in the Individual Defendants’ breaches of fiduciary duty.” Id. at 72); In re NYMEX S'holder Litig., CIV.A. 3621-VCN, 2009 WL 3206051 (Del. Ch. Sept. 30, 2009) (a complaint which alleged that defendant “actively and knowingly encouraged and participated in said breaches,” was insufficient to sustain a claim for aiding and abetting breach of fiduciary duty); Neurvana Med., LLC v. Balt USA, LLC, CV 2019-0034-KSJM, 2020 WL 949917 (Del. Ch. Feb. 27, 2020) (dismissing a claim of aiding and abetting a breach of fiduciary duty, the court observed: “Delaware courts construe this [claim] narrowly and require a plaintiff to assert specific facts, not conclusory allegations, as to each element.” Id. at *11(citations omitted).). Second, Zeynep fails to plead that Gonca knowingly participated in a breach of a fiduciary duty owed to Zeynep. Indeed, Zeynep alleges that Berrin and Billur breached their respective fiduciary duties to Zeynep by removing Yasemin from her trust (Dkt. 1021 at ¶150(a); 151(a)), by removing Yasemin from her roles at the Entity Defendants and otherwise “retaliating” against Yasemin (id. at ¶150(b)-(d); 151(b)-(d)), and by declining to give Yasemin distributions from her trust (id. at ¶150(e); 151(f)). Zeynep offers no explanation for how any of these alleged acts constitute a breach of Berrin’s or Billur’s fiduciary duties to Zeynep. Nor does Count Eight plead any facts sufficient to show that Gonca knowingly participated in any such breach. 9 14 of 18 FILED: NEW YORK COUNTY CLERK 01/31/2023 12:11 AM INDEX NO. 657193/2020 NYSCEF DOC. NO. 1121 RECEIVED NYSCEF: 01/31/2023 Betraying Count Eight’s utter lack of merit, Zeynep alleges “[t]he removal of Yasemin as Trustee of the Yasemin Trust was detrimental to Zeynep because…Yasemin operated as at least some kind of check on the Individual Defendants.” Id. at ¶153(c). But Zeynep does not identify how removing Yasemin from her role as director constitutes a breach of a duty owed to Zeynep. Nor does Yasemin identify the nature of any purported “encouragement” provided by Gonca. See NuVasive, Inc., 2020 WL 5106554, at *14. Zeynep also makes no serious effort to sufficiently allege that Gonca “participated in . . . decisions made regarding [the Trust Protector Committee].” Dkt. 1021 at ¶150. The Trust Committee has “sole and absolute discretion” over distributions (Dkt. 669, § 2(B)), and the Proposed SAC does not allege when or how executives of the Company Defendants such as Gonca are involved in administration of the Trust Agreement. While Zeynep alleges that Billur abused her discretion as member of Zeynep’s Trust Committee, there is no (and could be no) allegation that Gonca had any role in Billur’s actions taken in connection with Zeynep’s Trust Agreement. See Dkt. 1021 at ¶5; 38. In fact, Zeynep alleges that Billur is “beholden” to Berrin – not Gonca. See, e.g., id. at ¶96. Zeynep also alleges that Billur executed Berrin’s instructions – an allegation that does not suggest any role for Gonca. Id. ¶153. Zeynep further alleges that Billur is “under Berrin’s control” – not Gonca’s. Id. at ¶95. Zeynep’s allegations concerning Berrin’s role as a fiduciary also exclude any participation by Gonca, as Zeynep alleges Berrin “secretly” signed the document removing Yasemin from her trust. Id. Zeynep’s allegation that Berrin and Billur breached their duties in failing to provide her information is contradicted by other allegations in the Proposed SAC. As a director of Bremen House, Zeynep has the right to access books and records of the Company yet admits in her complaint that she “has not made a formal written demand” for such records. See id. at ¶93. 10 15 of 18 FILED: NEW YORK COUNTY CLERK 01/31/2023 12:11 AM INDEX NO. 657193/2020 NYSCEF DOC. NO. 1121 RECEIVED NYSCEF: 01/31/2023 Zeynep’s allegation that Berrin “explicitly and implicitly” threatened to remove Zeynep as a member of her Trust Committee if Zeynep did not consent to the firing of Yasemin also fails to adequately allege a breach, because Zeynep has not alleged any damages based on this threat. RBC Cap. Markets, LLC v. Jervis, 129 A.3d 816, 861 (Del. 2015) (citing Malpiede v. Townson, 780 A.2d 1075 (Del. 2001) (describing the elements of aiding and abetting breaches of fiduciary duty as including “damages proximately caused by the breach”). Third, Zeynep also fails to acknowledge that she participated in Yasemin’s removal and “firing,” by directing the Corporate Trustee to consent to the directive. See Mohler Afm., Ex. 8.2 Zeynep also directed the Corporate Trustee to authorize Bremen House’s sale of certain properties to Extell, which she now conveniently claims amounts to breaches of Berrin and Billur’s fiduciary duties. See Dkt. 1021 at ¶150(g); 151(j); Mohler Afm., Ex. 9. It is black-letter law that a fiduciary is bound to act with the care they would apply to managing their own affairs in the same circumstances. Law v. Law, 753 A.2d 443, 447 (Del. 2000)(citations omitted)(“A non- professional trustee’s duty to the beneficiaries in administering a trust is to exercise the skill and care that a man of ordinary prudence would exercise in dealing with his own property in light of the situation existing at the time.”) Here, applying the care she applies in her own affairs, Zeynep participated in the very act she now claims was a breach. Last, Zeynep’s allegations concerning “use of money from the Company Defendants to pay for properties” is spurious, at best. See Dkt. 1021 at ¶150 (h), (i); 151(k), (l) (regarding alleged “transfer[s]” and “use” of money belonging to the Entity Defendants for personal purposes). First, Zeynep herself, lives in Company-owned property. Second, as a director of Bremen House, 2 “On a motion to dismiss, the court may consider documents referenced in a complaint, even if the pleading fails to attach them.” Alliance Network, LLC v. Sidley Austin LLP, 43 Misc. 3d 848, 852, 987 N.Y.S 2d 794, n.1 (N.Y. Sup. 2014) (citation omitted). 11 16 of 18 FILED: NEW YORK COUNTY CLERK 01/31/2023 12:11 AM INDEX NO. 657193/2020 NYSCEF DOC. NO. 1121 RECEIVED NYSCEF: 01/31/2023 Zeynep herself is required to exercise her own duties as a fiduciary in doing so. Zeynep alleges for the first time in Count Eight that Gonca “advocated for Yasemin and Zeynep to be removed from their Trust Committees. Dkt. 1021, Proposed SAC ¶153(b). Zeynep alleges that, in 2017, “Gonca believed that Yasemin’s role in the Yasemin Trust and the business, and Zeynep’s role in the Zeynep Trust and the business, posed a threat” to Gonca. Id. However, Zeynep did not have any “role . . . in the business” in 2017, despite the allegation that she is an “officer and director of [Bremen House, Inc.].” Id. ¶5. To be clear, Zeynep was first appointed to that position in 2019, two years after she was removed from her Trust Committee. See Mohler Afm., Ex. 10. These threadbare, conclusory allegations cannot support Zeynep’s bid to amend her complaint. CONCLUSION For the foregoing reasons, Defendants respectfully request that the Motion be denied in its entirety. Dated: New York, New York January 30, 2023 PRYOR CASHMAN LLP By: __________________________ Todd E. Soloway Bryan T. Mohler Rachel E. Shaw 7 Times Square New York, NY 10036 (212) 421-4100 Attorneys for Defendants 12 17 of 18 FILED: NEW YORK COUNTY CLERK 01/31/2023 12:11 AM INDEX NO. 657193/2020 NYSCEF DOC. NO. 1121 RECEIVED NYSCEF: 01/31/2023 Certification Required by Rule 17 of the Rules of the Commercial Division of the Supreme Court I am the attorney who is filing this document. I hereby certify that this document, exclusive of the caption, table of contents, table of authorities, and signature block contains 3,569 words as counted by the word-processing system used to prepare the document. /s/ Meghan E. Hill Meghan E. Hill