Preview
FILED: NEW YORK COUNTY CLERK 03/10/2023 09:30 PM INDEX NO. 654992/2022
NYSCEF DOC. NO. 108 RECEIVED NYSCEF: 03/10/2023
Exhibit 3
FILED: NEW YORK COUNTY CLERK 03/10/2023 09:30 PM INDEX NO. 654992/2022
NYSCEF DOC. NO. 108 RECEIVED NYSCEF: 03/10/2023
AMERICAN ARBITRATION ASSOCIATION
MARCUS ABRAMS, CLEARWATER )
VENTURES, INC., LISA ABRAMS and the )
LISA ABRAMS REVOCABLE TRUST ) Case No. 01-20-0007-3684
)
Claimants, )
)
-against-
)
)
RUSSELL ABRAMS, SANDRA ABRAMS and )
entities"
"RUSSELLCAR and its related defined in )
"ISSUER"
the parties agreement as )
)
Respondents. )
________________________---__
)
FINAL AWARD
The undersigned Arbitrator, having been duly appointed and qualified pursuant to an
agreement to arbitrate contained in a Purchase Memorialization, dated July 18, 2016 ("Purchase
Memorialization"
or "Note"), and an Arbitration Agreement, dated February 25, 2020
("Arbitration Agreement"), and having been duly sworn, and Claimants, Marcus Abrams
("Marcus"), Clearwater Ventures, Inc., Lisa Abrams ("Lisa") and the Lisa Abrams Revocable
Trust"
Trust ("Lisa's and collectively, "Claimants") having been represented by James R.
Serritella, Esq. and Justin Stone, Esq. and Respondents, Russell Abrams ("Russell"), Sandra
entities"
Abrams ("Sandra") and RussellCar Inversora, S.A. ("RussellCar") and its "related
"Issuer"
defined in the parties agreement as (collectively "Respondents"), having been
represented by Gregory E. Galterio, Esq. and Glenn P. Berger, Esq., and a hearing having been
held, and the undersigned having heard the allegations and proofs of the parties, do hereby
award, as follows:
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Background
This case arises out of a business loan transaction involving two brothers and their
respective wives. More specifically, Marcus and his wife, Lisa, and Lisa's Trust invested
$1,464,234 in the form of a convertible loan in RussellCar, a business founded and owned by
Marcus'
brother, Russell and his wife, Sandra.
The negotiation of the terms of the transaction is set forth in a series of emails between
Russell and Marcus, culminating in the Purchase Memorialization which was drafted by Marcus
and signed by Russell. Among other provisions, the Purchase Memorialization includes the
following:
(a) The transaction relates to the issuance of debt backed by the assets of the Issuer.
"Issuer"
(b) The is defined as "RussellCar including all subsidiaries, directly and
indirectly owned (or subsequently created legal structures) created to take advantage of the
."
economic benefit related to the growth and expansion of RussellCar. .
(c) Russell and Sandra represented and warranted they had the authority to enter into
"RussellCar."
the transaction on behalf of the interests of the entities collectively known as
transparency"
(d) The Issuer will provide "complete with regard to its financial books
and records.
(e) The Note has a seven-year term.
(f) The Note has a quarterly payment formula.
(g) The Purchaser has the sole right to convert the investment into equity shares.
(h) Russell's guarantee of the principal amount of the first $1,000,000 in three years.
(i) The parties agreed to try to reasonably resolve any dispute, but if they could not,
to enter binding private arbitration.
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Ultimately, a dispute arose among the parties, as neither the amounts due under the loan or under
the $1,000,000 guarantee given by Russell have been paid.
Pursuant to the arbitration clause in the Purchase Memorialization, Claimants served a
Notice of Intent to Arbitrate. In connection therewith, the parties entered into the more detailed
Arbitration Agreement, wherein the parties agreed to arbitrate this particular dispute. Included
among the provisions of the Arbitration Agreement are following:
4. One party to the agreement is defined in the Purchase Memorialization as
entities."
"RussellCar and its related The arbitrator shall determine what entities
this contemplates and they shall be joined as parties to this agreement, nunc pro
tune.
5. Russell Abrams represents and warrants that he has authority to bind "RussellCar
entities."
and its related
This arbitration followed.
Prior Proceedings
The Statement of Claim, dated June 29, 2020, asserts claims for (a) declaratory judgment;
breach of breach of contract - personal breach of
(b) contract; (c) guaranty; (d) fiduciary duty;
(e) aiding and abetting breach of fiduciary duty; (f) imposition of a constructive trust; (g)
equitable accounting; (h) fraudulent inducement; and (i) fraud.
On August 7, 2020, an Answer was filed on behalf of Russell, Sandra, and RussellCar.
In addition to a general denial, the Answer included five affirmative defenses, including, most
parties'
notably, the defense that pursuant to the agreement, Claimants had allegedly elected to
convert the loan to RussellCar into shares of a separate company, Aracar. No defense was
asserted that any of the answering Respondents was not bound to arbitrate.
At the outset of this proceeding, the parties sought the resolution of certain issues. Thus,
the Scheduling Order, dated December 11, 2020, provided for a motion to determine which
"Issuer."
entities related to RussellCar constitute the Also, Claimants sought leave to make a
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motion to determine whether any of the Claimants converted debt into equity with respect to any
relevant entities. The parties made submissions on both issues.
By Order dated January 26, 2021, those motions were decided. With regard to the
determination of the related entities, the Order concluded:
Respondents' Claimants'
submission fails to provide a detailed rebuttal of Appendix
other than the make blanket assertions that certain of the entities are not subsidiaries and
are not signatories to the Arbitration Agreement. No affidavit or documentary support is
provided.
Particularly given the expansive language in the Purchase Memorialization, quoted
Claimants'
above, at this stage, I accept allegations as true for purposes of this
application. I conclude that the entities listed as Related Parties in Appendix 1 should be
joined as parties of this case.
The determination is made without prejudice to an application by Respondents to dismiss
certain entities following completion of discovery, as well as an application by Claimants
to seek to add additional parties based upon information obtained in discovery.
(Emphasis added).
On the issue of the alleged conversion of debt to equity, the Order concluded:
In support of their respective positions, the parties present sharply conflicting versions of
the facts. Weighing the competing evidence presented by the two sides is, in my view,
inappropriate at his early stage of the proceedings.
Given the disputed issues of fact presented I conclude that the requested motion is not
Claimants'
likely to succeed. application is accordingly denied.
Following issuance of that Order, the parties proceeded to discovery. By January 24,
2022, the parties had agreed that discovery was complete and further agreed to the filing by both
sides of the following specified dispositive or partially dispositive motions, as reflected in their
proposed Order to Amend Schedule, dated February 7, 2022, which I approved:
Claimants'
Without prejudice to and without waiver of any of claims and/or arguments
Claimants'
(including relating to the amount of damages), motion shall be limited to the
Petitioners'
issue of whether Respondents are liable to Claimants in connection with
breach of contract claims (Claims 2 and 3 in the Statement of Claim); and
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Respondents'
Without prejudice to and without waiver of any of defenses and/or
Respondents'
arguments (including relating to the amount of damages), motion shall be
entities'
limited to (i) the Respondent Sandra Abrams and the alleged related motion to
Respondents'
dismiss all claims, and (ii) all motion to dismiss the fourth through ninth
claims.
In accordance with the foregoing, each of the parties filed papers in support and in
opposition to the above motions and oral argument was held.
These motions were resolved by Decision and Order on Dispositive Motions, dated June
27, 2022 ("June 27, 2022 Order"). The June 27, 2022 Order is incorporated herein by reference.
The June 27, 2022 Order concluded:
Claimants'
1. motion for summary judgment against Russell with respect to the third
claim under the $1,000,000 guarantee was granted;
Claimants'
2. motion for summary judgment on the second claim for breach of contract
under the Note was denied;
Respondents'
3. motion to dismiss Argentina Capital Management LLC, Argentina Real
Estate Partners, L.P., SEP Consulting and UY Trading LTD was granted;
Respondents'
4. motion to dismiss Aracar Group Holdings Corp. ("Aracar"), Aracar
Financiera, S.A., Aracar Servicios, S.A., Aracar Group SPV I LLC, Aracar Group SPV II LLC
(collectively "the Aracar Entities") and Titan Capital Group II LLC ("Titan") was denied;
Respondents'
5. motion to dismiss Sandra was denied;
Respondents'
6. motion to dismiss the fourth through ninth claims was denied; and
Claimants'
7. motion for sanctions and for a default was denied.
A hearing was held on September 28, 29 and 30, 2022 and on October 13, 2022. By
agreement of the parties, the sessions held on the September dates were conducted in
hearing
person while the session held on October 13 was conducted remotely for the
hearing
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convenience of the parties, counsel and witnesses. During the hearing, was received
testimony
parties'
from Marcus, Lisa, Russell and Sandra as well as from the expert witnesses. My
evaluation of the respective claims and defenses of the parties has been impacted my
by
assessment of the credibility of the witnesses who testified.
Discussion
parties'
This dispute, at its core, is a breach of contract case with the terms of the
agreement spelled out in a written document. While much of the evidence was directed to
allegations of fraud and breach of fiduciary duty and related claims, given the prior strained
relationship between the principal parties as well as their sophistication, the key element of
parties'
reasonable reliance is missing. Nevertheless, the evidence was clear that the contract
was, in fact, breached and, as a result, damages therefor are warranted. The relevant facts as
established through documents and testimony at the hearing will be described in the analysis of
the claims below.
Liability of Russell under the Guarantee
As noted above, among the determinations in the June 27, 2022 Order was the granting of
Claimant's motion for summary judgment against Russell on Russell's $1,000,000 guarantee
parties'
contained in the agreement.
Shortly prior to the commencement of the hearing, Claimants sought the immediate
issuance of separate award on the guarantee in their favor and against Russell based on the June
27, 2022 Order. Respondents opposed the issuance of such a partial award. Under all of the
circumstances, I have determined not to address this claim separately in a partial final award, but
rather to include the determination of the claim in this Final Award.
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For the reasons stated in the June 27, 2022 Order, and after consideration of the evidence
adduced at the hearing, I have determined to grant the relief requested by Claimants against
Russell pursuant to Russell's $1,000,000 guarantee.
Respondents'
As noted in the June 27, 2022 Order, main defense to this claim was that
Claimants elected to convert their loan to RussellCar into equity and that, therefore, no amounts
were due under the loan or the guarantee. During the hearing, Respondents introduced for the
first time an email dated August 16, 2018 from Marcus to Sandra (Ex. DD). Respondents argue
that this document establishes that Claimants converted their loan to RussellCar into equity.
Despite the fact that this case had been pending for well over two years, this document surfaced
for the first time only a few days prior to the start of the hearings on September 28, 2022.
Respondents offered no justifiable excuse for not presenting the document earlier and, more
particularly, in connection with the dispositive motions decided in the June 27, 2022 Order.
Nevertheless, even if one would consider this document as newly discovered evidence, it
fails to overcome the weight of the credible evidence that Claimants did not convert their loan to
RussellCar into RussellCar equity. In that regard, the email does not refer to the exercise of the
Marcus' Aracar," Claimants'
conversion option, but instead refers to "percentage in not to equity
in RussellCar.
In addition, the determination in the June 27, 2022 Order was based, in part, on the vague
and inconsistent sworn statements by Russell as to when and in what form the purported
conversion took place (see, June 27, 2022 Order, p. 6). Russell's testimony at the hearing served
Marcus'
only to compound those inconsistencies. (Vol. 3 Tr. 74-76, 258-59). By contrast,
sworn statements throughout the proceeding and his testimony that he had not converted was
consistent and unequivocal.
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Respondents'
Finally, contrary to argument, the determination that Claimants had not
converted their loan into RussellCar equity was not based solely on the absence of a signed
writing, but rather on the lack of credible evidence supporting such conversion. In that regard,
an email from Russell in September 2019 (Ex. 12), more than one year after Russell claims the
conversion took place, shows that Claimants had not yet converted the RussellCar Note.
Accordingly, Claimants shall recover from Russell, pursuant to his personal guarantee,
the sum of $1,000,000, plus 9 percent statutory interest under CPLR §§5001 and 5004 and AAA
Commercial Rule 47(d) (now 49(d)) from July 18, 2019.
Liability for Principal and Interest Under the Purchase Memorialization
"Issuer"
There is no dispute that the as defmed in the Purchase Memorialization includes
at least the following entities: RussellCar (defined above), Crosstax, S.A., Taxcorp, S.A.,
Carcorp, S.A. and RussellCar S.R.L. (collectively "RussellCar and Subsidiaries"). See,
Respondents'
Post-Hearing Brief, p. 14.
In addition, it is also uncontroverted that Claimants made the total investment provided
for in the Purchase Memorialization. Further, the evidence is clear that no payments were made
to Claimants under the Note. To the extent that Russell claimed in testimony that some
payments were made to Marcus, such
Preview
FILED: NEW YORK COUNTY CLERK 03/10/2023 09:30 PM INDEX NO. 654992/2022 NYSCEF DOC. NO. 108 RECEIVED NYSCEF: 03/10/2023 Exhibit 3 FILED: NEW YORK COUNTY CLERK 03/10/2023 09:30 PM INDEX NO. 654992/2022 NYSCEF DOC. NO. 108 RECEIVED NYSCEF: 03/10/2023 AMERICAN ARBITRATION ASSOCIATION MARCUS ABRAMS, CLEARWATER ) VENTURES, INC., LISA ABRAMS and the ) LISA ABRAMS REVOCABLE TRUST ) Case No. 01-20-0007-3684 ) Claimants, ) ) -against- ) ) RUSSELL ABRAMS, SANDRA ABRAMS and ) entities" "RUSSELLCAR and its related defined in ) "ISSUER" the parties agreement as ) ) Respondents. ) ________________________---__ ) FINAL AWARD The undersigned Arbitrator, having been duly appointed and qualified pursuant to an agreement to arbitrate contained in a Purchase Memorialization, dated July 18, 2016 ("Purchase Memorialization" or "Note"), and an Arbitration Agreement, dated February 25, 2020 ("Arbitration Agreement"), and having been duly sworn, and Claimants, Marcus Abrams ("Marcus"), Clearwater Ventures, Inc., Lisa Abrams ("Lisa") and the Lisa Abrams Revocable Trust" Trust ("Lisa's and collectively, "Claimants") having been represented by James R. Serritella, Esq. and Justin Stone, Esq. and Respondents, Russell Abrams ("Russell"), Sandra entities" Abrams ("Sandra") and RussellCar Inversora, S.A. ("RussellCar") and its "related "Issuer" defined in the parties agreement as (collectively "Respondents"), having been represented by Gregory E. Galterio, Esq. and Glenn P. Berger, Esq., and a hearing having been held, and the undersigned having heard the allegations and proofs of the parties, do hereby award, as follows: ADF / #1619075v1/0178390 -078908 FILED: NEW YORK COUNTY CLERK 03/10/2023 09:30 PM INDEX NO. 654992/2022 NYSCEF DOC. NO. 108 RECEIVED NYSCEF: 03/10/2023 Background This case arises out of a business loan transaction involving two brothers and their respective wives. More specifically, Marcus and his wife, Lisa, and Lisa's Trust invested $1,464,234 in the form of a convertible loan in RussellCar, a business founded and owned by Marcus' brother, Russell and his wife, Sandra. The negotiation of the terms of the transaction is set forth in a series of emails between Russell and Marcus, culminating in the Purchase Memorialization which was drafted by Marcus and signed by Russell. Among other provisions, the Purchase Memorialization includes the following: (a) The transaction relates to the issuance of debt backed by the assets of the Issuer. "Issuer" (b) The is defined as "RussellCar including all subsidiaries, directly and indirectly owned (or subsequently created legal structures) created to take advantage of the ." economic benefit related to the growth and expansion of RussellCar. . (c) Russell and Sandra represented and warranted they had the authority to enter into "RussellCar." the transaction on behalf of the interests of the entities collectively known as transparency" (d) The Issuer will provide "complete with regard to its financial books and records. (e) The Note has a seven-year term. (f) The Note has a quarterly payment formula. (g) The Purchaser has the sole right to convert the investment into equity shares. (h) Russell's guarantee of the principal amount of the first $1,000,000 in three years. (i) The parties agreed to try to reasonably resolve any dispute, but if they could not, to enter binding private arbitration. 2 ADF / #1619075v1 / 0178390 - 078908 FILED: NEW YORK COUNTY CLERK 03/10/2023 09:30 PM INDEX NO. 654992/2022 NYSCEF DOC. NO. 108 RECEIVED NYSCEF: 03/10/2023 Ultimately, a dispute arose among the parties, as neither the amounts due under the loan or under the $1,000,000 guarantee given by Russell have been paid. Pursuant to the arbitration clause in the Purchase Memorialization, Claimants served a Notice of Intent to Arbitrate. In connection therewith, the parties entered into the more detailed Arbitration Agreement, wherein the parties agreed to arbitrate this particular dispute. Included among the provisions of the Arbitration Agreement are following: 4. One party to the agreement is defined in the Purchase Memorialization as entities." "RussellCar and its related The arbitrator shall determine what entities this contemplates and they shall be joined as parties to this agreement, nunc pro tune. 5. Russell Abrams represents and warrants that he has authority to bind "RussellCar entities." and its related This arbitration followed. Prior Proceedings The Statement of Claim, dated June 29, 2020, asserts claims for (a) declaratory judgment; breach of breach of contract - personal breach of (b) contract; (c) guaranty; (d) fiduciary duty; (e) aiding and abetting breach of fiduciary duty; (f) imposition of a constructive trust; (g) equitable accounting; (h) fraudulent inducement; and (i) fraud. On August 7, 2020, an Answer was filed on behalf of Russell, Sandra, and RussellCar. In addition to a general denial, the Answer included five affirmative defenses, including, most parties' notably, the defense that pursuant to the agreement, Claimants had allegedly elected to convert the loan to RussellCar into shares of a separate company, Aracar. No defense was asserted that any of the answering Respondents was not bound to arbitrate. At the outset of this proceeding, the parties sought the resolution of certain issues. Thus, the Scheduling Order, dated December 11, 2020, provided for a motion to determine which "Issuer." entities related to RussellCar constitute the Also, Claimants sought leave to make a 3 ADF / # 1619075v1/0178390 - 078908 FILED: NEW YORK COUNTY CLERK 03/10/2023 09:30 PM INDEX NO. 654992/2022 NYSCEF DOC. NO. 108 RECEIVED NYSCEF: 03/10/2023 motion to determine whether any of the Claimants converted debt into equity with respect to any relevant entities. The parties made submissions on both issues. By Order dated January 26, 2021, those motions were decided. With regard to the determination of the related entities, the Order concluded: Respondents' Claimants' submission fails to provide a detailed rebuttal of Appendix other than the make blanket assertions that certain of the entities are not subsidiaries and are not signatories to the Arbitration Agreement. No affidavit or documentary support is provided. Particularly given the expansive language in the Purchase Memorialization, quoted Claimants' above, at this stage, I accept allegations as true for purposes of this application. I conclude that the entities listed as Related Parties in Appendix 1 should be joined as parties of this case. The determination is made without prejudice to an application by Respondents to dismiss certain entities following completion of discovery, as well as an application by Claimants to seek to add additional parties based upon information obtained in discovery. (Emphasis added). On the issue of the alleged conversion of debt to equity, the Order concluded: In support of their respective positions, the parties present sharply conflicting versions of the facts. Weighing the competing evidence presented by the two sides is, in my view, inappropriate at his early stage of the proceedings. Given the disputed issues of fact presented I conclude that the requested motion is not Claimants' likely to succeed. application is accordingly denied. Following issuance of that Order, the parties proceeded to discovery. By January 24, 2022, the parties had agreed that discovery was complete and further agreed to the filing by both sides of the following specified dispositive or partially dispositive motions, as reflected in their proposed Order to Amend Schedule, dated February 7, 2022, which I approved: Claimants' Without prejudice to and without waiver of any of claims and/or arguments Claimants' (including relating to the amount of damages), motion shall be limited to the Petitioners' issue of whether Respondents are liable to Claimants in connection with breach of contract claims (Claims 2 and 3 in the Statement of Claim); and 4 ADF / # 1619075v 1 / 0178390 - 078908 FILED: NEW YORK COUNTY CLERK 03/10/2023 09:30 PM INDEX NO. 654992/2022 NYSCEF DOC. NO. 108 RECEIVED NYSCEF: 03/10/2023 Respondents' Without prejudice to and without waiver of any of defenses and/or Respondents' arguments (including relating to the amount of damages), motion shall be entities' limited to (i) the Respondent Sandra Abrams and the alleged related motion to Respondents' dismiss all claims, and (ii) all motion to dismiss the fourth through ninth claims. In accordance with the foregoing, each of the parties filed papers in support and in opposition to the above motions and oral argument was held. These motions were resolved by Decision and Order on Dispositive Motions, dated June 27, 2022 ("June 27, 2022 Order"). The June 27, 2022 Order is incorporated herein by reference. The June 27, 2022 Order concluded: Claimants' 1. motion for summary judgment against Russell with respect to the third claim under the $1,000,000 guarantee was granted; Claimants' 2. motion for summary judgment on the second claim for breach of contract under the Note was denied; Respondents' 3. motion to dismiss Argentina Capital Management LLC, Argentina Real Estate Partners, L.P., SEP Consulting and UY Trading LTD was granted; Respondents' 4. motion to dismiss Aracar Group Holdings Corp. ("Aracar"), Aracar Financiera, S.A., Aracar Servicios, S.A., Aracar Group SPV I LLC, Aracar Group SPV II LLC (collectively "the Aracar Entities") and Titan Capital Group II LLC ("Titan") was denied; Respondents' 5. motion to dismiss Sandra was denied; Respondents' 6. motion to dismiss the fourth through ninth claims was denied; and Claimants' 7. motion for sanctions and for a default was denied. A hearing was held on September 28, 29 and 30, 2022 and on October 13, 2022. By agreement of the parties, the sessions held on the September dates were conducted in hearing person while the session held on October 13 was conducted remotely for the hearing 5 ADF / #1619075v1 / 0178390 - 078908 FILED: NEW YORK COUNTY CLERK 03/10/2023 09:30 PM INDEX NO. 654992/2022 NYSCEF DOC. NO. 108 RECEIVED NYSCEF: 03/10/2023 convenience of the parties, counsel and witnesses. During the hearing, was received testimony parties' from Marcus, Lisa, Russell and Sandra as well as from the expert witnesses. My evaluation of the respective claims and defenses of the parties has been impacted my by assessment of the credibility of the witnesses who testified. Discussion parties' This dispute, at its core, is a breach of contract case with the terms of the agreement spelled out in a written document. While much of the evidence was directed to allegations of fraud and breach of fiduciary duty and related claims, given the prior strained relationship between the principal parties as well as their sophistication, the key element of parties' reasonable reliance is missing. Nevertheless, the evidence was clear that the contract was, in fact, breached and, as a result, damages therefor are warranted. The relevant facts as established through documents and testimony at the hearing will be described in the analysis of the claims below. Liability of Russell under the Guarantee As noted above, among the determinations in the June 27, 2022 Order was the granting of Claimant's motion for summary judgment against Russell on Russell's $1,000,000 guarantee parties' contained in the agreement. Shortly prior to the commencement of the hearing, Claimants sought the immediate issuance of separate award on the guarantee in their favor and against Russell based on the June 27, 2022 Order. Respondents opposed the issuance of such a partial award. Under all of the circumstances, I have determined not to address this claim separately in a partial final award, but rather to include the determination of the claim in this Final Award. 6 ADF / #1619075v1 / 0178390 - 078908 FILED: NEW YORK COUNTY CLERK 03/10/2023 09:30 PM INDEX NO. 654992/2022 NYSCEF DOC. NO. 108 RECEIVED NYSCEF: 03/10/2023 For the reasons stated in the June 27, 2022 Order, and after consideration of the evidence adduced at the hearing, I have determined to grant the relief requested by Claimants against Russell pursuant to Russell's $1,000,000 guarantee. Respondents' As noted in the June 27, 2022 Order, main defense to this claim was that Claimants elected to convert their loan to RussellCar into equity and that, therefore, no amounts were due under the loan or the guarantee. During the hearing, Respondents introduced for the first time an email dated August 16, 2018 from Marcus to Sandra (Ex. DD). Respondents argue that this document establishes that Claimants converted their loan to RussellCar into equity. Despite the fact that this case had been pending for well over two years, this document surfaced for the first time only a few days prior to the start of the hearings on September 28, 2022. Respondents offered no justifiable excuse for not presenting the document earlier and, more particularly, in connection with the dispositive motions decided in the June 27, 2022 Order. Nevertheless, even if one would consider this document as newly discovered evidence, it fails to overcome the weight of the credible evidence that Claimants did not convert their loan to RussellCar into RussellCar equity. In that regard, the email does not refer to the exercise of the Marcus' Aracar," Claimants' conversion option, but instead refers to "percentage in not to equity in RussellCar. In addition, the determination in the June 27, 2022 Order was based, in part, on the vague and inconsistent sworn statements by Russell as to when and in what form the purported conversion took place (see, June 27, 2022 Order, p. 6). Russell's testimony at the hearing served Marcus' only to compound those inconsistencies. (Vol. 3 Tr. 74-76, 258-59). By contrast, sworn statements throughout the proceeding and his testimony that he had not converted was consistent and unequivocal. 7 ADF/#1619075vl /0178390 - 078908 FILED: NEW YORK COUNTY CLERK 03/10/2023 09:30 PM INDEX NO. 654992/2022 NYSCEF DOC. NO. 108 RECEIVED NYSCEF: 03/10/2023 Respondents' Finally, contrary to argument, the determination that Claimants had not converted their loan into RussellCar equity was not based solely on the absence of a signed writing, but rather on the lack of credible evidence supporting such conversion. In that regard, an email from Russell in September 2019 (Ex. 12), more than one year after Russell claims the conversion took place, shows that Claimants had not yet converted the RussellCar Note. Accordingly, Claimants shall recover from Russell, pursuant to his personal guarantee, the sum of $1,000,000, plus 9 percent statutory interest under CPLR §§5001 and 5004 and AAA Commercial Rule 47(d) (now 49(d)) from July 18, 2019. Liability for Principal and Interest Under the Purchase Memorialization "Issuer" There is no dispute that the as defmed in the Purchase Memorialization includes at least the following entities: RussellCar (defined above), Crosstax, S.A., Taxcorp, S.A., Carcorp, S.A. and RussellCar S.R.L. (collectively "RussellCar and Subsidiaries"). See, Respondents' Post-Hearing Brief, p. 14. In addition, it is also uncontroverted that Claimants made the total investment provided for in the Purchase Memorialization. Further, the evidence is clear that no payments were made to Claimants under the Note. To the extent that Russell claimed in testimony that some payments were made to Marcus, such