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Filing # 174307969 E-Filed 05/31/2023 02:59:29 PM
IN THE CIRCUIT COURT OF THE ELEVENTH JUDICIAL CIRCUIT
IN AND FOR MIAMI-DADE COUNTY, FLORIDA
:
FVP SMITHFIELD LLC, a Delaware Limited :
Liability Company, :
:
Plaintiff, :
v. : Case No.
:
PBM PARTNERS, LLC, a Florida Limited :
Liability Company; HIPPEUS PITT :
SPONSOR, LLC a Florida Limited Liability :
Company; and MICHAEL BLUM, an :
individual, :
:
Defendants. :
:
COMPLAINT
FRAUD AND/OR CONSTRUCTIVE FRAUD, CIVIL CONSPIRACY,
BREACH OF FIDUCIARY DUTY, FRAUD IN THE INDUCEMENT, UNJUST
ENRICHMENT, RECISSION, ACCOUNTING AND DECLARATORY RELIEF
COMES NOW, the Plaintiff FVP SMITHFIELD LLC, a Delaware Limited Liability
Company, by and through the undersigned attorneys, and sues PBM PARTNERS, LLC, a Florida
Limited Liability Company, HIPPEUS PITT SPONSOR, LLC, a Florida Limited Liability
Company, and MICHAEL BLUM, an individual, (collectively the Defendants) and each
Defendant, jointly and severally, and demands a trial by jury on all counts so triable and would
state as follows:
JURISDICTION AND PARTIES
1. This is an action brought by Plaintiff FVP SMITHFIELD LLC, (“Smithfield”), to recover
money damages and obtain legal and equitable relief for claims whose value far exceed
Fifty Thousand ($50,000.00) Dollars.
2. At all times material hereto, Smithfield was and is a Delaware Limited Liability Company
and is otherwise sui juris.
3. At all times material hereto, the Defendant PBM PARTNERS, LLC, (“PBM”) was and
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SCHWARTZ | BRESLIN PLLC - ATTORNEYS AT LAW
THE DUPONT BUILDING, 169 EAST FLAGLER STREET, SUITE 700, MIAMI, FLORIDA 33131
PRIMARY EMAIL: ESERVICE@JSJB.LAW
TELEPHONE: (305) 577-4626 / TELEFAX: (305) 577-4630 / JERRY BRESLIN, ESQ., EMAIL - JB@JSJB.LAW
is a Florida Limited Liability Company registered with the Secretary of state of Florida and
authorized to and is conducting business in the State of Florida and with a principal address
in Miami-Dade County, Florida and is otherwise sui juris.
4. At all times material hereto, the Defendant HIPPEUS PITT SPONSOR, LLC, (“HPS”)
was and is a Florida Limited Liability Company registered with the Secretary of state of
Florida and authorized to and is conducting business in the State of Florida and with a
principal address in Miami-Dade County, Florida and is otherwise sui juris.
5. HPS is the manager of Defendant PBM. At all times relevant to this action, HPS acted on
behalf of, with the knowledge and approval of, and with actual and apparent authority for
Defendant PBM .
6. At all times material hereto, Defendant Michael Blum, (“Blum”) was and is an individual
over the age of 18 years and a resident of Miami-Dade County, Florida and is otherwise
sui juris.
7. Blum is both at least a 50 percent owner and manager of both PBM and HPS and is
responsible for directing the activities of PBM.
8. Venue is proper in this Court as the Defendants reside and conduct business in Miami-
Dade County, Florida and the individual Defendant resides in Miami-Dade County, Florida
or otherwise have a principal address in Miami-Dade County, Florida.
9. Jurisdiction is proper in this court because the Defendants operate, conduct, engage in or
carry on businesses or business ventures in this state or have offices or agencies in this
state; have committed tortious acts within this state; have caused injury to persons or
property arising out of acts or omissions outside the state, while engaged in solicitation or
service activities within this state; and are otherwise engaged in substantial and not isolated
activity within this state.
10. All conditions precedent to this action have occurred or have been performed.
ALLEGATIONS COMMON TO ALL COUNTS
11. Prior to and during his tenure with Smithfield, Blum also was an officer and/or member
FVP Smithfield’s parent entities, including Feenix Venture Partners Opportunity Fund, LP
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SCHWARTZ | BRESLIN PLLC - ATTORNEYS AT LAW
THE DUPONT BUILDING, 169 EAST FLAGLER STREET, SUITE 700, MIAMI, FLORIDA 33131
PRIMARY EMAIL: ESERVICE@JSJB.LAW
TELEPHONE: (305) 577-4626 / TELEFAX: (305) 577-4630 / JERRY BRESLIN, ESQ., EMAIL - JB@JSJB.LAW
(“FVOP”) (which owns a 95% interest), and Feenix Payment Systems, LLC (“FPS”)
(which owns a 5% interest). At all times relevant to this action, Blum was a member and
the Executive Vice President of FVOP’s general partner, FVP Opportunity Fund GP, LLC,
and was the Executive Vice President of FPS, collectively the “FVP Entities”.
12. Simultaneously, in or around 2017, Blum was also an owner of both PBM and HPS.
13. In 2017 PBM owned real property located at 205-217 Smithfield Street, Pittsburgh, PA
15222. (the “The Pitt Building”).
14. In or about 2017 Blum undertook a scheme to enrich himself and other owners of PBM
and HPS by convincing the owners and representatives of the FVP Entities to form
Smithfield and fund Smithfield for the specific purpose of causing Smithfield to enter into
various agreements with PBM and HPS.
15. As part of the scheme, Blum convinced his fellow owners and representatives of the FVP
Entities that if an entity was formed and leased The Pitt Building that it would be an
extraordinarily lucrative business opportunity.
16. In justifiable reliance on these representations, the FVP Entities formed Smithfield and
loaned substantial sums in the millions of dollars to Smithfield to fund its operations. The
sole function of Smithfield was the leasehold at The Pitt Building.
17. Since its formation, Blum was the Vice President and Project Manager of Smithfield for
all the relevant agreements and documents described herein.
18. Smithfield entered into a lease agreement with PBM in 2017.
19. While an owner of PBM, Blum served as the lead operating partner for the FVP Entities
operations and was charged with responsibility for, inter alia, the buildout of the leased
premises described below. In this capacity, Blum approved all contractors, oversaw the
purchase of all furniture, fixtures and equipment and hired the management company (in
which Blum was an investor) to operate the completed location.
20. During the term of his employment, Blum owed fiduciary duties to Plaintiff Smithfield,
including duties of loyalty and the duty to operate Smithfield business in the best interests
of the company.
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SCHWARTZ | BRESLIN PLLC - ATTORNEYS AT LAW
THE DUPONT BUILDING, 169 EAST FLAGLER STREET, SUITE 700, MIAMI, FLORIDA 33131
PRIMARY EMAIL: ESERVICE@JSJB.LAW
TELEPHONE: (305) 577-4626 / TELEFAX: (305) 577-4630 / JERRY BRESLIN, ESQ., EMAIL - JB@JSJB.LAW
21. During his tenure with Smithfield, Blum had unfettered access to both the FVP Entities
business records and financial documents, Smithfield’s business records and financial
documents as well as those of PBM and HPS.
22. It was while burdened by the extensive conflicts of interest shown above, and purportedly
acting in each of these irreconcilable capacities, Blum induced the FVP Entities to form
and fund the Plaintiff entity for the sole purpose of entering into a long-term lease to benefit
Blum and his companies PBM and HPS.
23. Blum thereafter caused Smithfield to enter a written Office Lease with PBM Partners dated
December 28, 2017, attached as Exhibit A, (Office Lease) by which PBM Partners leased
property to Smithfield at The Pitt Building.
24. Due to Blum’s actual control of both sides of the transaction, the Office Lease was never
an arms-length agreement and was in fact an instrument of self-dealing and fraud.
25. While Blum was an officer and effectively controlled the activities of Smithfield, he caused
Smithfield to borrow approximately $1.6 million to fund lease expenses, of which
approximately $570,000 was used to pay rents to PBM and approximately $1.1 million was
used to make improvements at the leased premises, all of which expenditures directly or
indirectly benefitted Blum.
26. The aforementioned loans were extended in reliance on Blum’s material misstatements to
the FVP Entities projecting the profitability of the leasehold business venture.
27. The debt incurred by Smithfield, including the purchase of valuable furniture, fixtures, and
equipment, improved The Pitt Building space to make it suitable as an upscale shared
working space managed by TBS Inc., aka “The Beauty Shoppe” and later rebranded as
“The Americas Club.”
28. These substantial expenses went solely to PBM’s long-term benefit and were a windfall
profit, and solely benefited Blum and PBM, all at the expense of Smithfield.
29. Therefore, Blum made material misrepresentations and projections to the FVP Entities and
convinced the FVP Entities to form Smithfield as a single purpose real estate entity for the
actual, hidden sole purpose of improving Blum and PBM’s property and generating income
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SCHWARTZ | BRESLIN PLLC - ATTORNEYS AT LAW
THE DUPONT BUILDING, 169 EAST FLAGLER STREET, SUITE 700, MIAMI, FLORIDA 33131
PRIMARY EMAIL: ESERVICE@JSJB.LAW
TELEPHONE: (305) 577-4626 / TELEFAX: (305) 577-4630 / JERRY BRESLIN, ESQ., EMAIL - JB@JSJB.LAW
for Blum and PBM Partners and the management company in which Blum was an investor.
30. Thereafter, Smithfield incurred substantial debt at Blum’s direction to enrich Blum and
PBM.
The Pitt Building Office Lease Lacks Valid Business Purpose and is Void and/or Voidable.
31. Smithfield had no need or use or business justification to enter the Office Lease or acquire
and fund the expensive leasehold premises, improvements, and FF&E, and no rationale can
be articulated to enter any such lease. As such, the Office Lease constituted sheer economic
waste for Smithfield and sheer underserved and fraudulently induced windfall for Blum
and PBM.
32. As a result of his mismanagement of Smithfield, Blum knew, among other things, that the
projections to take the lease in the first instance were folly and that once the lease was in
place that Smithfield could not sustain the lease payments.
33. Compounding the economic waste embodied in the Office Lease, the lease requires that
any improvements to the leasehold premises must be accomplished at tenant’s sole expense
(apart from a limited one-time tenant improvement allowance), and that all such
improvements will become landlord’s property, at no cost to landlord, at lease termination.
See Office Lease § 12.1.4 p.14 (“Tenant’s Improvements shall become the property of the
Landlord and shall remain upon and be surrendered with the Leased Premises at the
expiration or earlier termination of this Lease”).
34. This was, of course, negotiated by Blum on both sides of the transaction.
35. Notwithstanding the utter lack of any business purpose to justify taking on the leasehold
premises, and notwithstanding that Smithfield never made any use of the “Office Space”
and notwithstanding the extraordinary cost-shifting provisions in the Office Lease, and
notwithstanding the surrender provisions in the Office Lease, Blum and PBM contrived to
lure Smithfield to borrow, and the FVP Entities to fund, $1.1 million in improvements and
build-out of office space, for which Smithfield had no use, and which solely inured to the
benefit of Blum and his companies in the form of substantially improved and more valuable
property without business purpose, and thereby misappropriated to himself exorbitant and
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SCHWARTZ | BRESLIN PLLC - ATTORNEYS AT LAW
THE DUPONT BUILDING, 169 EAST FLAGLER STREET, SUITE 700, MIAMI, FLORIDA 33131
PRIMARY EMAIL: ESERVICE@JSJB.LAW
TELEPHONE: (305) 577-4626 / TELEFAX: (305) 577-4630 / JERRY BRESLIN, ESQ., EMAIL - JB@JSJB.LAW
escalating rent payments and a substantial transfer of wealth in the form of capital
improvements to the leasehold premises.
36. As a result of Blum’s self-dealing in causing the formation of Smithfield and bringing
about the execution of the Office Lease while working both sides of the transaction, the
Office Lease was not and is not an arms-length agreement and was in fact an instrument of
fraud and is void or voidable.
Blum is Justifiably Terminated and Takes Control of the Defrauded Windfall
37. Upon learning of Blum’s duplicity, self-dealing and fraud, Smithfield terminated Blum in
early 2020 due to the patent conflicts of interest and misrepresentations concerning The
Pitt Building lease, Smithfield’s profitability and its financial condition.
38. Immediately upon Blum’s termination, and without providing adequate notice to
Smithfield, PBM declared a default under the Office Lease and filed litigation to recover
the premises and duplicative litigation to accelerate and recover rent in excess of $3.3
million.
39. Without making good service on Smithfield, PBM nevertheless obtained a default
judgment in its lawsuit for the full amount sought, in excess of $3.3 million.
40. Smithfield only became aware of the lawsuit after judgment had already been entered. In
light of the insurmountable judgment amount, accelerating rent for an Office Lease of no
benefit to Smithfield, Smithfield filed a petition for bankruptcy protection.
41. That bankruptcy case is now concluded. The trustee expressly abandoned, and Smithfield
has the right to pursue, all claims and causes of action against, inter alia, PBM Partners,
LLC, Michael Blum, and other entities affiliated with Michael Blum.
42. All conditions precedent have been met or otherwise waived.
COUNT I
FRAUD AND/OR CONSTRUCTIVE FRAUD
Smithfield v. Blum
43. Plaintiff realleges paragraphs 1 through 42 and further alleges:
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SCHWARTZ | BRESLIN PLLC - ATTORNEYS AT LAW
THE DUPONT BUILDING, 169 EAST FLAGLER STREET, SUITE 700, MIAMI, FLORIDA 33131
PRIMARY EMAIL: ESERVICE@JSJB.LAW
TELEPHONE: (305) 577-4626 / TELEFAX: (305) 577-4630 / JERRY BRESLIN, ESQ., EMAIL - JB@JSJB.LAW
44. Prior to and in or about November 2017, and continuing through the spring of 2020
Defendant Blum made representations to Smithfield about the profitability of the office
space lease at The Pitt Building.
45. At the same time Blum failed to tell Smithfield of his conflicts of interest in being the
recipient of substantial funds from Smithfield when he had a duty to so inform the
company.
46. The representations by Defendant Blum were untrue when made and were an intentional
and willful misstatement of fact or facts that Defendant Blum knew or should have known
that Plaintiff Smithfield would rely upon to its detriment.
47. Defendant Blum made misrepresentations of material facts, or withheld material facts
when under a duty to disclose those facts.
48. Defendant Blum knew or should have known of the statements falsity and knew or should
have known that withholding of the truthful material facts would have caused the Plaintiff
to act in an opposite manner.
49. Defendant Blum had the intent that the representations would induce Plaintiff Smithfield
to rely and act on them.
50. The actions of Defendant Blum constitute fraud and/or constructive fraud.
51. As a direct and proximate result of Defendant Blum’s fraud and/or constructive fraud,
Plaintiff Smithfield has been damaged in an amount within the jurisdictional limits of the
Court.
WHEREFORE, Plaintiff Smithfield demands judgment against Defendant Blum for an
amount within the jurisdictional limits of this Court, any other and further injunctive and/or
equitable relief as this Court deems just and proper in order to do justice and respectfully reserves
the right to amend this complaint to demand punitive damages and join other parties similarly
situated if and as required.
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SCHWARTZ | BRESLIN PLLC - ATTORNEYS AT LAW
THE DUPONT BUILDING, 169 EAST FLAGLER STREET, SUITE 700, MIAMI, FLORIDA 33131
PRIMARY EMAIL: ESERVICE@JSJB.LAW
TELEPHONE: (305) 577-4626 / TELEFAX: (305) 577-4630 / JERRY BRESLIN, ESQ., EMAIL - JB@JSJB.LAW
COUNT II
CIVIL CONSPIRACY
Smithfield v. All Defendants
52. Plaintiff realleges paragraphs 1 through 42 and further alleges:
53. This is an action for conspiracy, seeking damages in excess of $50,000, exclusive of
interest, attorneys’ fees and costs.
54. Defendant Blum acted in concert with others known and unknown to the Plaintiff to
develop and pursue the scheme to defraud Plaintiff Smithfield into borrowing and
delivering sums to the benefit and control of Defendant Blum, and his companies PBM and
HPS.
55. Defendant Blum, and his companies PBM and HPS and other conspirators currently
unknown to the Plaintiff acted in concert in making material misrepresentations and
withholding material information knowing that each had a duty to reveal.
56. Defendant Blum, and his companies PBM and HPS other conspirators currently unknown
to the Plaintiff unlawfully combined and conspired among themselves and with others to
fraudulently induce Plaintiff Smithfield into transferring substantial sums to the benefit of
the co-conspirators.
57. Defendant Blum, and his companies PBM and HPS and other conspirators currently
unknown to the Plaintiff have unlawfully combined and conspired among themselves and
with others to fraudulently induce Plaintiff Smithfield into delivering millions of dollars to
the benefit and control of Defendant Blum, and his companies PBM and HPS.
58. The acts of Defendant Blum, and his companies PBM and HPS constitute a civil conspiracy
in violation of Florida law.
59. Defendant Blum has a personal stake in the outcome of the conspiracy with the corporate
Defendants which personal stake was more than incidental and motivated by personal bias.
60. As a direct and proximate result of the civil conspiracy to commit fraud and/or constructive
fraud, Plaintiff Smithfield has been damaged in an amount within the jurisdictional limits
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SCHWARTZ | BRESLIN PLLC - ATTORNEYS AT LAW
THE DUPONT BUILDING, 169 EAST FLAGLER STREET, SUITE 700, MIAMI, FLORIDA 33131
PRIMARY EMAIL: ESERVICE@JSJB.LAW
TELEPHONE: (305) 577-4626 / TELEFAX: (305) 577-4630 / JERRY BRESLIN, ESQ., EMAIL - JB@JSJB.LAW
of this Court.
WHEREFORE, Plaintiff Smithfield demands judgment against Defendant Blum and the
corporate Defendants, jointly and severally, for an amount within the jurisdictional limits of this
Court, any other and further injunctive and/or equitable relief as this Court deems just and proper
in order to do justice and respectfully reserves the right to amend this complaint to demand punitive
damages and join other parties similarly situated if and as required.
COUNT III
FRAUD IN THE INDUCEMENT
Smithfield v. PBM
61. Plaintiff realleges paragraphs 1 through 42 and further alleges:
62. Prior to and on or about November 2017, and continuing through the spring of 2020
Defendant Blum made representations to Smithfield about the profitability of the office
space lease at The Pitt Building.
63. At the same time Blum failed to tell Smithfield of his conflicts of interest in being the
recipient of substantial funds from Smithfield when he had a duty to so inform the
company.
64. The representations by Defendant Blum were not true when made and were an intentional
and willful misstatement of fact or facts that Defendant Blum knew or should have known
that Plaintiff Smithfield would rely upon to its detriment.
65. Defendant Blum made misrepresentations of material facts, or withheld material facts
when under a duty to disclose those facts.
66. Defendant Blum knew or should have known of the statements falsity and knew or should
have known that withholding of the truthful material facts would have caused the Plaintiff
to act in an opposite manner.
67. Defendant Blum had the intent that the representations would induce Plaintiff Smithfield
to rely and act on them.
68. In justifiable reliance on the misrepresentations of Defendant Blum and Smithfield entered
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SCHWARTZ | BRESLIN PLLC - ATTORNEYS AT LAW
THE DUPONT BUILDING, 169 EAST FLAGLER STREET, SUITE 700, MIAMI, FLORIDA 33131
PRIMARY EMAIL: ESERVICE@JSJB.LAW
TELEPHONE: (305) 577-4626 / TELEFAX: (305) 577-4630 / JERRY BRESLIN, ESQ., EMAIL - JB@JSJB.LAW
into the Office Lease.
69. But for the intentional and fraudulent misrepresentations of Defendant Blum Plaintiff
Smithfield would not have entered into the Office Lease.
70. The Office Lease was fraudulently induced.
71. Plaintiff Smithfield demands a judgment voiding the Office Lease as fraudulently induced.
72. As a direct and proximate result of the fraud in the inducement, Plaintiff Smithfield has
been damaged in an amount within the jurisdictional limits of this Court.
WHEREFORE, Plaintiff Smithfield demands judgment against Defendant PBM voiding
the Office Lease as induced by fraud.
COUNT IV
BREACH OF FIDUCIARY DUTY
Smithfield v. Blum
73. Plaintiff realleges paragraphs 1 through 42 and further alleges:
74. As the Vice President and Project Manager of Smithfield Defendant Blum had a duty of
loyalty and a duty to act in the best interests of the company and consistently with the
obligation of good faith and fair dealing.
75. There existed a relation of trust and confidence between Defendant Blum and Plaintiff
Smithfield where confidence was reposed by Plaintiff Smithfield in Defendant Blum and
a trust was accepted by Defendant Blum.
76. The trust in Defendant Blum was intentionally acquired and abused.
77. Defendant Blum had a fiduciary duty to Plaintiff Smithfield.
78. Defendant Blum breached his fiduciary duty to Plaintiff Smithfield.
79. Blum has continuously disregarded and breached his obligations and duties to Plaintiff.
80. Plaintiff has suffered money damages and other damages as a result of Blum’s unlawful
conduct, for which it is entitled to compensation herein, which damages include, at a
minimum, all rent, additional rent, tenant improvements and other payments and
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SCHWARTZ | BRESLIN PLLC - ATTORNEYS AT LAW
THE DUPONT BUILDING, 169 EAST FLAGLER STREET, SUITE 700, MIAMI, FLORIDA 33131
PRIMARY EMAIL: ESERVICE@JSJB.LAW
TELEPHONE: (305) 577-4626 / TELEFAX: (305) 577-4630 / JERRY BRESLIN, ESQ., EMAIL - JB@JSJB.LAW
expenditures made to or for the benefit of PBM Partners, the total of which exceeds $1.6
million.
81. Blum’s conduct complained of herein was undertaken willfully, intentionally, maliciously,
wantonly and with reckless indifference to the rights of Plaintiff.
82. As a direct and proximate result of Defendant Blum’s breach of fiduciary duty, Plaintiff
Smithfield has been damaged in an amount within the jurisdictional limits of this court.
WHEREFORE, Plaintiff Smithfield demands judgment against Defendant Blum for
compensatory damages and consequential damages within the jurisdictional limits of this court
arising from the acts of Defendant Blum and such other and further emergency injunctive and/or
equitable relief as this Court deems just and proper and reserves the right to amend this pleading
to assert a claim for punitive damages.
COUNT V
UNJUST ENRICHMENT
Smithfield v. Blum
83. Plaintiff realleges paragraphs 1 through 42 and further alleges:
84. As the Vice President and Project Manager of Smithfield Defendant Blum had a duty of
loyalty and a duty to act in the best interests of the company and consistently with the
obligation of good faith and fair dealing.
85. At the request and insistence of Defendant Blum, sums were delivered by Plaintiff
Smithfield to Defendants PBM and HPS Blum which accrued to the personal benefit of
Defendant Blum as the owner of the Defendant companies.
86. Plaintiff Smithfield has conferred a benefit on Defendant Blum.
87. Defendant Blum both unlawfully orchestrated and has knowledge of the benefit conferred
upon him.
88. Defendant Blum has retained the benefit conferred.
89. The circumstances are such that it would be inequitable for Defendant Blum to retain the
benefit without Plaintiff Smithfield paying fair value for it.
Page 11
SCHWARTZ | BRESLIN PLLC - ATTORNEYS AT LAW
THE DUPONT BUILDING, 169 EAST FLAGLER STREET, SUITE 700, MIAMI, FLORIDA 33131
PRIMARY EMAIL: ESERVICE@JSJB.LAW
TELEPHONE: (305) 577-4626 / TELEFAX: (305) 577-4630 / JERRY BRESLIN, ESQ., EMAIL - JB@JSJB.LAW
WHEREFORE, Plaintiff Smithfield demands judgment against Defendant Blum for an
amount within the jurisdictional limits of this Court, any other and further injunctive and/or
equitable relief as this Court deems just and proper in order to do justice and respectfully reserves
the right to amend this complaint to demand punitive damages and join other parties similarly
situated if and as required.
COUNT VI
RECISSION
Smithfield v. PBM
90. Plaintiff realleges paragraphs 1 through 42 and further alleges:
91. Prior to and in or about November 2017, and continuing through the spring of 2020
Defendant Blum made representations to Smithfield about the profitability of the office
space lease at The Pitt Building.
92. At the same time Blum failed to tell Smithfield of his conflicts of interest in being the
recipient of substantial funds from Smithfield when he had a duty to so inform the
company.
93. The representations by Defendant Blum were untrue when made and were an intentional
and willful misstatement of fact or facts that Defendant Blum knew or should have known
that Plaintiff Smithfield would rely upon to its detriment.
94. Defendant Blum made misrepresentations of material facts, or withheld material facts
when under a duty to disclose those facts.
95. Defendant Blum knew or should have known of the statements falsity and knew or should
have known that withholding of the truthful material facts would have caused the Plaintiff
to act in an opposite manner.
96. Defendant Blum had the intent that the representations would induce Plaintiff Smithfield
to rely and act on them.
97. In justifiable reliance on the misrepresentations of Defendant Blum and Smithfield entered
into the Office Lease.
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SCHWARTZ | BRESLIN PLLC - ATTORNEYS AT LAW
THE DUPONT BUILDING, 169 EAST FLAGLER STREET, SUITE 700, MIAMI, FLORIDA 33131
PRIMARY EMAIL: ESERVICE@JSJB.LAW
TELEPHONE: (305) 577-4626 / TELEFAX: (305) 577-4630 / JERRY BRESLIN, ESQ., EMAIL - JB@JSJB.LAW
98. Plaintiff Smithfield demands rescission of the Office Lease.
99. Here the remedy of recission is justified because fraud has been established, and in such a
circumstance a court may set aside all transactions founded on it, however they may have
been effected, and notwithstanding any contrivance by which it may have been attempted
to protect them, and may also treat acts as having been done which ought to have been
done, and convert the party who has committed a fraud and profited by it into a trustee for
the injured party.
WHEREFORE, Plaintiff Smithfield demands judgment voiding and rescinding the Office
Lease.
COUNT VII
ACCOUNTING
Smithfield v. Blum
100. Plaintiff realleges paragraphs 1 through 42 and further alleges:
101. This is an action for an accounting.
102. As the Vice President and Project Manager of Smithfield Defendant Blum had duties and
responsibilities to the company including a duty of loyalty.
103. The duty of loyalty includes accounting to the limited liability company and holding as
trustee for it any property, profit, or benefit derived.
104. Plaintiff demands an accounting of all books and records of the corporate Defendants that
received any of the funds of the Plaintiff to determine how those funds were utilized or
otherwise transferred.
105. Plaintiff demands an accounting of all books and records of the corporate Defendants that
paid any purported interest payments to the Plaintiff to determine the source of those funds.
WHEREFORE, Plaintiff Smithfield demands a judgment ordering Defendant Blum to
account of all sums taken in and expended during his management of the Plaintiff.
Page 13
SCHWARTZ | BRESLIN PLLC - ATTORNEYS AT LAW
THE DUPONT BUILDING, 169 EAST FLAGLER STREET, SUITE 700, MIAMI, FLORIDA 33131
PRIMARY EMAIL: ESERVICE@JSJB.LAW
TELEPHONE: (305) 577-4626 / TELEFAX: (305) 577-4630 / JERRY BRESLIN, ESQ., EMAIL - JB@JSJB.LAW
COUNT VIII
DECLARATORY RELIEF
Smithfield v. All Defendants
106. Plaintiff realleges paragraphs 1 through 42 and further alleges:
107. This is an action for declaratory relief under Florida Statutes Chapter 86.
108. Plaintiff Smithfield in good faith believes that it has, to date, complied with all conditions
precedent to have the Office Lease declared void, voidable or otherwise rescinded.
109. There is a real and present controversy between Plaintiff and Defendants.
110. Substantial legal rights of Plaintiff are involved and require the judicial intervention of this
Honorable Court.
REQUEST FOR DECLARATORY RELIEF
WHEREFORE, Plaintiff respectfully requests that the Court:
A. Take jurisdiction over this matter and render a Declaratory Judgment stating
that the Plaintiff Smithfield is entitled to have the Office Lease declared void
and entering a judgment declaring the Office Lease void.
DEMAND FOR TRIAL BY JURY
Plaintiff Smithfield demands trial by jury on all issues so triable.
Certificate of Service
I HEREBY CERTIFY that a true and correct copy of the foregoing document was filed with the
Clerk of the Courts and served via email through the Florida Courts eFiling Portal in accordance
with Rule 2.516 of the Florida Rules of Judicial Administration upon all counsel of record.
On May 31, 2023
Respectfully submitted,
Schwartz | Breslin PLLC
Fl. Rule of Jud. Admin. 2.516 Notice
Primary email: EService@JSJB.LAW
Secondary Email: JB@JSJB.LAW
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SCHWARTZ | BRESLIN PLLC - ATTORNEYS AT LAW
THE DUPONT BUILDING, 169 EAST FLAGLER STREET, SUITE 700, MIAMI, FLORIDA 33131
PRIMARY EMAIL: ESERVICE@JSJB.LAW
TELEPHONE: (305) 577-4626 / TELEFAX: (305) 577-4630 / JERRY BRESLIN, ESQ., EMAIL - JB@JSJB.LAW
s/ Jerry Breslin
Jerry Breslin Esq.
Fla. Bar # 269573
Email: JB@JSJB.Law
Schwartz | Breslin, Attorneys at Law
The DuPont Building
169 East Flagler Street
Suite 700
Miami, Fl 33131
Tel.: 305-577-4626
Fax.: 305-577-4630
/s/ Jonathan Noah Schwartz, Esq.
Jonathan Noah Schwartz, Esq.
Florida Bar No. 1014596
Email: JS@JSJB.Law
Schwartz | Breslin, Attorneys at Law
Of Counsel
(Motion Pro Hac Vice Forthcoming)
Scott M. Hare, Esquire
Pa. I.D. No. 63818
share@whitefordlaw.com
Whiteford, Taylor & Preston, LLP
11 Stanwix Street, Suite 1400
Pittsburgh, PA 15222
Page 15
SCHWARTZ | BRESLIN PLLC - ATTORNEYS AT LAW
THE DUPONT BUILDING, 169 EAST FLAGLER STREET, SUITE 700, MIAMI, FLORIDA 33131
PRIMARY EMAIL: ESERVICE@JSJB.LAW
TELEPHONE: (305) 577-4626 / TELEFAX: (305) 577-4630 / JERRY BRESLIN, ESQ., EMAIL - JB@JSJB.LAW
EXHIBIT A
Exhibit A
OFFICE LEASE
THIS OFFICE LEASE (this "Lease") made as of the 28th day of December, 2017, by
and between PBM PARTNERS, LLC, a Florida limited liability company ("Landlord"), and
FVP SMITHFIELD LLC, a Delaware limited liability company ("Tenant"). For the purposes
collectively, as the "Parties".
of this. Lease, Landlord and Tenant are sometimes referred to, individually, as a "�" and,
1. DEFINITIONS
As used in this Lease, the following terms shall have the meanings set forth below or in the
Section of this Lease referred to, unless the context otherwise requires:
ACMs: As defined in Section 12.1. l.
ADA: As defined in Section 9.2.
Additional Rent: As defined in Section 5.1.
Bankruptcy Code: As defined in Section 15.1.
Base Rent: As defined in Section 4.1.2.
Building: As defined in Section 2.1.
Casualty: As defined in Section 18.1.
CERCLA: As defined in Section 24.1.1.
Commencement Date: As defined in Section 3.1.1.
Common Areas: As defined in Section 13.1.
Environmental Laws: As defined in Section 24.1.1.
Event of Default: As defined in Section 19.1.
Fair Market Rental Rate: As defined in Section 4.1.2.
Final Walk-Through: As defined in Section 17.2.
First Lease Year: As defined in Section 3.1.1.
Force Majeure: As defined in Section 25.1.
!B3504684.2}
Hazardous Substances: As defined in Section 24.1.2.
HSCA: As defined in Section 24.1.2.
Initial Term: As defined in Section 3.1.1.
Initial Term Base Rent: As defined in Section 4.1.1.
Late Rate: As defined in Section 4.4.
Laws: As defined in Section 9.1.
Leased Premises: As defined in Section 2.1.
Manager: As defined in Section 10.3.
Mold Conditions: As defined in Section 11.3.1.
Obligation: As defined in Section 25.6.
Permitted Use: As defined in Section 8.1.
Punch List Items: As defined in Section 17.2.
RCRA: As defined in Section 24.1.1.
Removal Notice Period: As defined in Section 8.3.
Renewal Notice: As defined in Section 3.2.2.
Renewal Term: As defined in Section 3.2.1.
Renewal Term Base Rent: As defined in Section 4.1.2.
Rent: As defined in Section 5.1.
Taxes: As defined in Section 6.1.
Tenant Improvement Allowance: As defined in Section 12.2
Tenant's Improvements: As defined in Section 12.1.
Tenant's Initial Improvements: As defined in Section 12.1.
Tenant's Personal Property: As defined in Section 8.3.
(B3504684.2l 2
Tenn: As defined in Section 3.1.1.
Termination Date: As defined in Section 3.1.1.
2. PREMISES.
2.1 Description. The "Leased Premises" consist of a space containing approximately
16,358 square feet on the second floor of that building known as the Pitt Building, located on
Smithfield Street in the City of Pittsburgh, Allegheny County, Pennsylvania currently referenced
as Block and Lot Number 1-M-176 in the Allegheny County Office of Property Assessments, as
well as the second floor of the warehouse located at 340 3rd Avenue, Pittsburgh, PA 15222 and
currently referenced as Block and Lot No. 1-H-384 in the Allegheny County Office of Property
Assessments (collectively, the "Building"). The area of the Leased Premises is subject to
remeasurement within ninety (90) days after the Commencement Date (as defined in
Section3.1.1), which remeasurement shall occur at Landlord's discretion in accordance with
BOMA standards. The legal description of the land on which the Building is located is attached
hereto and incorporated herein as Exhibit A. A drawing depicting the Leased Premises is
attached hereto and incorporated herein as Exhibit B.
2.2 Demise. For and in consideration of payment of the Rent (as defined in Section 5.3) and
performance of other obligations hereunder and intending to be legally bound, Landlord does
hereby lease and demise unto Tenant and Tenant does hereby lease and take from Landlord the
Leased Premises. No personal property or equipment of Landlord shall be part of the Leased
Premises. The Leased Premises shall be vacant and not subject to occupancy or termination of
an existing tenant. Landlord shall deliver the Leased Premises in a "vanilla box" condition and
in compliance with applicable Law. Except for any Tenant's Improvements to the Leased
Premises described in Section 12.1 or as otherwise provided in this Lease, Tenant hereby accepts
the Leased Premises in its "AS IS, WHERE IS" condition "WlTH ALL FAULTS''.
2.3 Intentionally Left Blank.
3. TERM.
3.1 Initial Term.
3.1.1 Commencement/Termination. The initial term of this Lease (the "Initial Term")
shall commence on the earlier of the completion of Tenant's Initial Improvements (as
defined in Section 12.1) or June 15, 2018 ("Commencement Date"), and shall expire as
of 11 :59 P.M. on the last day of the month which is ten (10) years after the
Commencement Date. The Initial Tenn and the Renewal Tenn are sometimes hereinafter
collectively referred to as the "Term." For the purposes of this Lease, the "First Lease
Year" shall mean the first twelve (12) calendar months of the Initial Tenn. The
"Termination Date" shall be the last day of the Initial Term or the last day of the
Renewal Term, as applicable.
(835046114.2) 3
3.1.2 Intentionally Left Blank.
3.2 Renewal Term.
3.2.l Option. Tenant shall have the option to renew this Lease for one (1) additional
term of five (5) years following expiration of the Initial Term (the "Renewal Term"),
provided: (i) that this Lease is in full force and effect immediately prior to the date of the
commencement of such Renewal Term; and (ii) that there is no Event of Default existing
either at the time of the commencement of such Renewal Term or at the time that
Landlord receives the Renewal Notice (as defined below).
3.2.2 Exercise. Such option shall be exercised by Tenant serving on Landlord written
notice to that effect not later than one hundred eighty (180) days prior to the expiration of
the Initial Term (the "Renewal Notice"). The Renewal Notice given by Tenant shall
constitute an agreement between the Parties for a renewal of this Lease. If Tenant fails to
exercise its renewal option within such time period, Tenant shall be deemed to have
waived its right to the Renewal Term. If this Lease or the right of occupancy of Tenant
hereunder shall have expired or come to an end pursuant to any of the provisions of this
Lease, all rights of Tenant to the Renewal Term shall be deemed terminated
automatically. Additionally, if and to the extent that the Tenant's obligations under this
Lease are guaranteed by a third party, then, as a condition to Tenant's right to the
Renewal Term, such guarantor(s) must reaffirm their guaranty in the form and substance
reasonably required by Landlord at such time. Notwithstanding anything in Section 3.2. l
to the contrary, in the event that Tenant provides Landlord with a Renewal Notice and
one or both of the conditions set forth as (i) and (ii) in Section 3.2.l has not been
satisfied, then Landlord shall have the right (but not the obligation) to waive such
conditions and accept the Renewal Notice, in which case the Renewal Notice shall be
deemed effective and the Renewal Term shall commence as if such conditions had been
satisfied.
3.2.3 Terms. Said renewal shall be upon the same terms, covenants, conditions and
limitations as provided in this Lease, except that the Renewal Term Base Rent shall be as
set forth in Section 4.1.2, there shall be no additional Tenant Improvement Allowance.
3.3. Holdover. The Parties recognize and agree that the damage to Landlord resulting from
any failure by Tenant to timely surrender possession of the Leased Premises will be substantial,
will exceed the amount of the monthly installments of the Rent payable hereunder, and will be
impossible to measure accurately. Tenant's occupancy subsequent to such expiration or
termination, whether or not with the consent or acquiescence of Landlord, shall be deemed to be
that of a tenancy-at-will and in no event from month-to-month or from year-to-year, and it shall
be subject to all terms, covenants, and conditions of this Lease applicable thereto, including,
without limitation, those set forth in this holdover provision. In the event that Tenant defaults or
remains in possession of the Leased Premises or any part thereof after the expiration of the
tenancy-at-will created hereby then Tenant's occupancy shall be deemed a tenancy-at-sufferance
and not a tenancy-at-will. Unless Landlord provides written notice to Tenant indicating
{B3504684.2) 4
otherwise, Tenant agrees that if possession of the Leased Premises is not surrendered to Landlord
upon the Termination Date or sooner termination of the Lease, in addition to any other rights or
remedies Landlord may have hereunder or at law, Tenant shall pay to Landlord, as liquidated
damages, for each month and for each portion of any month during which Tenant holds over in
the Leased Premises after the Termination Date or sooner termination of this Lease, a sum equal
to two hundred percent (200%) of the Base Rent (or Renewal Term Base Rent as the case may
be) that was payable under thi
Preview
Filing # 174307969 E-Filed 05/31/2023 02:59:29 PM IN THE CIRCUIT COURT OF THE ELEVENTH JUDICIAL CIRCUIT IN AND FOR MIAMI-DADE COUNTY, FLORIDA : FVP SMITHFIELD LLC, a Delaware Limited : Liability Company, : : Plaintiff, : v. : Case No. : PBM PARTNERS, LLC, a Florida Limited : Liability Company; HIPPEUS PITT : SPONSOR, LLC a Florida Limited Liability : Company; and MICHAEL BLUM, an : individual, : : Defendants. : : COMPLAINT FRAUD AND/OR CONSTRUCTIVE FRAUD, CIVIL CONSPIRACY, BREACH OF FIDUCIARY DUTY, FRAUD IN THE INDUCEMENT, UNJUST ENRICHMENT, RECISSION, ACCOUNTING AND DECLARATORY RELIEF COMES NOW, the Plaintiff FVP SMITHFIELD LLC, a Delaware Limited Liability Company, by and through the undersigned attorneys, and sues PBM PARTNERS, LLC, a Florida Limited Liability Company, HIPPEUS PITT SPONSOR, LLC, a Florida Limited Liability Company, and MICHAEL BLUM, an individual, (collectively the Defendants) and each Defendant, jointly and severally, and demands a trial by jury on all counts so triable and would state as follows: JURISDICTION AND PARTIES 1. This is an action brought by Plaintiff FVP SMITHFIELD LLC, (“Smithfield”), to recover money damages and obtain legal and equitable relief for claims whose value far exceed Fifty Thousand ($50,000.00) Dollars. 2. At all times material hereto, Smithfield was and is a Delaware Limited Liability Company and is otherwise sui juris. 3. At all times material hereto, the Defendant PBM PARTNERS, LLC, (“PBM”) was and Page 1 SCHWARTZ | BRESLIN PLLC - ATTORNEYS AT LAW THE DUPONT BUILDING, 169 EAST FLAGLER STREET, SUITE 700, MIAMI, FLORIDA 33131 PRIMARY EMAIL: ESERVICE@JSJB.LAW TELEPHONE: (305) 577-4626 / TELEFAX: (305) 577-4630 / JERRY BRESLIN, ESQ., EMAIL - JB@JSJB.LAW is a Florida Limited Liability Company registered with the Secretary of state of Florida and authorized to and is conducting business in the State of Florida and with a principal address in Miami-Dade County, Florida and is otherwise sui juris. 4. At all times material hereto, the Defendant HIPPEUS PITT SPONSOR, LLC, (“HPS”) was and is a Florida Limited Liability Company registered with the Secretary of state of Florida and authorized to and is conducting business in the State of Florida and with a principal address in Miami-Dade County, Florida and is otherwise sui juris. 5. HPS is the manager of Defendant PBM. At all times relevant to this action, HPS acted on behalf of, with the knowledge and approval of, and with actual and apparent authority for Defendant PBM . 6. At all times material hereto, Defendant Michael Blum, (“Blum”) was and is an individual over the age of 18 years and a resident of Miami-Dade County, Florida and is otherwise sui juris. 7. Blum is both at least a 50 percent owner and manager of both PBM and HPS and is responsible for directing the activities of PBM. 8. Venue is proper in this Court as the Defendants reside and conduct business in Miami- Dade County, Florida and the individual Defendant resides in Miami-Dade County, Florida or otherwise have a principal address in Miami-Dade County, Florida. 9. Jurisdiction is proper in this court because the Defendants operate, conduct, engage in or carry on businesses or business ventures in this state or have offices or agencies in this state; have committed tortious acts within this state; have caused injury to persons or property arising out of acts or omissions outside the state, while engaged in solicitation or service activities within this state; and are otherwise engaged in substantial and not isolated activity within this state. 10. All conditions precedent to this action have occurred or have been performed. ALLEGATIONS COMMON TO ALL COUNTS 11. Prior to and during his tenure with Smithfield, Blum also was an officer and/or member FVP Smithfield’s parent entities, including Feenix Venture Partners Opportunity Fund, LP Page 2 SCHWARTZ | BRESLIN PLLC - ATTORNEYS AT LAW THE DUPONT BUILDING, 169 EAST FLAGLER STREET, SUITE 700, MIAMI, FLORIDA 33131 PRIMARY EMAIL: ESERVICE@JSJB.LAW TELEPHONE: (305) 577-4626 / TELEFAX: (305) 577-4630 / JERRY BRESLIN, ESQ., EMAIL - JB@JSJB.LAW (“FVOP”) (which owns a 95% interest), and Feenix Payment Systems, LLC (“FPS”) (which owns a 5% interest). At all times relevant to this action, Blum was a member and the Executive Vice President of FVOP’s general partner, FVP Opportunity Fund GP, LLC, and was the Executive Vice President of FPS, collectively the “FVP Entities”. 12. Simultaneously, in or around 2017, Blum was also an owner of both PBM and HPS. 13. In 2017 PBM owned real property located at 205-217 Smithfield Street, Pittsburgh, PA 15222. (the “The Pitt Building”). 14. In or about 2017 Blum undertook a scheme to enrich himself and other owners of PBM and HPS by convincing the owners and representatives of the FVP Entities to form Smithfield and fund Smithfield for the specific purpose of causing Smithfield to enter into various agreements with PBM and HPS. 15. As part of the scheme, Blum convinced his fellow owners and representatives of the FVP Entities that if an entity was formed and leased The Pitt Building that it would be an extraordinarily lucrative business opportunity. 16. In justifiable reliance on these representations, the FVP Entities formed Smithfield and loaned substantial sums in the millions of dollars to Smithfield to fund its operations. The sole function of Smithfield was the leasehold at The Pitt Building. 17. Since its formation, Blum was the Vice President and Project Manager of Smithfield for all the relevant agreements and documents described herein. 18. Smithfield entered into a lease agreement with PBM in 2017. 19. While an owner of PBM, Blum served as the lead operating partner for the FVP Entities operations and was charged with responsibility for, inter alia, the buildout of the leased premises described below. In this capacity, Blum approved all contractors, oversaw the purchase of all furniture, fixtures and equipment and hired the management company (in which Blum was an investor) to operate the completed location. 20. During the term of his employment, Blum owed fiduciary duties to Plaintiff Smithfield, including duties of loyalty and the duty to operate Smithfield business in the best interests of the company. Page 3 SCHWARTZ | BRESLIN PLLC - ATTORNEYS AT LAW THE DUPONT BUILDING, 169 EAST FLAGLER STREET, SUITE 700, MIAMI, FLORIDA 33131 PRIMARY EMAIL: ESERVICE@JSJB.LAW TELEPHONE: (305) 577-4626 / TELEFAX: (305) 577-4630 / JERRY BRESLIN, ESQ., EMAIL - JB@JSJB.LAW 21. During his tenure with Smithfield, Blum had unfettered access to both the FVP Entities business records and financial documents, Smithfield’s business records and financial documents as well as those of PBM and HPS. 22. It was while burdened by the extensive conflicts of interest shown above, and purportedly acting in each of these irreconcilable capacities, Blum induced the FVP Entities to form and fund the Plaintiff entity for the sole purpose of entering into a long-term lease to benefit Blum and his companies PBM and HPS. 23. Blum thereafter caused Smithfield to enter a written Office Lease with PBM Partners dated December 28, 2017, attached as Exhibit A, (Office Lease) by which PBM Partners leased property to Smithfield at The Pitt Building. 24. Due to Blum’s actual control of both sides of the transaction, the Office Lease was never an arms-length agreement and was in fact an instrument of self-dealing and fraud. 25. While Blum was an officer and effectively controlled the activities of Smithfield, he caused Smithfield to borrow approximately $1.6 million to fund lease expenses, of which approximately $570,000 was used to pay rents to PBM and approximately $1.1 million was used to make improvements at the leased premises, all of which expenditures directly or indirectly benefitted Blum. 26. The aforementioned loans were extended in reliance on Blum’s material misstatements to the FVP Entities projecting the profitability of the leasehold business venture. 27. The debt incurred by Smithfield, including the purchase of valuable furniture, fixtures, and equipment, improved The Pitt Building space to make it suitable as an upscale shared working space managed by TBS Inc., aka “The Beauty Shoppe” and later rebranded as “The Americas Club.” 28. These substantial expenses went solely to PBM’s long-term benefit and were a windfall profit, and solely benefited Blum and PBM, all at the expense of Smithfield. 29. Therefore, Blum made material misrepresentations and projections to the FVP Entities and convinced the FVP Entities to form Smithfield as a single purpose real estate entity for the actual, hidden sole purpose of improving Blum and PBM’s property and generating income Page 4 SCHWARTZ | BRESLIN PLLC - ATTORNEYS AT LAW THE DUPONT BUILDING, 169 EAST FLAGLER STREET, SUITE 700, MIAMI, FLORIDA 33131 PRIMARY EMAIL: ESERVICE@JSJB.LAW TELEPHONE: (305) 577-4626 / TELEFAX: (305) 577-4630 / JERRY BRESLIN, ESQ., EMAIL - JB@JSJB.LAW for Blum and PBM Partners and the management company in which Blum was an investor. 30. Thereafter, Smithfield incurred substantial debt at Blum’s direction to enrich Blum and PBM. The Pitt Building Office Lease Lacks Valid Business Purpose and is Void and/or Voidable. 31. Smithfield had no need or use or business justification to enter the Office Lease or acquire and fund the expensive leasehold premises, improvements, and FF&E, and no rationale can be articulated to enter any such lease. As such, the Office Lease constituted sheer economic waste for Smithfield and sheer underserved and fraudulently induced windfall for Blum and PBM. 32. As a result of his mismanagement of Smithfield, Blum knew, among other things, that the projections to take the lease in the first instance were folly and that once the lease was in place that Smithfield could not sustain the lease payments. 33. Compounding the economic waste embodied in the Office Lease, the lease requires that any improvements to the leasehold premises must be accomplished at tenant’s sole expense (apart from a limited one-time tenant improvement allowance), and that all such improvements will become landlord’s property, at no cost to landlord, at lease termination. See Office Lease § 12.1.4 p.14 (“Tenant’s Improvements shall become the property of the Landlord and shall remain upon and be surrendered with the Leased Premises at the expiration or earlier termination of this Lease”). 34. This was, of course, negotiated by Blum on both sides of the transaction. 35. Notwithstanding the utter lack of any business purpose to justify taking on the leasehold premises, and notwithstanding that Smithfield never made any use of the “Office Space” and notwithstanding the extraordinary cost-shifting provisions in the Office Lease, and notwithstanding the surrender provisions in the Office Lease, Blum and PBM contrived to lure Smithfield to borrow, and the FVP Entities to fund, $1.1 million in improvements and build-out of office space, for which Smithfield had no use, and which solely inured to the benefit of Blum and his companies in the form of substantially improved and more valuable property without business purpose, and thereby misappropriated to himself exorbitant and Page 5 SCHWARTZ | BRESLIN PLLC - ATTORNEYS AT LAW THE DUPONT BUILDING, 169 EAST FLAGLER STREET, SUITE 700, MIAMI, FLORIDA 33131 PRIMARY EMAIL: ESERVICE@JSJB.LAW TELEPHONE: (305) 577-4626 / TELEFAX: (305) 577-4630 / JERRY BRESLIN, ESQ., EMAIL - JB@JSJB.LAW escalating rent payments and a substantial transfer of wealth in the form of capital improvements to the leasehold premises. 36. As a result of Blum’s self-dealing in causing the formation of Smithfield and bringing about the execution of the Office Lease while working both sides of the transaction, the Office Lease was not and is not an arms-length agreement and was in fact an instrument of fraud and is void or voidable. Blum is Justifiably Terminated and Takes Control of the Defrauded Windfall 37. Upon learning of Blum’s duplicity, self-dealing and fraud, Smithfield terminated Blum in early 2020 due to the patent conflicts of interest and misrepresentations concerning The Pitt Building lease, Smithfield’s profitability and its financial condition. 38. Immediately upon Blum’s termination, and without providing adequate notice to Smithfield, PBM declared a default under the Office Lease and filed litigation to recover the premises and duplicative litigation to accelerate and recover rent in excess of $3.3 million. 39. Without making good service on Smithfield, PBM nevertheless obtained a default judgment in its lawsuit for the full amount sought, in excess of $3.3 million. 40. Smithfield only became aware of the lawsuit after judgment had already been entered. In light of the insurmountable judgment amount, accelerating rent for an Office Lease of no benefit to Smithfield, Smithfield filed a petition for bankruptcy protection. 41. That bankruptcy case is now concluded. The trustee expressly abandoned, and Smithfield has the right to pursue, all claims and causes of action against, inter alia, PBM Partners, LLC, Michael Blum, and other entities affiliated with Michael Blum. 42. All conditions precedent have been met or otherwise waived. COUNT I FRAUD AND/OR CONSTRUCTIVE FRAUD Smithfield v. Blum 43. Plaintiff realleges paragraphs 1 through 42 and further alleges: Page 6 SCHWARTZ | BRESLIN PLLC - ATTORNEYS AT LAW THE DUPONT BUILDING, 169 EAST FLAGLER STREET, SUITE 700, MIAMI, FLORIDA 33131 PRIMARY EMAIL: ESERVICE@JSJB.LAW TELEPHONE: (305) 577-4626 / TELEFAX: (305) 577-4630 / JERRY BRESLIN, ESQ., EMAIL - JB@JSJB.LAW 44. Prior to and in or about November 2017, and continuing through the spring of 2020 Defendant Blum made representations to Smithfield about the profitability of the office space lease at The Pitt Building. 45. At the same time Blum failed to tell Smithfield of his conflicts of interest in being the recipient of substantial funds from Smithfield when he had a duty to so inform the company. 46. The representations by Defendant Blum were untrue when made and were an intentional and willful misstatement of fact or facts that Defendant Blum knew or should have known that Plaintiff Smithfield would rely upon to its detriment. 47. Defendant Blum made misrepresentations of material facts, or withheld material facts when under a duty to disclose those facts. 48. Defendant Blum knew or should have known of the statements falsity and knew or should have known that withholding of the truthful material facts would have caused the Plaintiff to act in an opposite manner. 49. Defendant Blum had the intent that the representations would induce Plaintiff Smithfield to rely and act on them. 50. The actions of Defendant Blum constitute fraud and/or constructive fraud. 51. As a direct and proximate result of Defendant Blum’s fraud and/or constructive fraud, Plaintiff Smithfield has been damaged in an amount within the jurisdictional limits of the Court. WHEREFORE, Plaintiff Smithfield demands judgment against Defendant Blum for an amount within the jurisdictional limits of this Court, any other and further injunctive and/or equitable relief as this Court deems just and proper in order to do justice and respectfully reserves the right to amend this complaint to demand punitive damages and join other parties similarly situated if and as required. Page 7 SCHWARTZ | BRESLIN PLLC - ATTORNEYS AT LAW THE DUPONT BUILDING, 169 EAST FLAGLER STREET, SUITE 700, MIAMI, FLORIDA 33131 PRIMARY EMAIL: ESERVICE@JSJB.LAW TELEPHONE: (305) 577-4626 / TELEFAX: (305) 577-4630 / JERRY BRESLIN, ESQ., EMAIL - JB@JSJB.LAW COUNT II CIVIL CONSPIRACY Smithfield v. All Defendants 52. Plaintiff realleges paragraphs 1 through 42 and further alleges: 53. This is an action for conspiracy, seeking damages in excess of $50,000, exclusive of interest, attorneys’ fees and costs. 54. Defendant Blum acted in concert with others known and unknown to the Plaintiff to develop and pursue the scheme to defraud Plaintiff Smithfield into borrowing and delivering sums to the benefit and control of Defendant Blum, and his companies PBM and HPS. 55. Defendant Blum, and his companies PBM and HPS and other conspirators currently unknown to the Plaintiff acted in concert in making material misrepresentations and withholding material information knowing that each had a duty to reveal. 56. Defendant Blum, and his companies PBM and HPS other conspirators currently unknown to the Plaintiff unlawfully combined and conspired among themselves and with others to fraudulently induce Plaintiff Smithfield into transferring substantial sums to the benefit of the co-conspirators. 57. Defendant Blum, and his companies PBM and HPS and other conspirators currently unknown to the Plaintiff have unlawfully combined and conspired among themselves and with others to fraudulently induce Plaintiff Smithfield into delivering millions of dollars to the benefit and control of Defendant Blum, and his companies PBM and HPS. 58. The acts of Defendant Blum, and his companies PBM and HPS constitute a civil conspiracy in violation of Florida law. 59. Defendant Blum has a personal stake in the outcome of the conspiracy with the corporate Defendants which personal stake was more than incidental and motivated by personal bias. 60. As a direct and proximate result of the civil conspiracy to commit fraud and/or constructive fraud, Plaintiff Smithfield has been damaged in an amount within the jurisdictional limits Page 8 SCHWARTZ | BRESLIN PLLC - ATTORNEYS AT LAW THE DUPONT BUILDING, 169 EAST FLAGLER STREET, SUITE 700, MIAMI, FLORIDA 33131 PRIMARY EMAIL: ESERVICE@JSJB.LAW TELEPHONE: (305) 577-4626 / TELEFAX: (305) 577-4630 / JERRY BRESLIN, ESQ., EMAIL - JB@JSJB.LAW of this Court. WHEREFORE, Plaintiff Smithfield demands judgment against Defendant Blum and the corporate Defendants, jointly and severally, for an amount within the jurisdictional limits of this Court, any other and further injunctive and/or equitable relief as this Court deems just and proper in order to do justice and respectfully reserves the right to amend this complaint to demand punitive damages and join other parties similarly situated if and as required. COUNT III FRAUD IN THE INDUCEMENT Smithfield v. PBM 61. Plaintiff realleges paragraphs 1 through 42 and further alleges: 62. Prior to and on or about November 2017, and continuing through the spring of 2020 Defendant Blum made representations to Smithfield about the profitability of the office space lease at The Pitt Building. 63. At the same time Blum failed to tell Smithfield of his conflicts of interest in being the recipient of substantial funds from Smithfield when he had a duty to so inform the company. 64. The representations by Defendant Blum were not true when made and were an intentional and willful misstatement of fact or facts that Defendant Blum knew or should have known that Plaintiff Smithfield would rely upon to its detriment. 65. Defendant Blum made misrepresentations of material facts, or withheld material facts when under a duty to disclose those facts. 66. Defendant Blum knew or should have known of the statements falsity and knew or should have known that withholding of the truthful material facts would have caused the Plaintiff to act in an opposite manner. 67. Defendant Blum had the intent that the representations would induce Plaintiff Smithfield to rely and act on them. 68. In justifiable reliance on the misrepresentations of Defendant Blum and Smithfield entered Page 9 SCHWARTZ | BRESLIN PLLC - ATTORNEYS AT LAW THE DUPONT BUILDING, 169 EAST FLAGLER STREET, SUITE 700, MIAMI, FLORIDA 33131 PRIMARY EMAIL: ESERVICE@JSJB.LAW TELEPHONE: (305) 577-4626 / TELEFAX: (305) 577-4630 / JERRY BRESLIN, ESQ., EMAIL - JB@JSJB.LAW into the Office Lease. 69. But for the intentional and fraudulent misrepresentations of Defendant Blum Plaintiff Smithfield would not have entered into the Office Lease. 70. The Office Lease was fraudulently induced. 71. Plaintiff Smithfield demands a judgment voiding the Office Lease as fraudulently induced. 72. As a direct and proximate result of the fraud in the inducement, Plaintiff Smithfield has been damaged in an amount within the jurisdictional limits of this Court. WHEREFORE, Plaintiff Smithfield demands judgment against Defendant PBM voiding the Office Lease as induced by fraud. COUNT IV BREACH OF FIDUCIARY DUTY Smithfield v. Blum 73. Plaintiff realleges paragraphs 1 through 42 and further alleges: 74. As the Vice President and Project Manager of Smithfield Defendant Blum had a duty of loyalty and a duty to act in the best interests of the company and consistently with the obligation of good faith and fair dealing. 75. There existed a relation of trust and confidence between Defendant Blum and Plaintiff Smithfield where confidence was reposed by Plaintiff Smithfield in Defendant Blum and a trust was accepted by Defendant Blum. 76. The trust in Defendant Blum was intentionally acquired and abused. 77. Defendant Blum had a fiduciary duty to Plaintiff Smithfield. 78. Defendant Blum breached his fiduciary duty to Plaintiff Smithfield. 79. Blum has continuously disregarded and breached his obligations and duties to Plaintiff. 80. Plaintiff has suffered money damages and other damages as a result of Blum’s unlawful conduct, for which it is entitled to compensation herein, which damages include, at a minimum, all rent, additional rent, tenant improvements and other payments and Page 10 SCHWARTZ | BRESLIN PLLC - ATTORNEYS AT LAW THE DUPONT BUILDING, 169 EAST FLAGLER STREET, SUITE 700, MIAMI, FLORIDA 33131 PRIMARY EMAIL: ESERVICE@JSJB.LAW TELEPHONE: (305) 577-4626 / TELEFAX: (305) 577-4630 / JERRY BRESLIN, ESQ., EMAIL - JB@JSJB.LAW expenditures made to or for the benefit of PBM Partners, the total of which exceeds $1.6 million. 81. Blum’s conduct complained of herein was undertaken willfully, intentionally, maliciously, wantonly and with reckless indifference to the rights of Plaintiff. 82. As a direct and proximate result of Defendant Blum’s breach of fiduciary duty, Plaintiff Smithfield has been damaged in an amount within the jurisdictional limits of this court. WHEREFORE, Plaintiff Smithfield demands judgment against Defendant Blum for compensatory damages and consequential damages within the jurisdictional limits of this court arising from the acts of Defendant Blum and such other and further emergency injunctive and/or equitable relief as this Court deems just and proper and reserves the right to amend this pleading to assert a claim for punitive damages. COUNT V UNJUST ENRICHMENT Smithfield v. Blum 83. Plaintiff realleges paragraphs 1 through 42 and further alleges: 84. As the Vice President and Project Manager of Smithfield Defendant Blum had a duty of loyalty and a duty to act in the best interests of the company and consistently with the obligation of good faith and fair dealing. 85. At the request and insistence of Defendant Blum, sums were delivered by Plaintiff Smithfield to Defendants PBM and HPS Blum which accrued to the personal benefit of Defendant Blum as the owner of the Defendant companies. 86. Plaintiff Smithfield has conferred a benefit on Defendant Blum. 87. Defendant Blum both unlawfully orchestrated and has knowledge of the benefit conferred upon him. 88. Defendant Blum has retained the benefit conferred. 89. The circumstances are such that it would be inequitable for Defendant Blum to retain the benefit without Plaintiff Smithfield paying fair value for it. Page 11 SCHWARTZ | BRESLIN PLLC - ATTORNEYS AT LAW THE DUPONT BUILDING, 169 EAST FLAGLER STREET, SUITE 700, MIAMI, FLORIDA 33131 PRIMARY EMAIL: ESERVICE@JSJB.LAW TELEPHONE: (305) 577-4626 / TELEFAX: (305) 577-4630 / JERRY BRESLIN, ESQ., EMAIL - JB@JSJB.LAW WHEREFORE, Plaintiff Smithfield demands judgment against Defendant Blum for an amount within the jurisdictional limits of this Court, any other and further injunctive and/or equitable relief as this Court deems just and proper in order to do justice and respectfully reserves the right to amend this complaint to demand punitive damages and join other parties similarly situated if and as required. COUNT VI RECISSION Smithfield v. PBM 90. Plaintiff realleges paragraphs 1 through 42 and further alleges: 91. Prior to and in or about November 2017, and continuing through the spring of 2020 Defendant Blum made representations to Smithfield about the profitability of the office space lease at The Pitt Building. 92. At the same time Blum failed to tell Smithfield of his conflicts of interest in being the recipient of substantial funds from Smithfield when he had a duty to so inform the company. 93. The representations by Defendant Blum were untrue when made and were an intentional and willful misstatement of fact or facts that Defendant Blum knew or should have known that Plaintiff Smithfield would rely upon to its detriment. 94. Defendant Blum made misrepresentations of material facts, or withheld material facts when under a duty to disclose those facts. 95. Defendant Blum knew or should have known of the statements falsity and knew or should have known that withholding of the truthful material facts would have caused the Plaintiff to act in an opposite manner. 96. Defendant Blum had the intent that the representations would induce Plaintiff Smithfield to rely and act on them. 97. In justifiable reliance on the misrepresentations of Defendant Blum and Smithfield entered into the Office Lease. Page 12 SCHWARTZ | BRESLIN PLLC - ATTORNEYS AT LAW THE DUPONT BUILDING, 169 EAST FLAGLER STREET, SUITE 700, MIAMI, FLORIDA 33131 PRIMARY EMAIL: ESERVICE@JSJB.LAW TELEPHONE: (305) 577-4626 / TELEFAX: (305) 577-4630 / JERRY BRESLIN, ESQ., EMAIL - JB@JSJB.LAW 98. Plaintiff Smithfield demands rescission of the Office Lease. 99. Here the remedy of recission is justified because fraud has been established, and in such a circumstance a court may set aside all transactions founded on it, however they may have been effected, and notwithstanding any contrivance by which it may have been attempted to protect them, and may also treat acts as having been done which ought to have been done, and convert the party who has committed a fraud and profited by it into a trustee for the injured party. WHEREFORE, Plaintiff Smithfield demands judgment voiding and rescinding the Office Lease. COUNT VII ACCOUNTING Smithfield v. Blum 100. Plaintiff realleges paragraphs 1 through 42 and further alleges: 101. This is an action for an accounting. 102. As the Vice President and Project Manager of Smithfield Defendant Blum had duties and responsibilities to the company including a duty of loyalty. 103. The duty of loyalty includes accounting to the limited liability company and holding as trustee for it any property, profit, or benefit derived. 104. Plaintiff demands an accounting of all books and records of the corporate Defendants that received any of the funds of the Plaintiff to determine how those funds were utilized or otherwise transferred. 105. Plaintiff demands an accounting of all books and records of the corporate Defendants that paid any purported interest payments to the Plaintiff to determine the source of those funds. WHEREFORE, Plaintiff Smithfield demands a judgment ordering Defendant Blum to account of all sums taken in and expended during his management of the Plaintiff. Page 13 SCHWARTZ | BRESLIN PLLC - ATTORNEYS AT LAW THE DUPONT BUILDING, 169 EAST FLAGLER STREET, SUITE 700, MIAMI, FLORIDA 33131 PRIMARY EMAIL: ESERVICE@JSJB.LAW TELEPHONE: (305) 577-4626 / TELEFAX: (305) 577-4630 / JERRY BRESLIN, ESQ., EMAIL - JB@JSJB.LAW COUNT VIII DECLARATORY RELIEF Smithfield v. All Defendants 106. Plaintiff realleges paragraphs 1 through 42 and further alleges: 107. This is an action for declaratory relief under Florida Statutes Chapter 86. 108. Plaintiff Smithfield in good faith believes that it has, to date, complied with all conditions precedent to have the Office Lease declared void, voidable or otherwise rescinded. 109. There is a real and present controversy between Plaintiff and Defendants. 110. Substantial legal rights of Plaintiff are involved and require the judicial intervention of this Honorable Court. REQUEST FOR DECLARATORY RELIEF WHEREFORE, Plaintiff respectfully requests that the Court: A. Take jurisdiction over this matter and render a Declaratory Judgment stating that the Plaintiff Smithfield is entitled to have the Office Lease declared void and entering a judgment declaring the Office Lease void. DEMAND FOR TRIAL BY JURY Plaintiff Smithfield demands trial by jury on all issues so triable. Certificate of Service I HEREBY CERTIFY that a true and correct copy of the foregoing document was filed with the Clerk of the Courts and served via email through the Florida Courts eFiling Portal in accordance with Rule 2.516 of the Florida Rules of Judicial Administration upon all counsel of record. On May 31, 2023 Respectfully submitted, Schwartz | Breslin PLLC Fl. Rule of Jud. Admin. 2.516 Notice Primary email: EService@JSJB.LAW Secondary Email: JB@JSJB.LAW Page 14 SCHWARTZ | BRESLIN PLLC - ATTORNEYS AT LAW THE DUPONT BUILDING, 169 EAST FLAGLER STREET, SUITE 700, MIAMI, FLORIDA 33131 PRIMARY EMAIL: ESERVICE@JSJB.LAW TELEPHONE: (305) 577-4626 / TELEFAX: (305) 577-4630 / JERRY BRESLIN, ESQ., EMAIL - JB@JSJB.LAW s/ Jerry Breslin Jerry Breslin Esq. Fla. Bar # 269573 Email: JB@JSJB.Law Schwartz | Breslin, Attorneys at Law The DuPont Building 169 East Flagler Street Suite 700 Miami, Fl 33131 Tel.: 305-577-4626 Fax.: 305-577-4630 /s/ Jonathan Noah Schwartz, Esq. Jonathan Noah Schwartz, Esq. Florida Bar No. 1014596 Email: JS@JSJB.Law Schwartz | Breslin, Attorneys at Law Of Counsel (Motion Pro Hac Vice Forthcoming) Scott M. Hare, Esquire Pa. I.D. No. 63818 share@whitefordlaw.com Whiteford, Taylor & Preston, LLP 11 Stanwix Street, Suite 1400 Pittsburgh, PA 15222 Page 15 SCHWARTZ | BRESLIN PLLC - ATTORNEYS AT LAW THE DUPONT BUILDING, 169 EAST FLAGLER STREET, SUITE 700, MIAMI, FLORIDA 33131 PRIMARY EMAIL: ESERVICE@JSJB.LAW TELEPHONE: (305) 577-4626 / TELEFAX: (305) 577-4630 / JERRY BRESLIN, ESQ., EMAIL - JB@JSJB.LAW EXHIBIT A Exhibit A OFFICE LEASE THIS OFFICE LEASE (this "Lease") made as of the 28th day of December, 2017, by and between PBM PARTNERS, LLC, a Florida limited liability company ("Landlord"), and FVP SMITHFIELD LLC, a Delaware limited liability company ("Tenant"). For the purposes collectively, as the "Parties". of this. Lease, Landlord and Tenant are sometimes referred to, individually, as a "�" and, 1. DEFINITIONS As used in this Lease, the following terms shall have the meanings set forth below or in the Section of this Lease referred to, unless the context otherwise requires: ACMs: As defined in Section 12.1. l. ADA: As defined in Section 9.2. Additional Rent: As defined in Section 5.1. Bankruptcy Code: As defined in Section 15.1. Base Rent: As defined in Section 4.1.2. Building: As defined in Section 2.1. Casualty: As defined in Section 18.1. CERCLA: As defined in Section 24.1.1. Commencement Date: As defined in Section 3.1.1. Common Areas: As defined in Section 13.1. Environmental Laws: As defined in Section 24.1.1. Event of Default: As defined in Section 19.1. Fair Market Rental Rate: As defined in Section 4.1.2. Final Walk-Through: As defined in Section 17.2. First Lease Year: As defined in Section 3.1.1. Force Majeure: As defined in Section 25.1. !B3504684.2} Hazardous Substances: As defined in Section 24.1.2. HSCA: As defined in Section 24.1.2. Initial Term: As defined in Section 3.1.1. Initial Term Base Rent: As defined in Section 4.1.1. Late Rate: As defined in Section 4.4. Laws: As defined in Section 9.1. Leased Premises: As defined in Section 2.1. Manager: As defined in Section 10.3. Mold Conditions: As defined in Section 11.3.1. Obligation: As defined in Section 25.6. Permitted Use: As defined in Section 8.1. Punch List Items: As defined in Section 17.2. RCRA: As defined in Section 24.1.1. Removal Notice Period: As defined in Section 8.3. Renewal Notice: As defined in Section 3.2.2. Renewal Term: As defined in Section 3.2.1. Renewal Term Base Rent: As defined in Section 4.1.2. Rent: As defined in Section 5.1. Taxes: As defined in Section 6.1. Tenant Improvement Allowance: As defined in Section 12.2 Tenant's Improvements: As defined in Section 12.1. Tenant's Initial Improvements: As defined in Section 12.1. Tenant's Personal Property: As defined in Section 8.3. (B3504684.2l 2 Tenn: As defined in Section 3.1.1. Termination Date: As defined in Section 3.1.1. 2. PREMISES. 2.1 Description. The "Leased Premises" consist of a space containing approximately 16,358 square feet on the second floor of that building known as the Pitt Building, located on Smithfield Street in the City of Pittsburgh, Allegheny County, Pennsylvania currently referenced as Block and Lot Number 1-M-176 in the Allegheny County Office of Property Assessments, as well as the second floor of the warehouse located at 340 3rd Avenue, Pittsburgh, PA 15222 and currently referenced as Block and Lot No. 1-H-384 in the Allegheny County Office of Property Assessments (collectively, the "Building"). The area of the Leased Premises is subject to remeasurement within ninety (90) days after the Commencement Date (as defined in Section3.1.1), which remeasurement shall occur at Landlord's discretion in accordance with BOMA standards. The legal description of the land on which the Building is located is attached hereto and incorporated herein as Exhibit A. A drawing depicting the Leased Premises is attached hereto and incorporated herein as Exhibit B. 2.2 Demise. For and in consideration of payment of the Rent (as defined in Section 5.3) and performance of other obligations hereunder and intending to be legally bound, Landlord does hereby lease and demise unto Tenant and Tenant does hereby lease and take from Landlord the Leased Premises. No personal property or equipment of Landlord shall be part of the Leased Premises. The Leased Premises shall be vacant and not subject to occupancy or termination of an existing tenant. Landlord shall deliver the Leased Premises in a "vanilla box" condition and in compliance with applicable Law. Except for any Tenant's Improvements to the Leased Premises described in Section 12.1 or as otherwise provided in this Lease, Tenant hereby accepts the Leased Premises in its "AS IS, WHERE IS" condition "WlTH ALL FAULTS''. 2.3 Intentionally Left Blank. 3. TERM. 3.1 Initial Term. 3.1.1 Commencement/Termination. The initial term of this Lease (the "Initial Term") shall commence on the earlier of the completion of Tenant's Initial Improvements (as defined in Section 12.1) or June 15, 2018 ("Commencement Date"), and shall expire as of 11 :59 P.M. on the last day of the month which is ten (10) years after the Commencement Date. The Initial Tenn and the Renewal Tenn are sometimes hereinafter collectively referred to as the "Term." For the purposes of this Lease, the "First Lease Year" shall mean the first twelve (12) calendar months of the Initial Tenn. The "Termination Date" shall be the last day of the Initial Term or the last day of the Renewal Term, as applicable. (835046114.2) 3 3.1.2 Intentionally Left Blank. 3.2 Renewal Term. 3.2.l Option. Tenant shall have the option to renew this Lease for one (1) additional term of five (5) years following expiration of the Initial Term (the "Renewal Term"), provided: (i) that this Lease is in full force and effect immediately prior to the date of the commencement of such Renewal Term; and (ii) that there is no Event of Default existing either at the time of the commencement of such Renewal Term or at the time that Landlord receives the Renewal Notice (as defined below). 3.2.2 Exercise. Such option shall be exercised by Tenant serving on Landlord written notice to that effect not later than one hundred eighty (180) days prior to the expiration of the Initial Term (the "Renewal Notice"). The Renewal Notice given by Tenant shall constitute an agreement between the Parties for a renewal of this Lease. If Tenant fails to exercise its renewal option within such time period, Tenant shall be deemed to have waived its right to the Renewal Term. If this Lease or the right of occupancy of Tenant hereunder shall have expired or come to an end pursuant to any of the provisions of this Lease, all rights of Tenant to the Renewal Term shall be deemed terminated automatically. Additionally, if and to the extent that the Tenant's obligations under this Lease are guaranteed by a third party, then, as a condition to Tenant's right to the Renewal Term, such guarantor(s) must reaffirm their guaranty in the form and substance reasonably required by Landlord at such time. Notwithstanding anything in Section 3.2. l to the contrary, in the event that Tenant provides Landlord with a Renewal Notice and one or both of the conditions set forth as (i) and (ii) in Section 3.2.l has not been satisfied, then Landlord shall have the right (but not the obligation) to waive such conditions and accept the Renewal Notice, in which case the Renewal Notice shall be deemed effective and the Renewal Term shall commence as if such conditions had been satisfied. 3.2.3 Terms. Said renewal shall be upon the same terms, covenants, conditions and limitations as provided in this Lease, except that the Renewal Term Base Rent shall be as set forth in Section 4.1.2, there shall be no additional Tenant Improvement Allowance. 3.3. Holdover. The Parties recognize and agree that the damage to Landlord resulting from any failure by Tenant to timely surrender possession of the Leased Premises will be substantial, will exceed the amount of the monthly installments of the Rent payable hereunder, and will be impossible to measure accurately. Tenant's occupancy subsequent to such expiration or termination, whether or not with the consent or acquiescence of Landlord, shall be deemed to be that of a tenancy-at-will and in no event from month-to-month or from year-to-year, and it shall be subject to all terms, covenants, and conditions of this Lease applicable thereto, including, without limitation, those set forth in this holdover provision. In the event that Tenant defaults or remains in possession of the Leased Premises or any part thereof after the expiration of the tenancy-at-will created hereby then Tenant's occupancy shall be deemed a tenancy-at-sufferance and not a tenancy-at-will. Unless Landlord provides written notice to Tenant indicating {B3504684.2) 4 otherwise, Tenant agrees that if possession of the Leased Premises is not surrendered to Landlord upon the Termination Date or sooner termination of the Lease, in addition to any other rights or remedies Landlord may have hereunder or at law, Tenant shall pay to Landlord, as liquidated damages, for each month and for each portion of any month during which Tenant holds over in the Leased Premises after the Termination Date or sooner termination of this Lease, a sum equal to two hundred percent (200%) of the Base Rent (or Renewal Term Base Rent as the case may be) that was payable under thi