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FILED: NASSAU COUNTY CLERK 07/05/2023 02:55 PM INDEX NO. 610559/2023
NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 07/05/2023
NARRATIVE STATEMENT
From: Robert Kleiber
To: Mediation and Civil Arbitration, Inc.
Re: Claim of The LCF Group, Inc. against Curry N Grill LLC DBA BD International Market AKA
Halal China Bistro AKA Curry N Grill, Busy Bee Wings & Grill LLC, Syed Monoar LLC and
Syed Monowar
Dated: May 19, 2023
---------------------------------------------------------------------------------------------------------------------
State of New York }
} ss.
County of Nassau }
Robert Kleiber, Being duly sworn deposed says the following under the following under the
penalties of perjury:
1. I am the Chief Financial Officer for The LCF Group, Inc. (“LCF”), claimant
in this proceeding, and as such am fully familiar with the facts and circumstances
surrounding this matter. Except those stated “upon information and belief” and as to those, I
believe them to be true based upon a review of my office records.
2. I offer the instant sworn statement in support of claimant’s claims in this
arbitrational proceeding.
3. This matter concerns a merchant cash advance transaction entered into
among LCF and Curry N Grill LLC DBA BD International Market AKA Halal China Bistro
AKA Curry N Grill (“Merchant”) via a written agreement dated February 21, 2023,
annexed hereto as Exhibit 1 (the “Agreement”).
4. On or about February 21, 2023, Merchant and LCF entered into the
Agreement for the purchase and sale of future receivables whereby LCF agreed to purchase
a certain percentage of Merchant’s future receivables and sales proceeds having a face value
FILED: NASSAU COUNTY CLERK 07/05/2023 02:55 PM INDEX NO. 610559/2023
NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 07/05/2023
of $62,100.00 (the “Purchased Amount”). The purchase price for these receivables was
$45,000.00 (the “Purchase Price”) which was remitted (less origination fees as provided
within the Agreement) on or about February 21, 2023 (Exhibit 2 – Proof of Funding). Busy
Bee Wings & Grill LLC, Syed Monoar LLC and Syed Monowar (“Guarantors”) signed the
agreement as authorized representatives of Merchant.
5. The agreement provided, among other things, that merchant was obligated to
deposit all of merchant’s daily sales proceeds into a designated business account and that
LCF would obtain its specified percentage of merchant’s daily sales proceeds (the Specified
Percentage”) until such time that LCF received the full Purchased Amount.
6. The Merchant Cash Advance (“MCA”) industry – part of the larger
“Fintech” sector is an important source of funds for Small Businesses Capital throughout
the United States1. Fintech leverages technological advancements to expand the availability
of capital to businesses previously shut out for the conventional banking products after the
financial crisis of 2008. Accordingly, businesses that might otherwise be foreclosed from
traditional sources of capital have increasingly turned to Merchant Cash Advanced
(“MCA”) as a means of expanding and supporting their businesses.
7. MCA is not a recourse product – rather, a merchant sells a percentage of its
future receivables for a discounted present value. The MCA entity typically recovers its
percentage of sales through regular ACH debits which, initially, are estimated as a
percentage of average revenues prior to the funding. The dollar amount tied to such
percentage is adjustable upon a merchant’s request and a reduction in a merchant’s revenues
directly correlate to a reduction in remittances. As a result, the length of time for the MCA
1
See Generally https://www.commercialfinancecoalition.com/our-mission/ and
https://www.tgdaily.com/what-is-a-merchant-cash-advance-and-is-it-a-good-choice-for-your-business
FILED: NASSAU COUNTY CLERK 07/05/2023 02:55 PM INDEX NO. 610559/2023
NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 07/05/2023
funder to receive its percentage of future sales is indefinite. For example, assuming a
purchased percentage of 15% of daily sales, if a merchant’s daily revenues were averaging
$100.00, the MCA funder would be entitled to receive $15.00 ($100.00 x 0.15 = $15.00). If
those revenues were to drop to $10.00, the MCA funder would be entitled to receive $1.50
($10.00 x 0.15 = $1.50).
8. To safeguard against remittances in excess of the agreed upon percentage of
daily sales, the Purchase and Sale of Future Receivables Agreement (“PSFRA”) contains a
reconciliation provision which invites a Merchant to document its monthly sales in order to
ensure that monthly remittances to Respondent do not exceed the Specified Percentage of
revenues and remittances in excess of the purchased percentage are returned to the
Merchant. Moreover, a cessation of business operations, bankruptcy, or other insolvency
does not constitute an event of default. The contract between the parties clearly provides
that so long as a Merchant complies with the contract’s notification requirements, recovery
of Respondent’s purchased receivables can extend indefinitely and, indeed, in the event of a
cessation of business operations, may never occur at all.
9. LCF materially relied upon Merchant’s covenants, representations, and
warranties set forth in the Agreement, and the guaranty of performance thereon, as a
consideration of its entering into the Agreement with Merchant. The Agreement provides
that a breach of those covenants, representations, or warranties set forth in the Agreement
constitutes a default thereunder.
10. In addition, Guarantor executed a personal performance guaranty of
Merchant would not breach the Agreement. Which provides, inter alia, that Guarantor
would be liable in the event that Merchant interfered or otherwise breached performance
obligations thereby frustrating LCF’s collection of its Specified Percentage of merchant’s
daily sales proceeds.
FILED: NASSAU COUNTY CLERK 07/05/2023 02:55 PM INDEX NO. 610559/2023
NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 07/05/2023
11. On or about May 3, 2023, Merchant breached its obligations under the
Agreement by frustrating Claimant’s access to draw upon its Specified Percentage of
receivables by stopping ACH debits to be drawn from a predesignated bank account (R08)2.
Additionally, Merchant failed to meet its obligations under Section III of the Agreement.
12. As of May 3, 2023 (See Exhibit 3 – Payment History) Merchant has
continuously failed to meet its obligations. There remains a balance due and owing to LCF
of $40,555.05, exclusive of attorneys’ fees, Default Fees, and interest.
13. Given the various liquidated default provisions contained within the
agreement, Merchant presently owes to LCF the sum of $40,555.05 together with Default
Fees of $5,070.00, and counsel fees of 33% of the original balance in the sum of
$13,517.00. All told, Merchant and Guarantor presently owe LCF the sum of $59,142.05.
WHEREFORE, Claimant respectfully prays for an award of $59,142.05 against Curry
N Grill LLC DBA BD International Market AKA Halal China Bistro AKA Curry N Grill, Busy
Bee Wings & Grill LLC, Syed Monoar LLC and Syed Monowar as set forth herein plus interest
from May 3, 2023 together with such other and further relief as to which this honorable tribunal
deems just and proper.
So sworn before me on
Respectfully Submitted,
May 19, 2023
Notary Public _________________________
Robert Kleiber
Adam Jason Feldman, Notary Public Chief Financial Officer
State of New York The LCF Group, Inc.
No. 02FE6001199 rkleiber@thelcfgroup.com
Qualified in Nassau County
Commission Expires 01/05/2026
2
See Generally https://www.actumprocessing.com/understanding-ach-return-codes/
Preview
FILED: NASSAU COUNTY CLERK 07/05/2023 02:55 PM INDEX NO. 610559/2023 NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 07/05/2023 NARRATIVE STATEMENT From: Robert Kleiber To: Mediation and Civil Arbitration, Inc. Re: Claim of The LCF Group, Inc. against Curry N Grill LLC DBA BD International Market AKA Halal China Bistro AKA Curry N Grill, Busy Bee Wings & Grill LLC, Syed Monoar LLC and Syed Monowar Dated: May 19, 2023 --------------------------------------------------------------------------------------------------------------------- State of New York } } ss. County of Nassau } Robert Kleiber, Being duly sworn deposed says the following under the following under the penalties of perjury: 1. I am the Chief Financial Officer for The LCF Group, Inc. (“LCF”), claimant in this proceeding, and as such am fully familiar with the facts and circumstances surrounding this matter. Except those stated “upon information and belief” and as to those, I believe them to be true based upon a review of my office records. 2. I offer the instant sworn statement in support of claimant’s claims in this arbitrational proceeding. 3. This matter concerns a merchant cash advance transaction entered into among LCF and Curry N Grill LLC DBA BD International Market AKA Halal China Bistro AKA Curry N Grill (“Merchant”) via a written agreement dated February 21, 2023, annexed hereto as Exhibit 1 (the “Agreement”). 4. On or about February 21, 2023, Merchant and LCF entered into the Agreement for the purchase and sale of future receivables whereby LCF agreed to purchase a certain percentage of Merchant’s future receivables and sales proceeds having a face value FILED: NASSAU COUNTY CLERK 07/05/2023 02:55 PM INDEX NO. 610559/2023 NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 07/05/2023 of $62,100.00 (the “Purchased Amount”). The purchase price for these receivables was $45,000.00 (the “Purchase Price”) which was remitted (less origination fees as provided within the Agreement) on or about February 21, 2023 (Exhibit 2 – Proof of Funding). Busy Bee Wings & Grill LLC, Syed Monoar LLC and Syed Monowar (“Guarantors”) signed the agreement as authorized representatives of Merchant. 5. The agreement provided, among other things, that merchant was obligated to deposit all of merchant’s daily sales proceeds into a designated business account and that LCF would obtain its specified percentage of merchant’s daily sales proceeds (the Specified Percentage”) until such time that LCF received the full Purchased Amount. 6. The Merchant Cash Advance (“MCA”) industry – part of the larger “Fintech” sector is an important source of funds for Small Businesses Capital throughout the United States1. Fintech leverages technological advancements to expand the availability of capital to businesses previously shut out for the conventional banking products after the financial crisis of 2008. Accordingly, businesses that might otherwise be foreclosed from traditional sources of capital have increasingly turned to Merchant Cash Advanced (“MCA”) as a means of expanding and supporting their businesses. 7. MCA is not a recourse product – rather, a merchant sells a percentage of its future receivables for a discounted present value. The MCA entity typically recovers its percentage of sales through regular ACH debits which, initially, are estimated as a percentage of average revenues prior to the funding. The dollar amount tied to such percentage is adjustable upon a merchant’s request and a reduction in a merchant’s revenues directly correlate to a reduction in remittances. As a result, the length of time for the MCA 1 See Generally https://www.commercialfinancecoalition.com/our-mission/ and https://www.tgdaily.com/what-is-a-merchant-cash-advance-and-is-it-a-good-choice-for-your-business FILED: NASSAU COUNTY CLERK 07/05/2023 02:55 PM INDEX NO. 610559/2023 NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 07/05/2023 funder to receive its percentage of future sales is indefinite. For example, assuming a purchased percentage of 15% of daily sales, if a merchant’s daily revenues were averaging $100.00, the MCA funder would be entitled to receive $15.00 ($100.00 x 0.15 = $15.00). If those revenues were to drop to $10.00, the MCA funder would be entitled to receive $1.50 ($10.00 x 0.15 = $1.50). 8. To safeguard against remittances in excess of the agreed upon percentage of daily sales, the Purchase and Sale of Future Receivables Agreement (“PSFRA”) contains a reconciliation provision which invites a Merchant to document its monthly sales in order to ensure that monthly remittances to Respondent do not exceed the Specified Percentage of revenues and remittances in excess of the purchased percentage are returned to the Merchant. Moreover, a cessation of business operations, bankruptcy, or other insolvency does not constitute an event of default. The contract between the parties clearly provides that so long as a Merchant complies with the contract’s notification requirements, recovery of Respondent’s purchased receivables can extend indefinitely and, indeed, in the event of a cessation of business operations, may never occur at all. 9. LCF materially relied upon Merchant’s covenants, representations, and warranties set forth in the Agreement, and the guaranty of performance thereon, as a consideration of its entering into the Agreement with Merchant. The Agreement provides that a breach of those covenants, representations, or warranties set forth in the Agreement constitutes a default thereunder. 10. In addition, Guarantor executed a personal performance guaranty of Merchant would not breach the Agreement. Which provides, inter alia, that Guarantor would be liable in the event that Merchant interfered or otherwise breached performance obligations thereby frustrating LCF’s collection of its Specified Percentage of merchant’s daily sales proceeds. FILED: NASSAU COUNTY CLERK 07/05/2023 02:55 PM INDEX NO. 610559/2023 NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 07/05/2023 11. On or about May 3, 2023, Merchant breached its obligations under the Agreement by frustrating Claimant’s access to draw upon its Specified Percentage of receivables by stopping ACH debits to be drawn from a predesignated bank account (R08)2. Additionally, Merchant failed to meet its obligations under Section III of the Agreement. 12. As of May 3, 2023 (See Exhibit 3 – Payment History) Merchant has continuously failed to meet its obligations. There remains a balance due and owing to LCF of $40,555.05, exclusive of attorneys’ fees, Default Fees, and interest. 13. Given the various liquidated default provisions contained within the agreement, Merchant presently owes to LCF the sum of $40,555.05 together with Default Fees of $5,070.00, and counsel fees of 33% of the original balance in the sum of $13,517.00. All told, Merchant and Guarantor presently owe LCF the sum of $59,142.05. WHEREFORE, Claimant respectfully prays for an award of $59,142.05 against Curry N Grill LLC DBA BD International Market AKA Halal China Bistro AKA Curry N Grill, Busy Bee Wings & Grill LLC, Syed Monoar LLC and Syed Monowar as set forth herein plus interest from May 3, 2023 together with such other and further relief as to which this honorable tribunal deems just and proper. So sworn before me on Respectfully Submitted, May 19, 2023 Notary Public _________________________ Robert Kleiber Adam Jason Feldman, Notary Public Chief Financial Officer State of New York The LCF Group, Inc. No. 02FE6001199 rkleiber@thelcfgroup.com Qualified in Nassau County Commission Expires 01/05/2026 2 See Generally https://www.actumprocessing.com/understanding-ach-return-codes/