Preview
FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022
NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023
Exhibit 52
FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022
NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023
Exhibit 17
FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022
NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023
FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022
NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023
FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022
NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023
FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022
NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023
FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022
NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023
FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022
NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023
Exhibit 53
FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022
NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023
Exhibit 18
FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022
NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023
FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022
NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023
Exhibit 54
FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022
NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023
1
1 SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK: CIVIL TERM: PART 3
2 - - - - - - - - - - - - - - - - - - - - - - - -X
MARCUS ABRAMS and LISA ABRAMS,
3
Petitioners,
4
INDEX NUMBER:
5 658845/2021
- against -
6
RUSSELL ABRAMS, SANDRA ABRAMS and WEST 70TH
7 OWNERS CORP,
8 Respondents.
- - - - - - - - - - - - - - - - - - - - - - - -X
9 VIA MICROSOFT TEAMS
July 15, 2022
10 BEFORE:
HONORABLE JOEL M. COHEN
11 Justice of the Supreme Court
APPEARANCES:
12
KIM & SERRITELLA, LLP.
13 Attorney for the Petitioners
110 West 40th Street, 10th floor
14 New York, New York 10018
BY: JAMES R. SERRITELLA, ESQ.
15
16
TUTTLE YICK, LLP.
17 Attorney for the Respondents
352 Seventh Avenue, 14th floor
18 New York, New York 10001
BY: DAVID G. SKILLMAN, ESQ.
19
20
21
22
CHARLENE FOUNTALIOTIS-SQUIRES
23 SENIOR COURT REPORTER
24
25
Charlene Fountaliotis-Squires, Senior Court Reporter
FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022
NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023
2
PROCEEDINGS
1 THE COURT: Index number 658845 of 2021 in the
2 matter of Marcus Abrams and Lisa Abrams, Petitioners against
3 Russell Abrams, Sandra Abrams and West 70th Owners Corp.
4 Start with appearances, beginning with the
5 Petitioners Marcus and Lisa Abrams.
6 MR. SERRITELLA: Good afternoon, your Honor.
7 James Serritella, from Kim and Serritella, LLP, on
8 behalf of the Petitioners. Also, your Honor, I have with
9 me Justin Stone. His application for admission to New York
10 is actually pending. I'm going to be doing all the
11 speaking. Would it be okay if he accompanies me at the
12 Counsel table?
13 THE COURT: Yes.
14 MR. SERRITELLA: Thank you very much.
15 THE COURT: For the Respondents, Mr. and Ms. Abrams
16 and West 70th Owners.
17 MR. SKILLMAN: For the Respondent, David Skillman,
18 of Tuttle Yick, because there's a pending motion to be
19 relieved as Counsel, Mr. Russell Abrams who is an individual
20 Respondent is here as well. And I would also like to add,
21 your Honor, in connection with this TRO application, we
22 would like to advance the Order to Show Cause on the
23 application to be relieved as Counsel given that everyone is
24 here today including Mr. Abrams. That motion is currently
25 returnable on Friday but I think it makes sense to deal with
Charlene Fountaliotis-Squires, Senior Court Reporter
FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022
NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023
3
PROCEEDINGS
1 it today.
2 THE COURT: Just one thing, Mr. Abrams and Ms.
3 Abrams can obviously appear Pro Se but West 70th owners Corp
4 cannot.
5 MR. SKILLMAN: Which is why, your Honor, I propose
6 that we put off this TRO application for a very short
7 period, a week in exchange, that will give Mr. Abrams and
8 West 70th Corp -- Owners Corp time to retain new Counsel.
9 And in the meantime the Respondents will agree that they
10 will not be, you know, transferring ownership of this entity
11 anywhere. They will not encumber the property any further.
12 We're not asking for much time, just another week for him to
13 get Counsel and appear for this TRO.
14 THE COURT: Okay, let me let Mr. Serritella --
15 RUSSELL ABRAMS: My name is Russell Abrams. My wife
16 did not receive the Teams link to appear. She is traveling
17 tomorrow but she could have appeared virtually. As he
18 said, we have hired new Counsel, we don't have any
19 confidence -- there's a lot of statements that have been
20 made, so all I ask is for an adjournment from our attorneys
21 so they could properly retain us.
22 THE COURT: Have you hired new Counsel?
23 RUSSELL ABRAMS: Yes, we have signed the agreements
24 just now, Jaffe Asher will be the law firm.
25 THE COURT: And is there a reason why they couldn't
Charlene Fountaliotis-Squires, Senior Court Reporter
FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022
NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023
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PROCEEDINGS
1 be here today?
2 RUSSELL ABRAMS: Because I have -- given the
3 complexity, the amount of money people are asking about, I
4 think it is pretty important we have reputable competent
5 Counsel, that's why I actually have to talk to attorneys to
6 make sure we have an attorney that could represent the
7 proper thing. This is --
8 THE COURT: No, I understand.
9 RUSSELL ABRAMS: -- this is an unbelievable amount
10 of money, sir, and we have to have a proper attorney for it.
11 THE COURT: No, I'm not explaining myself well.
12 If you have chosen new attorneys, I recommend and basically
13 this happens a lot, what would happen typically is that the
14 new attorneys would sit there and say, look, Judge, we just
15 got here, we need time to get up to speed and whatever but
16 they would normally be sitting here.
17 RUSSELL ABRAMS: Would you like them to contact you
18 later this afternoon or something?
19 They were in the car driving when I spoke to them
20 earlier today, that's why.
21 THE COURT: Well, let me hear --
22 RUSSELL ABRAMS: I could give you names or the law
23 firm, everything.
24 THE COURT: What's the name of the firm?
25 RUSSELL ABRAMS: Jaffe and Asher.
Charlene Fountaliotis-Squires, Senior Court Reporter
FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022
NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023
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PROCEEDINGS
1 THE COURT: Okay.
2 And an individual name?
3 RUSSELL ABRAMS: Hold on, I will give you the two
4 attorneys?
5 MR. SKILLMAN: To fill in the gaps here, he says
6 they -- Mr. Abrams retained his new Counsel today, so --
7 THE COURT: No, I understand. To resolve your
8 current Counsel's problem, you can -- I'm happy to do this
9 either way, you can just do a substitution of Counsel, you
10 don't need an order, but I will grant the withdrawal but I
11 would prefer for there not be a gap in time and rather just
12 have either a substitution of Counsel, which is just a form
13 you just submit and do. You don't need my approval for.
14 MR. SKILLMAN: I'm aware of that. I didn't know
15 Counsel was retained.
16 RUSSELL ABRAMS: Marshall Potashner and Greg
17 Galterio.
18 THE COURT: I think Ms. Abrams has joined the Teams
19 call by the way.
20 Okay. I understand everybody's positions, so, Mr.
21 Serritella, why don't you start with the question of whether
22 a temporary restraining order, along with some time would be
23 sufficient.
24 MR. SERRITELLA: Well, your Honor, I think it is
25 Petitioners position that we should proceed today with the
Charlene Fountaliotis-Squires, Senior Court Reporter
FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022
NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023
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PROCEEDINGS
1 TRO hearing. Our papers were -- our papers were filed.
2 THE COURT: Just for the record, Ms. Abrams, I
3 think you can -- can you now hear us, Ms. Abrams?
4 SANDRA ABRAMS: Yes. Hi. Good afternoon.
5 THE COURT: Good afternoon.
6 MR. SERRITELLA: Let me start again. It is
7 Petitioners position that we should proceed with the hearing
8 as scheduled today. Our papers were filed over a week ago.
9 Mr. Russell Abrams and Ms. Sandra Abrams have had plenty of
10 time to get replacement Counsel, so we don't think it would
11 be fair to the Petitioners given the circumstances of what
12 is at issue today to delay this any further. There's a
13 real urgent need to have some restrictions put on this
14 property and we believe that the TRO hearing should proceed.
15 THE COURT: I heard it anyway. The plan was to put
16 restrictions in place today, maybe not 100 percent of the
17 one's that you are asking for ultimately, which we will get
18 to shortly, but it wasn't terribly yet spelled out but some
19 sort of a standstill would remain in place according to at
20 least what I heard.
21 MR. SERRITELLA: Well, I guess maybe it is a
22 question I would have, your Honor, would the Respondents
23 stipulate to our proposed order, the Order to Show Cause and
24 have, your Honor, enter the order.
25 THE COURT: Well, if what they are seeking is more
Charlene Fountaliotis-Squires, Senior Court Reporter
FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022
NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023
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PROCEEDINGS
1 time to respond to the Order to Show Cause, I kind of
2 assumed not --
3 MR. SERRITELLA: But that's --
4 THE COURT: -- maybe I should go back to Mr. Abrams
5 and/or Counsel as part of this request for more time to
6 permit the Jaffe firm to step in, it sounded like you were
7 agreeing to some sort of a standstill of sorts and what
8 would that entail?
9 RUSSELL ABRAMS: We had agreed not to sell the home
10 at all without them being notified seven days in advance of
11 the existing order. None of that has changed.
12 THE COURT: Now, I had heard somewhere that the
13 property had been at least potentially transferred to a
14 different entity; is that correct?
15 RUSSELL ABRAMS: The cooperative is being issued a
16 new certificate of occupancy by the Department of Buildings.
17 We have gone into the, you know, the owners of the
18 proprietary leases, so it was -- been put into the name,
19 which is the same people as West 70th Owners Corp. It was
20 not sold.
21 SANDRA ABRAMS: And we have agreed --
22 RUSSELL ABRAMS: Wait.
23 SANDRA ABRAMS: -- we have --
24 RUSSELL ABRAMS: Please wait. Please do not --
25 THE COURT: One at a time.
Charlene Fountaliotis-Squires, Senior Court Reporter
FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022
NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023
8
PROCEEDINGS
1 RUSSELL ABRAMS: -- please wait.
2 So we're not selling the house. The house is
3 listed for sale but it hasn't been sold. There's been no
4 contract accepted and we agreed to maintain the current
5 status quo. That's not going to change.
6 THE COURT: So that order still is in place
7 already, right?
8 MR. SERRITELLA: It is, your Honor. But let me
9 just respond to that. The property has been transferred in
10 violation of, your Honor's, order into a new entity.
11 THE COURT: What new entity?
12 MR. SERRITELLA: It is Sepi Realty, LLC. It is
13 plain as day the order has been violated. The Respondents
14 were not supposed to transfer the property and they did.
15 And I can get into the circumstances around that transfer
16 which are very suspicious. I will hold off on that for now.
17 THE COURT: Just curious, the prior orders said
18 that it were transfers or sale?
19 RUSSELL ABRAMS: It said sale.
20 THE COURT: I thought the language might be --
21 MR. SERRITELLA: Let's look --
22 RUSSELL ABRAMS: Sale is what it said. They were
23 actually notified about this. That's --
24 SANDRA ABRAMS: We didn't sell, we transferred
25 because --
Charlene Fountaliotis-Squires, Senior Court Reporter
FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022
NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023
9
PROCEEDINGS
1 THE COURT: Ms. Abrams --
2 MR. SERRITELLA: Your Honor --
3 THE COURT: This is not the way Court proceedings
4 work. It is going to be one at a time. And when I ask
5 for a party to respond, I will do so. Right now I'm talking
6 to Mr. Serritella.
7 MR. SERRITELLA: Your Honor, the order talks about a
8 sale and encumbering the property. That deed that we
9 submitted in our papers shows that there was a sale. There
10 was a sale from one entity, which is the West 70th Corp to
11 West 70th Owners Corp into Sepi Realty.
12 THE COURT: What was the consideration?
13 MR. SERRITELLA: It says $10.00.
14 THE COURT: Well, look, at a minimum we are going
15 to have to extend the order to include the current owner,
16 otherwise the order has no significance.
17 MR. SERRITELLA: That's a grave concern for us too,
18 your Honor.
19 THE COURT: Well, I would be surprised, I guess,
20 if, Mr. Abrams, or, Ms. Abrams, you would disagree with
21 that, because unless we do that, everything you just said
22 about a standstill is meaningless. It has to apply to the
23 entity that actually holds the shares.
24 RUSSELL ABRAMS: Your Honor, they were notified of
25 this before. This was never an issue.
Charlene Fountaliotis-Squires, Senior Court Reporter
FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022
NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023
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PROCEEDINGS
1 THE COURT: I'm now buying or not buying the
2 argument that transferring it was in violation of the order.
3 Put that aside for the moment. If the property is in the
4 hands of this other entity now for whatever reason, the
5 prior order has to apply to that entity or else it has no
6 effect.
7 RUSSELL ABRAMS: As I said, your Honor, we told them
8 that before. We were fine with that. That's why this is
9 just a giant amount of effort on stuff we had told them we
10 had no issue with.
11 THE COURT: Okay, the other part of this you wanted
12 to increase the amount of the holdback on the sale and maybe
13 you can explain that to me.
14 MR. SERRITELLA: Sure, your Honor, I could get into
15 that briefly, I will state that this case in arbitration is
16 by and large over. The issue that remains is the amount of
17 damages. We included this as Exhibit 11 in my affirmation,
18 your Honor. The arbitrator issued a summary judgment
19 ruling in favor of the claimants in the arbitration. He
20 rejected completely this conversion argument, which I'm
21 sure, your Honor, probably remembers from back December and
22 January, have no merit to it whatsoever. As a matter of
23 fact the arbitrator said quote on page seven Respondents
24 submissions failed to even approach the -- approach the
25 showing needed to create an issue of fact as to whether
Charlene Fountaliotis-Squires, Senior Court Reporter
FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022
NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023
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PROCEEDINGS
1 there was a conversion of a debt investment into Russell
2 Carr is an equity. And so the arbitrator made it very
3 clear in his ruling that their sole defense has no merit
4 whatsoever. He also pointed how out Mr. Russell Abrams made
5 a number of inconsistent statements and frankly, your Honor,
6 his credibility is very much called into question in all of
7 these proceedings and we have gone into depth with this in
8 our papers here and our papers with the arbitrator. There
9 have been a number of statements under oath that have been
10 made that have proven to be false. That have been
11 completely contradicted by the documentary evidence. And
12 so we have reason to question anything that Mr. Russell
13 Abrams says even to the Court today, your Honor. And so
14 our concern, which is a legitimate concern, is that the
15 circumstances under which this transfer was made in April
16 and recorded over a month later, let me just tell, your
17 Honor, what happened during that month, we had submissions
18 to the arbitrator on summary judgment. On May 1st the
19 arbitrator held an oral argument on the summary judgment
20 motions -- I'm sorry, May 5th. He made it very clear at
21 that hearing that he was inclined to rule in favor of the
22 claimants on this conversion issue. Low and behold 2 weeks,
23 3 weeks later, there's a recording of a transfer from one
24 entity that's seemingly solely owned by Russell and Sandra
25 to another entity that is seemingly wholly owned by Russell
Charlene Fountaliotis-Squires, Senior Court Reporter
FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022
NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023
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PROCEEDINGS
1 and Sandra with some offshore affiliates. It is not clear
2 yet whether this is an entity that's actually controlled by
3 a foreign entity or has some foreign affiliates, but there's
4 something very nefarious going on here, Judge, and we're
5 very concerned because we're going to get a judgment, it is
6 just a matter of how much.
7 THE COURT: I have an idea, the current order is as
8 I recall it is --- it isn't a complete preclusion of sale or
9 transfer, except it required some bargaining of funds,
10 right?
11 MR. SERRITELLA: If there's a sale we have to get
12 notice of any transaction.
13 THE COURT: It seems to me what we're talking about
14 Mr. Abrams is looking for some additional time for Counsel
15 to step in that -- until that happens, there should be no
16 transfer at all -- no -- not a transfer with holdbacks or
17 anything of the sort, just a complete block on any transfer
18 of ownership for a short period of time until he can have
19 Counsel here to talk about resuscitating this motion, which
20 would be to permit them to sell, subject to some
21 restrictions, so I think what we should do is have a broader
22 restraint on transfer for a short period until Counsel can
23 get on board and respond to this.
24 MR. SERRITELLA: Would that be until they submit
25 their opposition, your Honor?
Charlene Fountaliotis-Squires, Senior Court Reporter
FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022
NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023
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PROCEEDINGS
1 THE COURT: Well, I would like to figure out how
2 long it is going to take for the Jaffe firm to get up and
3 running, but just so, Mr. Abrams, and, Ms. Abrams, you're
4 aware that during that time there's no transfer at all of
5 this property full stop.
6 RUSSELL ABRAMS: We understand. We told them this
7 before.
8 THE COURT: Okay.
9 RUSSELL ABRAMS: We were trying to avoid a complete
10 waste of energy of fighting. And for the record, your
11 Honor, our new Counsel -- Sandra Abrams never signed any
12 promissory notes for this Russell arbitration. She is not a
13 signatory to the arbitration. She asked politely for them
14 to remove her, but she will be going into Court to exercise
15 her Constitutional rights on what the law states people
16 cannot be obligated to sign arbitration agreements to be
17 pulled into cases, so a lot what was said it is true there
18 was a transfer of information that our new Counsel will
19 represent, so this is done properly and fairly.
20 THE COURT: Okay.
21 So what I will ask the Plaintiffs or Petitioners
22 Counsel to do is submit and to share with Mr. Abrams and the
23 Jaffe firm, who I guess at least I have heard they have been
24 retained now, so you should be able to reach out to them and
25 put in a proposed interim order along the lines as I
Charlene Fountaliotis-Squires, Senior Court Reporter
FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022
NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023
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PROCEEDINGS
1 described, which is we will adjourn the hearing on the
2 current Order to Show Cause and maybe you can work out a
3 time, whether it is a week or two weeks or whatever, I'm in
4 the middle of a Jury trial until August 5th so it is not a
5 great time. But if there could be a complete restriction on
6 transfer, I assume your clients rights are taken care of at
7 least during that period and then we can have a new hearing
8 on this Order to Show Cause to replace that interim order.
9 MR. SERRITELLA: Just so I understand, we're not
10 going to have another TRO hearing, it will be on the main
11 motion, the Order to Show Cause itself; is that right?
12 THE COURT: Well, you tell me. When we get to the
13 point, let's say, it is two weeks, whether you are still at
14 a point where, you know, once they are on board, this
15 complete block on transfer can be dissolved and replaced by
16 whatever it is I order. So we can just pick back up on
17 this if you want to but --
18 MR. SERRITELLA: What I was going to suggest that
19 rather than having my client continue to incur fees with
20 multiple hearings and applications, it is just not fair and
21 impartial to them, given the circumstances, that we proceed
22 with the main application and deal with what, your Honor, is
23 suggesting by putting restraints on any sale and if it comes
24 to be that there's some bona fide purchase down the road
25 between now and whenever it is we get a hearing date, if it
Charlene Fountaliotis-Squires, Senior Court Reporter
FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022
NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023
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PROCEEDINGS
1 gets extended out because you have a trial, they could come
2 back to the court.
3 THE COURT: I don't want to extend a complete block
4 on a sale for longer than I have to. You know if you can
5 -- if we can be back together within a couple of weeks and
6 that's not a time when they are going to sell this place
7 anyway, so maybe this is not worth fighting about, I
8 certainly would prefer to have a single proceeding to
9 resolve this whole thing forever more rather than having a
10 TRO and then a preliminary injunction.
11 MR. SERRITELLA: We agree with that, your Honor.
12 THE COURT: That's fine with me.
13 What I would suggest you do is, you know, maybe
14 with outgoing Counsel, simply to segue into incoming
15 Counsel, just talk about the language but just on the record
16 right now for everyone to hear on the record, the existing
17 TRO is now expanded in part to permit -- to prohibit all
18 transfers, sales, assignments or encumbrances of this
19 property pending a -- the onboarding of Counsel and the
20 continuation of this Order to Show Cause. And my intention
21 here is that this is a relatively short period of time for
22 Counsel to get up to speed and ready to go, which shouldn't
23 be too hard. And I would ask you to just try to organize
24 what this next hearing should be. I do think it makes
25 sense for it to just be a hearing, is it a preliminary
Charlene Fountaliotis-Squires, Senior Court Reporter
FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022
NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023
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PROCEEDINGS
1 injunction or a final injunction or what is it?
2 MR. SERRITELLA: Well, it is -- I mean it should be
3 a final hearing to resolve everything. I mean I don't know
4 what we need to call it, your Honor.
5 THE COURT: But the petition you have here is an
6 order of attachment in aid of arbitration.
7 MR. SERRITELLA: That's true.
8 THE COURT: We now have an arbitration judgment,
9 correct?
10 MR. SERRITELLA: We have a summary judgment ruling
11 on the main issue of the case. There's still a hearing, it
12 is going to be mostly on damages. That's going to take
13 place in September.
14 THE COURT: So can I just -- why isn't -- is this a
15 Triple A arbitration?
16 MR. SERRITELLA: Correct, your Honor.
17 THE COURT: Why don't at this point why can't it
18 shift to the arbitration as to forum for resolving all of
19 this stuff?
20 MR. SERRITELLA: Well, your Honor, has an order and
21 the order was violated so we're coming back to, your Honor,
22 to address the violation of the order and ask for a
23 modification of the order so we believe you have
24 jurisdiction over it.
25 THE COURT: I understand that but the point of this
Charlene Fountaliotis-Squires, Senior Court Reporter
FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022
NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023
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PROCEEDINGS
1 was that until you got a judgment, you wanted attachments so
2 that the property wouldn't be dissipated. Now, you are, it
3 seems, at least close to a judgment so instead of an
4 attachment it is going to be an enforcement of a judgment
5 reasonably soon, at least, potentially, right?
6 MR. SERRITELLA: Yes, let me just preface by saying
7 before I was involved in the case, I understand from prior
8 Counsel for my client there was an attempt to make an
9 application before the arbitrator and the arbitrator said it
10 was outside of his jurisdiction, partly because there are
11 other entities that are not part of the arbitration, such as
12 West 70th Owners Corp and now we have this Sepi Realty. So
13 that's part of the issue as well.
14 THE COURT: Okay. Just so it is clear, my reference
15 to an order prohibiting all sales given that my
16 understanding is that anyway is that Sepi Realty is
17 essentially owned by the same Respondents is covered by this
18 order. So I would get a proposed order as best as you can
19 to make it a jointly proposed order, but one way or the
20 other I think this one is simpler frankly than all the other
21 orders because it doesn't have a lot of bells and whistles
22 about holdbacks and whatever, it is just a flat prohibition.
23 It should apply to this other entity. And, frankly, any
24 other entity that these two Respondents own or control.
25 And I just want it to be tightly limited in duration --
Charlene Fountaliotis-Squires, Senior Court Reporter
FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022
NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023
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PROCEEDINGS
1 MR. SERRITELLA: One thing, your Honor, my colleague
2 reminded me that part of the scope of the order was further
3 encumbrances and one of the arguments we make in our papers
4 is that there are no mortgages on the property that exceed
5 -- was allowed by, your Honor's, order, that has to be part
6 of it as well, not just transfers.
7 THE COURT: When we get to the Order to Show Cause,
8 that's when we're going to deal with that portion of this.
9 Right now what I'm saying is that there's no further
10 encumbrances, no transfers, no sales, no nothing.
11 MR. SERRITELLA: One last question, your Honor, if I
12 may, you know given the seriousness of what is going on here
13 and in our papers we alluded to some of this that there
14 might have been some attorneys that were involved in frankly
15 assisting Respondents in violating the order. We think it
16 would be proper to have some discovery in connection with
17 that violation of the order. We don't have all the facts.
18 And Mr. Russell Abrams just said that he supposedly informed
19 us. I could represent to you as an Officer of the Court, I
20 was never told about any such transfer of the property. The
21 way we found out was by checking public records. And as a
22 matter of fact this is in our papers in Exhibit 6, my firm
23 had learned that Mr. Russell Abrams was in New York back in
24 April and May this year and he was doing some business
25 dealings with this Israelian Law Firm and we sent them a
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1 letter putting them on notice of, your Honor's, order to
2 make it clear to them that there was under no circumstances
3 supposed to be any transfers or encumbrances on the
4 property. Low and behold a week later after this letter
5 goes out, this recordation of a transfer and it is notarized
6 by an attorney in that office, so at the least maybe they
7 didn't know about it at the time, but we don't know that.
8 They were informed about it. They should have at least
9 picked up the phone and say, you know, what Mr. Serritella
10 we didn't know this, there was a transfer, we're bringing it
11 to your attention. That did not happen. So we think
12 we're entitled to some discovery on what actually did
13 happen.
14 THE COURT: I will consider that in the next
15 hearing. I think right now all I'm doing is keeping a lid
16 on everything on all sides until we can continue this
17 hearing. It should be as airtight as you can make it and
18 it doesn't sound like the Abrams are intending to sell or
19 encumber this property in the short term but the order
20 should be without any gaps.
21 MR. SERRITELLA: Understood, your Honor.
22 THE COURT: It shouldn't just say sale anymore. It
23 should be the whole deal. That's just until, you know, this
24 is a stop gap to keep everybody comfortable until we can
25 have this fight.
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1 RUSSELL ABRAMS: May I say something?
2 THE COURT: I would like to ask you to tell your
3 new Counsel to enter an appearance as soon as possible. I
4 will go ahead and grant the motion to withdraw. If you are
5 telling me they are going to enter their appearance promptly
6 because 70th West has to have Counsel, so that's what will
7 happen.
8 RUSSELL ABRAMS: Let's be clear, your Honor, Counsel
9 said something so let's just make this indisputable facts
10 number; one, they went to the arbitrator in August 2021
11 asking for an attachment, the arbitrator clearly
12 definitively said no. This arbitration agreement was very
13 specific, it said private. They then went to make a public
14 circus in violation of the arbitration agreement to remain
15 private. What they did not disclose to you in December,
16 which they talk about their entire fear of not getting paid
17 was there was a settlement Plaintiffs were involved in for
18 $2,000,000 a judgment, they paid zero of the money. We paid
19 100 percent of the money. So when they go to claim we're
20 afraid they won't pay a judgment against them. They knew
21 materially factually that was exactly false of what had just
22 happened in November and December of 2021 while they were
23 running here. They left that part off. It was
24 confidential and they publicized it. But as the facts are
25 undisputed, Plaintiff signed an agreement to make a payment,
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1 they paid zero. We paid the entire settlement. We paid
2 the legal fees. They paid nothing on that and they
3 literally go into Court saying how they are scared we don't
4 pay judgments. So let the material record show that this
5 is having a material impact on a nonparty in terms of being
6 limited to put debt on a home that has a debt of less than
7 50 percent of its value. Those are material things. And
8 when they misrepresent things, I think it should be
9 important -- I will let our new Counsel represent properly.
10 Sandra Abrams never signed the arbitration agreement. She
11 was never named. They solely called her a related entity.
12 That's the definition of her. She never signed any
13 promissory notes. She never signed the arbitration
14 agreement. They were paid hundreds of thousands of dollars.
15 They have refused as a matter of fact to provide their
16 statements to the arbitration to show payments they have
17 received. That's a fact undisputable. They did not
18 provide their bank statements to
Preview
FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022 NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023 Exhibit 52 FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022 NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023 Exhibit 17 FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022 NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023 FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022 NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023 FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022 NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023 FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022 NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023 FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022 NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023 FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022 NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023 Exhibit 53 FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022 NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023 Exhibit 18 FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022 NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023 FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022 NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023 Exhibit 54 FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022 NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023 1 1 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: CIVIL TERM: PART 3 2 - - - - - - - - - - - - - - - - - - - - - - - -X MARCUS ABRAMS and LISA ABRAMS, 3 Petitioners, 4 INDEX NUMBER: 5 658845/2021 - against - 6 RUSSELL ABRAMS, SANDRA ABRAMS and WEST 70TH 7 OWNERS CORP, 8 Respondents. - - - - - - - - - - - - - - - - - - - - - - - -X 9 VIA MICROSOFT TEAMS July 15, 2022 10 BEFORE: HONORABLE JOEL M. COHEN 11 Justice of the Supreme Court APPEARANCES: 12 KIM & SERRITELLA, LLP. 13 Attorney for the Petitioners 110 West 40th Street, 10th floor 14 New York, New York 10018 BY: JAMES R. SERRITELLA, ESQ. 15 16 TUTTLE YICK, LLP. 17 Attorney for the Respondents 352 Seventh Avenue, 14th floor 18 New York, New York 10001 BY: DAVID G. SKILLMAN, ESQ. 19 20 21 22 CHARLENE FOUNTALIOTIS-SQUIRES 23 SENIOR COURT REPORTER 24 25 Charlene Fountaliotis-Squires, Senior Court Reporter FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022 NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023 2 PROCEEDINGS 1 THE COURT: Index number 658845 of 2021 in the 2 matter of Marcus Abrams and Lisa Abrams, Petitioners against 3 Russell Abrams, Sandra Abrams and West 70th Owners Corp. 4 Start with appearances, beginning with the 5 Petitioners Marcus and Lisa Abrams. 6 MR. SERRITELLA: Good afternoon, your Honor. 7 James Serritella, from Kim and Serritella, LLP, on 8 behalf of the Petitioners. Also, your Honor, I have with 9 me Justin Stone. His application for admission to New York 10 is actually pending. I'm going to be doing all the 11 speaking. Would it be okay if he accompanies me at the 12 Counsel table? 13 THE COURT: Yes. 14 MR. SERRITELLA: Thank you very much. 15 THE COURT: For the Respondents, Mr. and Ms. Abrams 16 and West 70th Owners. 17 MR. SKILLMAN: For the Respondent, David Skillman, 18 of Tuttle Yick, because there's a pending motion to be 19 relieved as Counsel, Mr. Russell Abrams who is an individual 20 Respondent is here as well. And I would also like to add, 21 your Honor, in connection with this TRO application, we 22 would like to advance the Order to Show Cause on the 23 application to be relieved as Counsel given that everyone is 24 here today including Mr. Abrams. That motion is currently 25 returnable on Friday but I think it makes sense to deal with Charlene Fountaliotis-Squires, Senior Court Reporter FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022 NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023 3 PROCEEDINGS 1 it today. 2 THE COURT: Just one thing, Mr. Abrams and Ms. 3 Abrams can obviously appear Pro Se but West 70th owners Corp 4 cannot. 5 MR. SKILLMAN: Which is why, your Honor, I propose 6 that we put off this TRO application for a very short 7 period, a week in exchange, that will give Mr. Abrams and 8 West 70th Corp -- Owners Corp time to retain new Counsel. 9 And in the meantime the Respondents will agree that they 10 will not be, you know, transferring ownership of this entity 11 anywhere. They will not encumber the property any further. 12 We're not asking for much time, just another week for him to 13 get Counsel and appear for this TRO. 14 THE COURT: Okay, let me let Mr. Serritella -- 15 RUSSELL ABRAMS: My name is Russell Abrams. My wife 16 did not receive the Teams link to appear. She is traveling 17 tomorrow but she could have appeared virtually. As he 18 said, we have hired new Counsel, we don't have any 19 confidence -- there's a lot of statements that have been 20 made, so all I ask is for an adjournment from our attorneys 21 so they could properly retain us. 22 THE COURT: Have you hired new Counsel? 23 RUSSELL ABRAMS: Yes, we have signed the agreements 24 just now, Jaffe Asher will be the law firm. 25 THE COURT: And is there a reason why they couldn't Charlene Fountaliotis-Squires, Senior Court Reporter FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022 NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023 4 PROCEEDINGS 1 be here today? 2 RUSSELL ABRAMS: Because I have -- given the 3 complexity, the amount of money people are asking about, I 4 think it is pretty important we have reputable competent 5 Counsel, that's why I actually have to talk to attorneys to 6 make sure we have an attorney that could represent the 7 proper thing. This is -- 8 THE COURT: No, I understand. 9 RUSSELL ABRAMS: -- this is an unbelievable amount 10 of money, sir, and we have to have a proper attorney for it. 11 THE COURT: No, I'm not explaining myself well. 12 If you have chosen new attorneys, I recommend and basically 13 this happens a lot, what would happen typically is that the 14 new attorneys would sit there and say, look, Judge, we just 15 got here, we need time to get up to speed and whatever but 16 they would normally be sitting here. 17 RUSSELL ABRAMS: Would you like them to contact you 18 later this afternoon or something? 19 They were in the car driving when I spoke to them 20 earlier today, that's why. 21 THE COURT: Well, let me hear -- 22 RUSSELL ABRAMS: I could give you names or the law 23 firm, everything. 24 THE COURT: What's the name of the firm? 25 RUSSELL ABRAMS: Jaffe and Asher. Charlene Fountaliotis-Squires, Senior Court Reporter FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022 NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023 5 PROCEEDINGS 1 THE COURT: Okay. 2 And an individual name? 3 RUSSELL ABRAMS: Hold on, I will give you the two 4 attorneys? 5 MR. SKILLMAN: To fill in the gaps here, he says 6 they -- Mr. Abrams retained his new Counsel today, so -- 7 THE COURT: No, I understand. To resolve your 8 current Counsel's problem, you can -- I'm happy to do this 9 either way, you can just do a substitution of Counsel, you 10 don't need an order, but I will grant the withdrawal but I 11 would prefer for there not be a gap in time and rather just 12 have either a substitution of Counsel, which is just a form 13 you just submit and do. You don't need my approval for. 14 MR. SKILLMAN: I'm aware of that. I didn't know 15 Counsel was retained. 16 RUSSELL ABRAMS: Marshall Potashner and Greg 17 Galterio. 18 THE COURT: I think Ms. Abrams has joined the Teams 19 call by the way. 20 Okay. I understand everybody's positions, so, Mr. 21 Serritella, why don't you start with the question of whether 22 a temporary restraining order, along with some time would be 23 sufficient. 24 MR. SERRITELLA: Well, your Honor, I think it is 25 Petitioners position that we should proceed today with the Charlene Fountaliotis-Squires, Senior Court Reporter FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022 NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023 6 PROCEEDINGS 1 TRO hearing. Our papers were -- our papers were filed. 2 THE COURT: Just for the record, Ms. Abrams, I 3 think you can -- can you now hear us, Ms. Abrams? 4 SANDRA ABRAMS: Yes. Hi. Good afternoon. 5 THE COURT: Good afternoon. 6 MR. SERRITELLA: Let me start again. It is 7 Petitioners position that we should proceed with the hearing 8 as scheduled today. Our papers were filed over a week ago. 9 Mr. Russell Abrams and Ms. Sandra Abrams have had plenty of 10 time to get replacement Counsel, so we don't think it would 11 be fair to the Petitioners given the circumstances of what 12 is at issue today to delay this any further. There's a 13 real urgent need to have some restrictions put on this 14 property and we believe that the TRO hearing should proceed. 15 THE COURT: I heard it anyway. The plan was to put 16 restrictions in place today, maybe not 100 percent of the 17 one's that you are asking for ultimately, which we will get 18 to shortly, but it wasn't terribly yet spelled out but some 19 sort of a standstill would remain in place according to at 20 least what I heard. 21 MR. SERRITELLA: Well, I guess maybe it is a 22 question I would have, your Honor, would the Respondents 23 stipulate to our proposed order, the Order to Show Cause and 24 have, your Honor, enter the order. 25 THE COURT: Well, if what they are seeking is more Charlene Fountaliotis-Squires, Senior Court Reporter FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022 NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023 7 PROCEEDINGS 1 time to respond to the Order to Show Cause, I kind of 2 assumed not -- 3 MR. SERRITELLA: But that's -- 4 THE COURT: -- maybe I should go back to Mr. Abrams 5 and/or Counsel as part of this request for more time to 6 permit the Jaffe firm to step in, it sounded like you were 7 agreeing to some sort of a standstill of sorts and what 8 would that entail? 9 RUSSELL ABRAMS: We had agreed not to sell the home 10 at all without them being notified seven days in advance of 11 the existing order. None of that has changed. 12 THE COURT: Now, I had heard somewhere that the 13 property had been at least potentially transferred to a 14 different entity; is that correct? 15 RUSSELL ABRAMS: The cooperative is being issued a 16 new certificate of occupancy by the Department of Buildings. 17 We have gone into the, you know, the owners of the 18 proprietary leases, so it was -- been put into the name, 19 which is the same people as West 70th Owners Corp. It was 20 not sold. 21 SANDRA ABRAMS: And we have agreed -- 22 RUSSELL ABRAMS: Wait. 23 SANDRA ABRAMS: -- we have -- 24 RUSSELL ABRAMS: Please wait. Please do not -- 25 THE COURT: One at a time. Charlene Fountaliotis-Squires, Senior Court Reporter FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022 NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023 8 PROCEEDINGS 1 RUSSELL ABRAMS: -- please wait. 2 So we're not selling the house. The house is 3 listed for sale but it hasn't been sold. There's been no 4 contract accepted and we agreed to maintain the current 5 status quo. That's not going to change. 6 THE COURT: So that order still is in place 7 already, right? 8 MR. SERRITELLA: It is, your Honor. But let me 9 just respond to that. The property has been transferred in 10 violation of, your Honor's, order into a new entity. 11 THE COURT: What new entity? 12 MR. SERRITELLA: It is Sepi Realty, LLC. It is 13 plain as day the order has been violated. The Respondents 14 were not supposed to transfer the property and they did. 15 And I can get into the circumstances around that transfer 16 which are very suspicious. I will hold off on that for now. 17 THE COURT: Just curious, the prior orders said 18 that it were transfers or sale? 19 RUSSELL ABRAMS: It said sale. 20 THE COURT: I thought the language might be -- 21 MR. SERRITELLA: Let's look -- 22 RUSSELL ABRAMS: Sale is what it said. They were 23 actually notified about this. That's -- 24 SANDRA ABRAMS: We didn't sell, we transferred 25 because -- Charlene Fountaliotis-Squires, Senior Court Reporter FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022 NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023 9 PROCEEDINGS 1 THE COURT: Ms. Abrams -- 2 MR. SERRITELLA: Your Honor -- 3 THE COURT: This is not the way Court proceedings 4 work. It is going to be one at a time. And when I ask 5 for a party to respond, I will do so. Right now I'm talking 6 to Mr. Serritella. 7 MR. SERRITELLA: Your Honor, the order talks about a 8 sale and encumbering the property. That deed that we 9 submitted in our papers shows that there was a sale. There 10 was a sale from one entity, which is the West 70th Corp to 11 West 70th Owners Corp into Sepi Realty. 12 THE COURT: What was the consideration? 13 MR. SERRITELLA: It says $10.00. 14 THE COURT: Well, look, at a minimum we are going 15 to have to extend the order to include the current owner, 16 otherwise the order has no significance. 17 MR. SERRITELLA: That's a grave concern for us too, 18 your Honor. 19 THE COURT: Well, I would be surprised, I guess, 20 if, Mr. Abrams, or, Ms. Abrams, you would disagree with 21 that, because unless we do that, everything you just said 22 about a standstill is meaningless. It has to apply to the 23 entity that actually holds the shares. 24 RUSSELL ABRAMS: Your Honor, they were notified of 25 this before. This was never an issue. Charlene Fountaliotis-Squires, Senior Court Reporter FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022 NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023 10 PROCEEDINGS 1 THE COURT: I'm now buying or not buying the 2 argument that transferring it was in violation of the order. 3 Put that aside for the moment. If the property is in the 4 hands of this other entity now for whatever reason, the 5 prior order has to apply to that entity or else it has no 6 effect. 7 RUSSELL ABRAMS: As I said, your Honor, we told them 8 that before. We were fine with that. That's why this is 9 just a giant amount of effort on stuff we had told them we 10 had no issue with. 11 THE COURT: Okay, the other part of this you wanted 12 to increase the amount of the holdback on the sale and maybe 13 you can explain that to me. 14 MR. SERRITELLA: Sure, your Honor, I could get into 15 that briefly, I will state that this case in arbitration is 16 by and large over. The issue that remains is the amount of 17 damages. We included this as Exhibit 11 in my affirmation, 18 your Honor. The arbitrator issued a summary judgment 19 ruling in favor of the claimants in the arbitration. He 20 rejected completely this conversion argument, which I'm 21 sure, your Honor, probably remembers from back December and 22 January, have no merit to it whatsoever. As a matter of 23 fact the arbitrator said quote on page seven Respondents 24 submissions failed to even approach the -- approach the 25 showing needed to create an issue of fact as to whether Charlene Fountaliotis-Squires, Senior Court Reporter FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022 NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023 11 PROCEEDINGS 1 there was a conversion of a debt investment into Russell 2 Carr is an equity. And so the arbitrator made it very 3 clear in his ruling that their sole defense has no merit 4 whatsoever. He also pointed how out Mr. Russell Abrams made 5 a number of inconsistent statements and frankly, your Honor, 6 his credibility is very much called into question in all of 7 these proceedings and we have gone into depth with this in 8 our papers here and our papers with the arbitrator. There 9 have been a number of statements under oath that have been 10 made that have proven to be false. That have been 11 completely contradicted by the documentary evidence. And 12 so we have reason to question anything that Mr. Russell 13 Abrams says even to the Court today, your Honor. And so 14 our concern, which is a legitimate concern, is that the 15 circumstances under which this transfer was made in April 16 and recorded over a month later, let me just tell, your 17 Honor, what happened during that month, we had submissions 18 to the arbitrator on summary judgment. On May 1st the 19 arbitrator held an oral argument on the summary judgment 20 motions -- I'm sorry, May 5th. He made it very clear at 21 that hearing that he was inclined to rule in favor of the 22 claimants on this conversion issue. Low and behold 2 weeks, 23 3 weeks later, there's a recording of a transfer from one 24 entity that's seemingly solely owned by Russell and Sandra 25 to another entity that is seemingly wholly owned by Russell Charlene Fountaliotis-Squires, Senior Court Reporter FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022 NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023 12 PROCEEDINGS 1 and Sandra with some offshore affiliates. It is not clear 2 yet whether this is an entity that's actually controlled by 3 a foreign entity or has some foreign affiliates, but there's 4 something very nefarious going on here, Judge, and we're 5 very concerned because we're going to get a judgment, it is 6 just a matter of how much. 7 THE COURT: I have an idea, the current order is as 8 I recall it is --- it isn't a complete preclusion of sale or 9 transfer, except it required some bargaining of funds, 10 right? 11 MR. SERRITELLA: If there's a sale we have to get 12 notice of any transaction. 13 THE COURT: It seems to me what we're talking about 14 Mr. Abrams is looking for some additional time for Counsel 15 to step in that -- until that happens, there should be no 16 transfer at all -- no -- not a transfer with holdbacks or 17 anything of the sort, just a complete block on any transfer 18 of ownership for a short period of time until he can have 19 Counsel here to talk about resuscitating this motion, which 20 would be to permit them to sell, subject to some 21 restrictions, so I think what we should do is have a broader 22 restraint on transfer for a short period until Counsel can 23 get on board and respond to this. 24 MR. SERRITELLA: Would that be until they submit 25 their opposition, your Honor? Charlene Fountaliotis-Squires, Senior Court Reporter FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022 NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023 13 PROCEEDINGS 1 THE COURT: Well, I would like to figure out how 2 long it is going to take for the Jaffe firm to get up and 3 running, but just so, Mr. Abrams, and, Ms. Abrams, you're 4 aware that during that time there's no transfer at all of 5 this property full stop. 6 RUSSELL ABRAMS: We understand. We told them this 7 before. 8 THE COURT: Okay. 9 RUSSELL ABRAMS: We were trying to avoid a complete 10 waste of energy of fighting. And for the record, your 11 Honor, our new Counsel -- Sandra Abrams never signed any 12 promissory notes for this Russell arbitration. She is not a 13 signatory to the arbitration. She asked politely for them 14 to remove her, but she will be going into Court to exercise 15 her Constitutional rights on what the law states people 16 cannot be obligated to sign arbitration agreements to be 17 pulled into cases, so a lot what was said it is true there 18 was a transfer of information that our new Counsel will 19 represent, so this is done properly and fairly. 20 THE COURT: Okay. 21 So what I will ask the Plaintiffs or Petitioners 22 Counsel to do is submit and to share with Mr. Abrams and the 23 Jaffe firm, who I guess at least I have heard they have been 24 retained now, so you should be able to reach out to them and 25 put in a proposed interim order along the lines as I Charlene Fountaliotis-Squires, Senior Court Reporter FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022 NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023 14 PROCEEDINGS 1 described, which is we will adjourn the hearing on the 2 current Order to Show Cause and maybe you can work out a 3 time, whether it is a week or two weeks or whatever, I'm in 4 the middle of a Jury trial until August 5th so it is not a 5 great time. But if there could be a complete restriction on 6 transfer, I assume your clients rights are taken care of at 7 least during that period and then we can have a new hearing 8 on this Order to Show Cause to replace that interim order. 9 MR. SERRITELLA: Just so I understand, we're not 10 going to have another TRO hearing, it will be on the main 11 motion, the Order to Show Cause itself; is that right? 12 THE COURT: Well, you tell me. When we get to the 13 point, let's say, it is two weeks, whether you are still at 14 a point where, you know, once they are on board, this 15 complete block on transfer can be dissolved and replaced by 16 whatever it is I order. So we can just pick back up on 17 this if you want to but -- 18 MR. SERRITELLA: What I was going to suggest that 19 rather than having my client continue to incur fees with 20 multiple hearings and applications, it is just not fair and 21 impartial to them, given the circumstances, that we proceed 22 with the main application and deal with what, your Honor, is 23 suggesting by putting restraints on any sale and if it comes 24 to be that there's some bona fide purchase down the road 25 between now and whenever it is we get a hearing date, if it Charlene Fountaliotis-Squires, Senior Court Reporter FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022 NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023 15 PROCEEDINGS 1 gets extended out because you have a trial, they could come 2 back to the court. 3 THE COURT: I don't want to extend a complete block 4 on a sale for longer than I have to. You know if you can 5 -- if we can be back together within a couple of weeks and 6 that's not a time when they are going to sell this place 7 anyway, so maybe this is not worth fighting about, I 8 certainly would prefer to have a single proceeding to 9 resolve this whole thing forever more rather than having a 10 TRO and then a preliminary injunction. 11 MR. SERRITELLA: We agree with that, your Honor. 12 THE COURT: That's fine with me. 13 What I would suggest you do is, you know, maybe 14 with outgoing Counsel, simply to segue into incoming 15 Counsel, just talk about the language but just on the record 16 right now for everyone to hear on the record, the existing 17 TRO is now expanded in part to permit -- to prohibit all 18 transfers, sales, assignments or encumbrances of this 19 property pending a -- the onboarding of Counsel and the 20 continuation of this Order to Show Cause. And my intention 21 here is that this is a relatively short period of time for 22 Counsel to get up to speed and ready to go, which shouldn't 23 be too hard. And I would ask you to just try to organize 24 what this next hearing should be. I do think it makes 25 sense for it to just be a hearing, is it a preliminary Charlene Fountaliotis-Squires, Senior Court Reporter FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022 NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023 16 PROCEEDINGS 1 injunction or a final injunction or what is it? 2 MR. SERRITELLA: Well, it is -- I mean it should be 3 a final hearing to resolve everything. I mean I don't know 4 what we need to call it, your Honor. 5 THE COURT: But the petition you have here is an 6 order of attachment in aid of arbitration. 7 MR. SERRITELLA: That's true. 8 THE COURT: We now have an arbitration judgment, 9 correct? 10 MR. SERRITELLA: We have a summary judgment ruling 11 on the main issue of the case. There's still a hearing, it 12 is going to be mostly on damages. That's going to take 13 place in September. 14 THE COURT: So can I just -- why isn't -- is this a 15 Triple A arbitration? 16 MR. SERRITELLA: Correct, your Honor. 17 THE COURT: Why don't at this point why can't it 18 shift to the arbitration as to forum for resolving all of 19 this stuff? 20 MR. SERRITELLA: Well, your Honor, has an order and 21 the order was violated so we're coming back to, your Honor, 22 to address the violation of the order and ask for a 23 modification of the order so we believe you have 24 jurisdiction over it. 25 THE COURT: I understand that but the point of this Charlene Fountaliotis-Squires, Senior Court Reporter FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022 NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023 17 PROCEEDINGS 1 was that until you got a judgment, you wanted attachments so 2 that the property wouldn't be dissipated. Now, you are, it 3 seems, at least close to a judgment so instead of an 4 attachment it is going to be an enforcement of a judgment 5 reasonably soon, at least, potentially, right? 6 MR. SERRITELLA: Yes, let me just preface by saying 7 before I was involved in the case, I understand from prior 8 Counsel for my client there was an attempt to make an 9 application before the arbitrator and the arbitrator said it 10 was outside of his jurisdiction, partly because there are 11 other entities that are not part of the arbitration, such as 12 West 70th Owners Corp and now we have this Sepi Realty. So 13 that's part of the issue as well. 14 THE COURT: Okay. Just so it is clear, my reference 15 to an order prohibiting all sales given that my 16 understanding is that anyway is that Sepi Realty is 17 essentially owned by the same Respondents is covered by this 18 order. So I would get a proposed order as best as you can 19 to make it a jointly proposed order, but one way or the 20 other I think this one is simpler frankly than all the other 21 orders because it doesn't have a lot of bells and whistles 22 about holdbacks and whatever, it is just a flat prohibition. 23 It should apply to this other entity. And, frankly, any 24 other entity that these two Respondents own or control. 25 And I just want it to be tightly limited in duration -- Charlene Fountaliotis-Squires, Senior Court Reporter FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022 NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023 18 PROCEEDINGS 1 MR. SERRITELLA: One thing, your Honor, my colleague 2 reminded me that part of the scope of the order was further 3 encumbrances and one of the arguments we make in our papers 4 is that there are no mortgages on the property that exceed 5 -- was allowed by, your Honor's, order, that has to be part 6 of it as well, not just transfers. 7 THE COURT: When we get to the Order to Show Cause, 8 that's when we're going to deal with that portion of this. 9 Right now what I'm saying is that there's no further 10 encumbrances, no transfers, no sales, no nothing. 11 MR. SERRITELLA: One last question, your Honor, if I 12 may, you know given the seriousness of what is going on here 13 and in our papers we alluded to some of this that there 14 might have been some attorneys that were involved in frankly 15 assisting Respondents in violating the order. We think it 16 would be proper to have some discovery in connection with 17 that violation of the order. We don't have all the facts. 18 And Mr. Russell Abrams just said that he supposedly informed 19 us. I could represent to you as an Officer of the Court, I 20 was never told about any such transfer of the property. The 21 way we found out was by checking public records. And as a 22 matter of fact this is in our papers in Exhibit 6, my firm 23 had learned that Mr. Russell Abrams was in New York back in 24 April and May this year and he was doing some business 25 dealings with this Israelian Law Firm and we sent them a Charlene Fountaliotis-Squires, Senior Court Reporter FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022 NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023 19 PROCEEDINGS 1 letter putting them on notice of, your Honor's, order to 2 make it clear to them that there was under no circumstances 3 supposed to be any transfers or encumbrances on the 4 property. Low and behold a week later after this letter 5 goes out, this recordation of a transfer and it is notarized 6 by an attorney in that office, so at the least maybe they 7 didn't know about it at the time, but we don't know that. 8 They were informed about it. They should have at least 9 picked up the phone and say, you know, what Mr. Serritella 10 we didn't know this, there was a transfer, we're bringing it 11 to your attention. That did not happen. So we think 12 we're entitled to some discovery on what actually did 13 happen. 14 THE COURT: I will consider that in the next 15 hearing. I think right now all I'm doing is keeping a lid 16 on everything on all sides until we can continue this 17 hearing. It should be as airtight as you can make it and 18 it doesn't sound like the Abrams are intending to sell or 19 encumber this property in the short term but the order 20 should be without any gaps. 21 MR. SERRITELLA: Understood, your Honor. 22 THE COURT: It shouldn't just say sale anymore. It 23 should be the whole deal. That's just until, you know, this 24 is a stop gap to keep everybody comfortable until we can 25 have this fight. Charlene Fountaliotis-Squires, Senior Court Reporter FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022 NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023 20 PROCEEDINGS 1 RUSSELL ABRAMS: May I say something? 2 THE COURT: I would like to ask you to tell your 3 new Counsel to enter an appearance as soon as possible. I 4 will go ahead and grant the motion to withdraw. If you are 5 telling me they are going to enter their appearance promptly 6 because 70th West has to have Counsel, so that's what will 7 happen. 8 RUSSELL ABRAMS: Let's be clear, your Honor, Counsel 9 said something so let's just make this indisputable facts 10 number; one, they went to the arbitrator in August 2021 11 asking for an attachment, the arbitrator clearly 12 definitively said no. This arbitration agreement was very 13 specific, it said private. They then went to make a public 14 circus in violation of the arbitration agreement to remain 15 private. What they did not disclose to you in December, 16 which they talk about their entire fear of not getting paid 17 was there was a settlement Plaintiffs were involved in for 18 $2,000,000 a judgment, they paid zero of the money. We paid 19 100 percent of the money. So when they go to claim we're 20 afraid they won't pay a judgment against them. They knew 21 materially factually that was exactly false of what had just 22 happened in November and December of 2021 while they were 23 running here. They left that part off. It was 24 confidential and they publicized it. But as the facts are 25 undisputed, Plaintiff signed an agreement to make a payment, Charlene Fountaliotis-Squires, Senior Court Reporter FILED: NEW YORK COUNTY CLERK 02/25/2023 07:05 AM INDEX NO. 654992/2022 NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 02/25/2023 21 PROCEEDINGS 1 they paid zero. We paid the entire settlement. We paid 2 the legal fees. They paid nothing on that and they 3 literally go into Court saying how they are scared we don't 4 pay judgments. So let the material record show that this 5 is having a material impact on a nonparty in terms of being 6 limited to put debt on a home that has a debt of less than 7 50 percent of its value. Those are material things. And 8 when they misrepresent things, I think it should be 9 important -- I will let our new Counsel represent properly. 10 Sandra Abrams never signed the arbitration agreement. She 11 was never named. They solely called her a related entity. 12 That's the definition of her. She never signed any 13 promissory notes. She never signed the arbitration 14 agreement. They were paid hundreds of thousands of dollars. 15 They have refused as a matter of fact to provide their 16 statements to the arbitration to show payments they have 17 received. That's a fact undisputable. They did not 18 provide their bank statements to