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FILED: NEW YORK COUNTY CLERK 12/21/2023 05:22 PM INDEX NO. 656413/2023
NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 12/21/2023
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
-------------------------------- )
CPIF MRA, LLC, as successor in interest to )
CPIF LENDING, LLC, ) Index No. _____________
)
Plaintiff, ) SUMMONS
)
vs )
)
JTRE 14 VESEY LLC, )
)
Defendant. )
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TO THE ABOVE-NAMED DEFENDANT:
You are hereby summoned and required to serve upon the undersigned Plaintiff’s attorney
an Answer to the Complaint in this action within twenty (20) days after service of this Summons,
exclusive of the day of service, or within thirty (30) days after service is complete if this Summons
is not personally delivered to you within the State of New York. In case of your failure to answer,
judgment will be taken against you by default for the relief demanded in the Complaint.
Pursuant to CPLR §§ 501 and 503, venue in this Court is based on the fact that the
Mortgages and the other Loan Documents (each as defined in the Complaint) all provide for venue
in the courts of the State of New York, County of New York, and because a substantial part of the
events or omissions giving rise to the claim occurred in the State of New York, County of New
York.
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Dated: December 21, 2023 BENESCH, FRIEDLANDER,
New York, New York COPLAN & ARONOFF LLP
By: /s/ Michael J. Barrie
Michael J. Barrie
Justin E. Klein
Thomas Bousnakis
1155 Avenue of the Americas, 26th Floor
New York, New York 10036
T: (646) 593-7050
E: mbarrie@beneschlaw.com
justin.klein@beneschlaw.com
tbousnakis@beneschlaw.com
Attorneys for Plaintiff
TO:
JTRE 14 Vesey LLC
362 Fifth Avenue, Suite 1201
New York, New York 10001
Attention: Jack Terzi
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SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
-------------------------------- )
CPIF MRA, LLC, as successor in interest to )
CPIF LENDING, LLC, ) Index No. _____________
)
Plaintiff, ) VERIFIED COMPLAINT
)
vs )
)
JTRE 14 VESEY LLC, )
)
Defendant. )
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Plaintiff CPIF MRA, LLC, as successor in interest to CPIF Lending, LLC (“Plaintiff” or
“Lender”), for its verified complaint against Defendant JTRE 14 Vesey LLC (“Borrower” or
“Defendant”), respectfully alleges as follows:
NATURE OF THE ACTION
1. This is an action for breach of three mortgages encumbering the real property
commonly known as 14 Vesey Street, New York, New York 10017 (the “Mortgaged Real
Property”) and certain security interests in personal property owned by Borrower (the “Mortgaged
Personal Property,” and together with the Mortgaged Real Property, the “Mortgaged Property”),
due to Borrower’s failure to (i) timely pay taxes, utility charges, and insurance premiums with
respect to the Mortgaged Property; (ii) adequately manage and maintain the Mortgaged Property
in good, working condition and in a commercially reasonable manner; and (iii) repay three
commercial mortgage loans. Due to Borrower’s contractual breaches, Plaintiff seeks an order and
judgment appointing a receiver over the Mortgaged Property and otherwise enforcing the
provisions in the mortgages providing for the appointment of a receiver to take possession and
control of the Mortgaged Property, and to address the failures of Borrower set forth herein.
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PARTIES
2. Plaintiff is a Delaware limited liability company with a principal place of business
at 1910 Fairview Avenue E, Suite 200, Seattle, Washington 98102, and is the owner and holder of
the Mortgages and the other Loan Documents (each as defined herein).
3. Defendant Borrower is a Delaware limited liability company. Pursuant to the Loan
Documents, Borrower may be served at 362 Fifth Avenue, Suite 1201, New York, New York
10001. Borrower is the owner of the Mortgaged Property.
JURISDICTION AND VENUE
4. Jurisdiction and venue are appropriate because the Mortgages and the Loan
Documents (each as defined herein) all provide for venue in the courts of the state of New York,
county of New York, and Borrower irrevocably submitted to the exclusive jurisdiction of the courts
of the state of New York pursuant to the Loan Documents.
5. Venue is also proper in this Court pursuant to CPLR § 503(a) because a substantial
part of the events or omissions giving rise to the claim occurred in the state of New York, county
of New York.
FACTUAL BACKGROUND
I. THE LOANS, THE MORTGAGES, AND THE OTHER LOAN DOCUMENTS.
A. The Acquisition Loan.
6. On or about April 22, 2021, Borrower entered into that certain Acquisition Loan
Agreement (as amended, supplemented, or otherwise modified from time to time, the “Acquisition
Loan Agreement”) with CPIF Lending, LLC (“Original Lender”), pursuant to which Original
Lender agreed, among other things, to loan Defendant Borrower the original principal amount of
$18,050,000.00 (the “Acquisition Loan”) in exchange for Borrower’s agreement to, among other
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things, repay the Acquisition Loan with interest and other fees, costs, expenses, and charges. A
true and correct copy of the Acquisition Loan Agreement is attached hereto as Exhibit 1.
7. In connection with the Acquisition Loan, Borrower made, executed, and delivered
to Original Lender that certain Consolidated, Amended and Restated Promissory Note
(Acquisition Loan), dated April 22, 2021, in the original principal amount of $18,050,000.00 (as
amended, supplemented, or otherwise modified from time to time, the “Acquisition Note”). A true
and correct copy of the Acquisition Note is attached hereto as Exhibit 2.
8. To secure repayment of the Acquisition Loan, Borrower made, executed, and
delivered to Original Lender that certain Consolidated, Amended and Restated Mortgage,
Assignment of Leases and Rents, Security Agreement and Fixture Filing (Acquisition Loan), dated
as of April 22, 2021, which was recorded in the New York City Department of Finance, Office of
the City Register (the “Public Records”) on May 7, 2021, as Document Id. 2021000169358 (as
amended or corrected, the “Acquisition Mortgage”). A true and correct copy of the Acquisition
Mortgage is attached hereto as Exhibit 3.
9. On or about May 7, 2021, Original Lender recorded a UCC-1 financing statement
naming the Borrower as Debtor in the Public Records to perfect its security interest to certain
collateral for the Acquisition Loan, which financing statement was assigned Document Id.
2021000169360 (the “Borrower NY UCC-1”). A true and correct copy of the Borrower NY UCC-
1 is attached hereto as Exhibit 4.
10. On or about May 3, 2021, Original Lender also filed a UCC-1 financing statement
naming the Borrower as Debtor with the Office of the Delaware Secretary of State to perfect its
security interest to certain collateral for the Acquisition Loan, which financing statement was
recorded as filing number 20213407096 (the “Borrower DE UCC-1,” and together with the
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Borrower NY UCC-1, the “Borrower UCC-1s”). A true and correct copy of the Borrower DE
UCC-1 is attached hereto as Exhibit 5.
11. To further secure the Acquisition Loan, 14 Vesey Street Partners (Del) LLC, a
Delaware limited liability company (“Pledgor”) pledged its membership interests (including all
economic and voting rights) in Borrower to secure the prompt performance and repayment of the
Acquisition Loan and agreements under the Acquisition Loan Documents pursuant to that certain
Pledge and Security Agreement, dated as of April 22, 2021 (the “Acquisition Pledge Agreement”).
Pledgor is the sole member and 100% equity owner of Borrower and acts as the manager of
Borrower (which is a member-managed LLC). A true and correct copy of the Acquisition Pledge
Agreement is attached hereto as Exhibit 6.
12. The Acquisition Loan Agreement, Acquisition Note, Acquisition Mortgage,
Borrower UCC-1s, Acquisition Pledge Agreement, and all other documents evidencing, securing,
or guarantying the Acquisition Loan, as each may be amended, modified, or corrected, are referred
to herein as the “Acquisition Loan Documents.”
B. The Building Loan.
13. Contemporaneously with the Acquisition Loan, on or about April 22, 2021,
Borrower entered into that certain Building Loan Agreement (as amended, supplemented, or
otherwise modified from time to time, the “Building Loan Agreement”) with Original Lender,
pursuant to which Original Lender agreed, among other things, to loan Borrower the original
principal amount of $7,950,000.00 (the “Building Loan”) in exchange for Borrower’s agreement
to, among other things, repay the Building Loan with interest and other fees, costs, expenses, and
charges. A true and correct copy of the Building Loan Agreement is attached hereto as Exhibit 7.
14. In connection with the Building Loan, Borrower made, executed, and delivered to
Original Lender that certain Promissory Note (Building Loan), dated April 22, 2021, in the original
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principal amount of $7,950,000.00 (as amended, supplemented, or otherwise modified from time
to time, the “Building Note”). A true and correct copy of the Building Note is attached hereto as
Exhibit 8.
15. To secure repayment of the Building Loan, Borrower made, executed, and
delivered to Original Lender that certain Mortgage, Assignment of Leases and Rents, Security
Agreement and Fixture Filing (Building Loan), dated as of April 22, 2021, which was recorded in
the Public Records on May 26, 2021, as Document Id. 2021000195404 (as amended or corrected,
the “Building Mortgage”). A true and correct copy of the Building Mortgage is attached hereto as
Exhibit 9.
16. On or about May 7, 2021, Original Lender filed the Borrower UCC-1s to perfect
its security interest in certain collateral for the Building Loan.
17. To further secure the Building Loan, Pledgor pledged its membership interests
(including all economic and voting rights) in Borrower to secure the prompt performance and
repayment of the Building Loan and agreements under the Building Loan Documents pursuant to
that certain Pledge and Security Agreement, dated as of April 22, 2021 (the “Building Pledge
Agreement,” and together with the Acquisition Pledge Agreement, the “Pledge Agreements”). A
true and correct copy of the Building Pledge Agreement is attached hereto as Exhibit 10.
18. The Building Loan Agreement, Building Note, Building Mortgage, Borrower
UCC-1s, Building Pledge Agreement, and all other documents evidencing, securing, or
guarantying the Building Loan, as each may be amended, modified, or corrected, are referred to
herein as the “Building Loan Documents” (and together with the Acquisition Loan Documents,
the “Initial Loan Documents”).
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C. The Initial Loan Documents are Assigned to Plaintiff.
19. On or about May 19, 2021, Original Lender assigned all of its right, title, and
interest in, to, and under the Loan Documents to Plaintiff, pursuant to (i) that certain General
Assignment and Assumption, effective as of May 19, 2021, by and between Original Lender and
Plaintiff with respect to the Acquisition Loan (the “Acquisition Assignment”) and (ii) that certain
General Assignment and Assumption, effective as of May 19, 2021, by and between Original
Lender and Plaintiff with respect to the Building Loan (the “Building Assignment”). True and
correct copies of the Acquisition Assignment and the Building Assignment are attached hereto as
Exhibit 11 and Exhibit 12, respectively.
20. In connection with such assignment to Plaintiff, Original Lender recorded an
Assignment of Consolidated, Amended and Restated Mortgage, Assignment of Leases and Rents,
Security Agreement and Fixture Filing in the Public Records on July 13, 2021, as Document Id.
2021000265097, a true and correct copy of which is attached hereto as Exhibit 13.
21. Original Lender also recorded an Assignment of Mortgage, Assignment of Leases
and Rents, Security Agreement and Fixture Filing in the Public Records on July 13, 2021, as
Document Id. 2021000265099, a true and correct copy of which is attached hereto as Exhibit 14.
22. In connection with such assignment to Plaintiff, Plaintiff also filed (i) a UCC-3
Financing Statement Amendment with respect to the Borrower DE UCC-1 with the Office of the
Delaware Secretary of State under Amendment No. 20238375304 (the “Borrower DE UCC-3”)
on December 11, 2023 and (ii) a UCC-3 Financing Statement Amendment with respect to the
Borrower NY UCC-1, which was recorded in the Public Records on December 12, 2023, as
Document Id. 20231212006001 (the “Borrower NY UCC-3”). True and correct copies of the
Borrower DE UCC-3 and the Borrower NY UCC-3 are attached hereto as Exhibit 15 and Exhibit
16, respectively.
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D. The Extension Loan and the Amendment.
23. On or about November 16, 2022, Borrower entered into that certain Loan
Agreement (as amended, supplemented, or otherwise modified from time to time, the “Extension
Loan Agreement,” and together with the Acquisition Loan Agreement and the Building Loan
Agreement, the “Loan Agreements”) with Plaintiff, pursuant to which Plaintiff agreed, among
other things, to loan Borrower the original principal amount of $2,039,798.77 (the “Extension
Loan,” and together with the Building Loan and the Acquisition Loan, the “Loans”) in exchange
for Borrower’s agreement to, among other things, repay the Extension Loan with interest and other
fees, costs, expenses, and charges. A true and correct copy of the Extension Loan Agreement is
attached hereto as Exhibit 17.
24. In connection with the Extension Loan, Borrower made, executed, and delivered to
Plaintiff that certain Promissory Note, dated November 16, 2022, in the original principal amount
of $2,039,798.77 (as amended, supplemented, or otherwise modified from time to time, the
“Extension Note,” and together with the Acquisition Note and the Building Note, the “Notes”). A
true and correct copy of the Extension Note is attached hereto as Exhibit 18.
25. To secure repayment of the Extension Loan, Borrower made, executed, and
delivered to Plaintiff that certain Mortgage, Assignment of Leases and Rents, Security Agreement
and Fixture Filing, dated as of November 16, 2022, which was recorded in the Public Records on
November 21, 2022, as Document Id. 2022000429170 (as amended or corrected, the “Extension
Mortgage,” and together with the Acquisition Mortgage and the Building Mortgage, the
“Mortgages”). A true and correct copy of the Extension Mortgage is attached hereto as Exhibit
19.
26. The Extension Loan Agreement, Extension Note, Extension Mortgage, and all
other documents evidencing, securing, or guarantying the Extension Loan, as each may be
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amended, modified, or corrected, are referred to herein as the “Extension Loan Documents” (and
together with the Initial Loan Documents, the “Loan Documents”).
27. In connection with the Extension Loan, on or about November 16, 2022, Borrower,
Mr. Jack Terzi, an individual and indirect owner of Borrower who guaranteed certain obligations
owing under the Loan Documents, and Plaintiff entered into amendments to the Building Loan
Agreement and the Acquisition Loan Agreement which, among other things, extended the
Maturity Date (as defined in the Building Note and Acquisition Note) to April 30, 2023.
28. Plaintiff is the owner of the Loan Documents and successor in interest to Original
Lender for all purposes with respect to the Acquisition Loan, Building Loan, and the Initial Loan
Documents.
II. BORROWER BREACHES THE MORTGAGES AND THE OTHER LOAN
DOCUMENTS.
29. Section 2.2 of each of the Mortgages requires Borrower to pay and satisfy, among
other things, all outstanding taxes, other assessments, and utility charges that arise with respect to
the Mortgaged Property when due.
30. Section 2.3 similarly requires the Borrower to maintain adequate insurance
coverage on the Mortgaged Property, and to pay and satisfy all associated premiums when due. In
the event that Borrower fails to do so, the Mortgages entitle Plaintiff to pay any premiums that
Borrower fails to satisfy, or to procure new or replacement insurance coverage in the event
Borrower allows any existing coverage to lapse or otherwise permits the Mortgaged Property to
be underinsured.
31. Section 2.4 of the Mortgages also generally prohibits the Borrower from
abandoning the Mortgaged Property or allowing it to deteriorate in value, and requires the
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Borrower to restore, repair, and maintain the Mortgaged Property in good, working condition, and
to operate the Mortgaged Property in a commercially reasonable manner.
32. Finally, section 2.1 of each of the Mortgages requires the Borrower to satisfy all of
the Secured Obligations (as defined in the Mortgages) when due, which includes any and all
amounts due and outstanding under the Loan Agreements, the Notes, or any of the other Loan
Documents.
33. Borrower has breached each of the foregoing covenants in the Mortgages, and each
of the breaches constitutes an Event of Default under each Mortgage.
34. Specifically, each of the Loans matured on April 30, 2023 (the “Maturity Date”),
and Borrower failed to repay the Indebtedness (as defined in each of the Loan Documents) under
the Notes on or prior to the Maturity Date in accordance with Section 2.2 of the Notes (and
Borrower failed to satisfy the conditions precedent to exercising the “Extension Term” under any
of the Notes when required). This constitutes a breach of section 2.1 of the Mortgages and an
Event of Default under Section 7.1.1 and 7.1.3 of each Mortgage. As of December 20, 2023,
Borrower owes Plaintiff a total of $27,847,153.17 under the Notes, which amounts have not been
paid.
35. Borrower also failed to timely pay property taxes related to the Mortgaged Property
when due. Specifically, Borrower failed to pay the property taxes for the first half of the 2023/2024
tax year when such amounts became due on July 1, 2023. As a result, a total of $142,090.38 is
currently due but unpaid with respect to such property taxes, including fees and interest. Borrower
also failed to timely pay all utility charges and assessments when due, including past due water
charges in the amount of $11,170.33. This constitutes a breach of section 2.2 of the Mortgages
and an Event of Default under Sections 7.1.3, 7.1.8 and 7.1.13 of each Mortgage.
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36. Borrower also failed to properly maintain insurance coverage for the Mortgaged
Property when it failed to timely pay when due the property insurance premiums. Specifically, on
October 27, 2023, Plaintiff was forced to pay, from funds held by Plaintiff in reserve, a total of
$60,055.36 to satisfy unpaid insurance premiums owing on account of property insurance covering
the Mortgaged Property (the “Protective Advance”). Plaintiff notified Borrower of the Protective
Advance, and its other breaches of the Loan Documents, via letter dated November 7, 2023 (the
“November 7 Letter”). A true and correct copy of the November 7 Letter is attached hereto as
Exhibit 20. Borrower’s failure to timely satisfy these premiums constitutes a breach of section
2.3 of the Mortgages and an Event of Default under Sections 7.1.3, 7.1.9 and 7.1.13 of each
Mortgage.
37. Finally, Borrower has failed to adequately maintain the Mortgaged Real Property
in good repair, order, and condition and failed to operate the Mortgaged Property in the ordinary
course of business in accordance with sound real estate management practices, including the
performance of all ordinary and necessary maintenance and repairs. This failure constitutes an
Event of Default under Sections 7.1.3, 7.1.7, and 7.1.13 of the Mortgages.
38. The Mortgaged Real Property has had asbestos remediation performed and, upon
information and belief, no replacement insulation was installed/reinstalled, such that the
Mortgaged Real Property is not prepared for freezing temperatures. Absent work commencing
soon, the Mortgaged Real Property will not be in a position to handle inclement weather in the
upcoming winter season and is at imminent risk of material damage due to the Borrower’s failure
to properly winterize the Mortgaged Property.
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39. Borrower also failed to timely pay contractors and other service providers with
respect to services performed at the Mortgaged Real Property. Such failures have resulted in
several mechanic’s liens being recorded on the Mortgaged Real Property:
(i) On February 1, 2023, James Harb Architect P.C. recorded a mechanic’s lien
for unpaid charges totaling $42,878.17.
(ii) On April 6, 2023, New York Insulation Inc. recorded a mechanic’s lien for
unpaid charges totaling $47,147.30.
(iii) On September 8, 2023, Nouveau Elevator Industries LLC recorded a
mechanic’s lien for charges totaling $31,306.48.
40. In essence, the Borrower has abandoned the Mortgaged Property and is no longer
actively managing or protecting Lender’s collateral.
41. The foregoing failures of Borrower collectively constitute breaches of section 2.4
of each of the Mortgages and constitute an Event of Default under Sections 7.1.3, 7.1.7, 7.1.8, and
7.1.13 of the Mortgages.
42. The foregoing breaches of and Events of Default under the Mortgages by Borrower
are without privilege or justification.
43. Plaintiff has faithfully and in good faith fulfilled all of its obligations to Borrower
and has otherwise performed all acts necessary to preserve all of its rights under the Mortgages
and the other Loan Documents, and any conditions to the enforcement of the Mortgages and other
Loan Documents and commencement of this action have been satisfied or waived.
COUNT I
(Breach of Contract - Mortgages)
44. Plaintiff hereby incorporates each preceding paragraph by reference as if re-alleged
in full.
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45. The Mortgages and the other Loan Documents are valid, binding, and enforceable
agreements.
46. Plaintiff has performed all of its obligations under the Mortgages and the other Loan
Documents.
47. Borrower has breached the Mortgages based on its failure to: (i) timely satisfy
property taxes, utility charges, and other assessments when due; (ii) maintain adequate insurance
coverage for the Mortgaged Real Property and timely satisfy all necessary insurance premiums
relating thereto; (iii) pay the entire Indebtedness evidenced by the Notes on or before the Maturity
Date; and (iv) adequately manage, operate, maintain, and preserve the value of the Mortgaged Real
Property, all as more fully set forth above.
48. Each of these breaches constitutes an “Event of Default” under the Mortgages.
49. Each of the Mortgages provides that, following an Event of Default, which includes
the breach of any covenant set forth in the Mortgages or any of the other Loan Documents:
Lender shall be entitled (regardless of the adequacy of Lender’s security) to seek
the appointment of a receiver, Grantor hereby consenting to the appointment of
such receiver. Said receiver may serve without bond and may be Lender or an
employee of Lender. The receiver shall have, in addition to all the rights and powers
customarily given to and exercised by such receivers, all the rights and powers
granted to Lender in this Article VI and in Article VIII. Lender or the receiver shall
be entitled to receive a reasonable fee for so managing the Property.
Mortgages § 6.5.
50. Further, section 8.1 of the Mortgages similarly provides that:
At any time following the occurrence of a default or an Event of Default,
[Plaintiff] shall be entitled, upon petition by [Plaintiff], to the appointment of
a receiver to take possession and control of the Property or to collect the Rents,
without notice and without regard to the adequacy of the Property to secure
the Secured Obligations. Such appointment may be made either before or after
sale, without notice, without regard to the solvency or insolvency of the
[Borrower] at the time of application for such receiver and without regard to
the value of the Property or whether the same shall be then occupied as a
homestead or not, and the [Plaintiff] hereunder or any other holder of the Note
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may be appointed as such receiver. Such receiver shall have power to collect the
Rents (i) during the pendency of such foreclosure, (ii) in case of a sale and a
deficiency, during the full statutory period of redemption, whether there be
redemption or not, and (iii) during any further times when the [Borrower], but for
the intervention of such receiver, would be entitled to collect such Rents. Such
receiver also shall have all other powers and rights that may be necessary or are
usual in such cases for the protection, possession, control, management and
operation of the Property during said period, including, to the extent permitted by
law, the right to lease all or any portion of the Property for a term that extends
beyond the time of such receiver’s possession, without obtaining prior court
approval of such lease, and the right to make repairs and to make improvements
necessary or advisable in its or his opinion to preserve the Property, or to make and
keep them rentable to the best advantage, and the [Plaintiff] may advance moneys
to a receiver for such purposes. Any moneys so expended or advanced by the
[Plaintiff] or by a receiver shall be added to and become a part of the Secured
Obligations secured by this Mortgage.
Id. § 8.1.5 (emphasis added).
51. The Mortgages also provide that Lender may enforce or otherwise give effect to
any remedy or covenant contained therein. Id. § 8.1.7. Lender may also seek specific performance
of any covenant in the Mortgage. Id. § 8.17.
52. By Plaintiff’s November 7 Letter, Plaintiff delivered written notice to Borrower
that Borrower’s breaches of the Loan Documents constitute Events of Default, as defined in the
Loan Documents.
53. As a result of the existing and continuing Events of Default under the Mortgages
and the other Loan Documents, Plaintiff is entitled to the appointment of a receiver to manage and
protect the Mortgaged Property.
54. In the alternative, Plaintiff is entitled to the relief of an order directing specific
performance of Plaintiff’s contractual right to have Borrower consent to and otherwise facilitate
the appointment of a receiver for the Mortgaged Real Property.
55. No adequate remedy at law exists, because absent the prompt appointment of a
receiver for the Mortgaged Real Property, the condition and value of the Mortgaged Real Property
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are at risk of imminent deterioration. Specifically, a receiver is necessary to take possession and
control of the Mortgaged Real Property, ensure that all necessary repairs and maintenance are
performed and that the Mortgaged Real Property is secured and operated in a commercially
reasonable manner. A receiver is also necessary to ensure that all unpaid and outstanding taxes,
insurance premiums, utility charges, and other assessments with respect to the Mortgaged Real
Property are timely paid.
56. Plaintiff notes that the appointment of the receiver will only be temporary, as it is
currently pursuing a foreclosure under N.Y. UCC § 9-610 of the equity of Borrower pledged
pursuant to the Pledge Agreements. Once that public auction is complete (which Plaintiff estimates
will be no later than March 1, 2024), the new owner of the pledged equity interests—who will
automatically become the manager of Borrower—will be able to manage and protect the
Mortgaged Property, thus negating the need for a receiver.
PRAYER FOR RELIEF
WHEREFORE, Plaintiff demands judgment against Defendant as follows:
A. Ordering appointment of a receiver over the Mortgaged Property to protect
Lender’s interest in the same;
B. Otherwise requiring specific performance of Plaintiff’s contractual right to the
appointment of a receiver to take possession, custody and control over, and manage
and maintain, the Mortgaged Property (or, in the alternative, Borrower’s consent to
and facilitation of the appointment of same); and
C. Granting Plaintiff such other and further relief as the Court deems just and proper.
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RESERVATION OF RIGHTS
Plaintiff reserves all rights to amend this Complaint, to seek additional relief and assert any
additional claims, facts, or legal theories. Plaintiff further reserves the right to seek any interim or
preliminary relief from the Court, including but not limited to the appointment of a temporary
receiver for the Mortgaged Property.
Dated: December 21, 2023 BENESCH, FRIEDLANDER,
New York, New York COPLAN & ARONOFF LLP
By: /s/ Michael J. Barrie
Michael J. Barrie
Justin E. Klein
Thomas Bousnakis
1155 Avenue of the Americas, 26th Floor
New York, New York 10036
T: (646) 593-7050
E: mbarrie@beneschlaw.com
justin.klein@beneschlaw.com
tbousnakis@beneschlaw.com
Attorneys for Plaintiff
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FILED: NEW YORK COUNTY CLERK 12/21/2023 05:22 PM INDEX NO. 656413/2023 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 12/21/2023 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK -------------------------------- ) CPIF MRA, LLC, as successor in interest to ) CPIF LENDING, LLC, ) Index No. _____________ ) Plaintiff, ) SUMMONS ) vs ) ) JTRE 14 VESEY LLC, ) ) Defendant. ) --------------------------------- TO THE ABOVE-NAMED DEFENDANT: You are hereby summoned and required to serve upon the undersigned Plaintiff’s attorney an Answer to the Complaint in this action within twenty (20) days after service of this Summons, exclusive of the day of service, or within thirty (30) days after service is complete if this Summons is not personally delivered to you within the State of New York. In case of your failure to answer, judgment will be taken against you by default for the relief demanded in the Complaint. Pursuant to CPLR §§ 501 and 503, venue in this Court is based on the fact that the Mortgages and the other Loan Documents (each as defined in the Complaint) all provide for venue in the courts of the State of New York, County of New York, and because a substantial part of the events or omissions giving rise to the claim occurred in the State of New York, County of New York. [Signature Page Follows] 1 of 19 FILED: NEW YORK COUNTY CLERK 12/21/2023 05:22 PM INDEX NO. 656413/2023 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 12/21/2023 Dated: December 21, 2023 BENESCH, FRIEDLANDER, New York, New York COPLAN & ARONOFF LLP By: /s/ Michael J. Barrie Michael J. Barrie Justin E. Klein Thomas Bousnakis 1155 Avenue of the Americas, 26th Floor New York, New York 10036 T: (646) 593-7050 E: mbarrie@beneschlaw.com justin.klein@beneschlaw.com tbousnakis@beneschlaw.com Attorneys for Plaintiff TO: JTRE 14 Vesey LLC 362 Fifth Avenue, Suite 1201 New York, New York 10001 Attention: Jack Terzi 2 2 of 19 FILED: NEW YORK COUNTY CLERK 12/21/2023 05:22 PM INDEX NO. 656413/2023 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 12/21/2023 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK -------------------------------- ) CPIF MRA, LLC, as successor in interest to ) CPIF LENDING, LLC, ) Index No. _____________ ) Plaintiff, ) VERIFIED COMPLAINT ) vs ) ) JTRE 14 VESEY LLC, ) ) Defendant. ) --------------------------------- Plaintiff CPIF MRA, LLC, as successor in interest to CPIF Lending, LLC (“Plaintiff” or “Lender”), for its verified complaint against Defendant JTRE 14 Vesey LLC (“Borrower” or “Defendant”), respectfully alleges as follows: NATURE OF THE ACTION 1. This is an action for breach of three mortgages encumbering the real property commonly known as 14 Vesey Street, New York, New York 10017 (the “Mortgaged Real Property”) and certain security interests in personal property owned by Borrower (the “Mortgaged Personal Property,” and together with the Mortgaged Real Property, the “Mortgaged Property”), due to Borrower’s failure to (i) timely pay taxes, utility charges, and insurance premiums with respect to the Mortgaged Property; (ii) adequately manage and maintain the Mortgaged Property in good, working condition and in a commercially reasonable manner; and (iii) repay three commercial mortgage loans. Due to Borrower’s contractual breaches, Plaintiff seeks an order and judgment appointing a receiver over the Mortgaged Property and otherwise enforcing the provisions in the mortgages providing for the appointment of a receiver to take possession and control of the Mortgaged Property, and to address the failures of Borrower set forth herein. 3 of 19 FILED: NEW YORK COUNTY CLERK 12/21/2023 05:22 PM INDEX NO. 656413/2023 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 12/21/2023 PARTIES 2. Plaintiff is a Delaware limited liability company with a principal place of business at 1910 Fairview Avenue E, Suite 200, Seattle, Washington 98102, and is the owner and holder of the Mortgages and the other Loan Documents (each as defined herein). 3. Defendant Borrower is a Delaware limited liability company. Pursuant to the Loan Documents, Borrower may be served at 362 Fifth Avenue, Suite 1201, New York, New York 10001. Borrower is the owner of the Mortgaged Property. JURISDICTION AND VENUE 4. Jurisdiction and venue are appropriate because the Mortgages and the Loan Documents (each as defined herein) all provide for venue in the courts of the state of New York, county of New York, and Borrower irrevocably submitted to the exclusive jurisdiction of the courts of the state of New York pursuant to the Loan Documents. 5. Venue is also proper in this Court pursuant to CPLR § 503(a) because a substantial part of the events or omissions giving rise to the claim occurred in the state of New York, county of New York. FACTUAL BACKGROUND I. THE LOANS, THE MORTGAGES, AND THE OTHER LOAN DOCUMENTS. A. The Acquisition Loan. 6. On or about April 22, 2021, Borrower entered into that certain Acquisition Loan Agreement (as amended, supplemented, or otherwise modified from time to time, the “Acquisition Loan Agreement”) with CPIF Lending, LLC (“Original Lender”), pursuant to which Original Lender agreed, among other things, to loan Defendant Borrower the original principal amount of $18,050,000.00 (the “Acquisition Loan”) in exchange for Borrower’s agreement to, among other 2 4 of 19 FILED: NEW YORK COUNTY CLERK 12/21/2023 05:22 PM INDEX NO. 656413/2023 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 12/21/2023 things, repay the Acquisition Loan with interest and other fees, costs, expenses, and charges. A true and correct copy of the Acquisition Loan Agreement is attached hereto as Exhibit 1. 7. In connection with the Acquisition Loan, Borrower made, executed, and delivered to Original Lender that certain Consolidated, Amended and Restated Promissory Note (Acquisition Loan), dated April 22, 2021, in the original principal amount of $18,050,000.00 (as amended, supplemented, or otherwise modified from time to time, the “Acquisition Note”). A true and correct copy of the Acquisition Note is attached hereto as Exhibit 2. 8. To secure repayment of the Acquisition Loan, Borrower made, executed, and delivered to Original Lender that certain Consolidated, Amended and Restated Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing (Acquisition Loan), dated as of April 22, 2021, which was recorded in the New York City Department of Finance, Office of the City Register (the “Public Records”) on May 7, 2021, as Document Id. 2021000169358 (as amended or corrected, the “Acquisition Mortgage”). A true and correct copy of the Acquisition Mortgage is attached hereto as Exhibit 3. 9. On or about May 7, 2021, Original Lender recorded a UCC-1 financing statement naming the Borrower as Debtor in the Public Records to perfect its security interest to certain collateral for the Acquisition Loan, which financing statement was assigned Document Id. 2021000169360 (the “Borrower NY UCC-1”). A true and correct copy of the Borrower NY UCC- 1 is attached hereto as Exhibit 4. 10. On or about May 3, 2021, Original Lender also filed a UCC-1 financing statement naming the Borrower as Debtor with the Office of the Delaware Secretary of State to perfect its security interest to certain collateral for the Acquisition Loan, which financing statement was recorded as filing number 20213407096 (the “Borrower DE UCC-1,” and together with the 3 5 of 19 FILED: NEW YORK COUNTY CLERK 12/21/2023 05:22 PM INDEX NO. 656413/2023 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 12/21/2023 Borrower NY UCC-1, the “Borrower UCC-1s”). A true and correct copy of the Borrower DE UCC-1 is attached hereto as Exhibit 5. 11. To further secure the Acquisition Loan, 14 Vesey Street Partners (Del) LLC, a Delaware limited liability company (“Pledgor”) pledged its membership interests (including all economic and voting rights) in Borrower to secure the prompt performance and repayment of the Acquisition Loan and agreements under the Acquisition Loan Documents pursuant to that certain Pledge and Security Agreement, dated as of April 22, 2021 (the “Acquisition Pledge Agreement”). Pledgor is the sole member and 100% equity owner of Borrower and acts as the manager of Borrower (which is a member-managed LLC). A true and correct copy of the Acquisition Pledge Agreement is attached hereto as Exhibit 6. 12. The Acquisition Loan Agreement, Acquisition Note, Acquisition Mortgage, Borrower UCC-1s, Acquisition Pledge Agreement, and all other documents evidencing, securing, or guarantying the Acquisition Loan, as each may be amended, modified, or corrected, are referred to herein as the “Acquisition Loan Documents.” B. The Building Loan. 13. Contemporaneously with the Acquisition Loan, on or about April 22, 2021, Borrower entered into that certain Building Loan Agreement (as amended, supplemented, or otherwise modified from time to time, the “Building Loan Agreement”) with Original Lender, pursuant to which Original Lender agreed, among other things, to loan Borrower the original principal amount of $7,950,000.00 (the “Building Loan”) in exchange for Borrower’s agreement to, among other things, repay the Building Loan with interest and other fees, costs, expenses, and charges. A true and correct copy of the Building Loan Agreement is attached hereto as Exhibit 7. 14. In connection with the Building Loan, Borrower made, executed, and delivered to Original Lender that certain Promissory Note (Building Loan), dated April 22, 2021, in the original 4 6 of 19 FILED: NEW YORK COUNTY CLERK 12/21/2023 05:22 PM INDEX NO. 656413/2023 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 12/21/2023 principal amount of $7,950,000.00 (as amended, supplemented, or otherwise modified from time to time, the “Building Note”). A true and correct copy of the Building Note is attached hereto as Exhibit 8. 15. To secure repayment of the Building Loan, Borrower made, executed, and delivered to Original Lender that certain Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing (Building Loan), dated as of April 22, 2021, which was recorded in the Public Records on May 26, 2021, as Document Id. 2021000195404 (as amended or corrected, the “Building Mortgage”). A true and correct copy of the Building Mortgage is attached hereto as Exhibit 9. 16. On or about May 7, 2021, Original Lender filed the Borrower UCC-1s to perfect its security interest in certain collateral for the Building Loan. 17. To further secure the Building Loan, Pledgor pledged its membership interests (including all economic and voting rights) in Borrower to secure the prompt performance and repayment of the Building Loan and agreements under the Building Loan Documents pursuant to that certain Pledge and Security Agreement, dated as of April 22, 2021 (the “Building Pledge Agreement,” and together with the Acquisition Pledge Agreement, the “Pledge Agreements”). A true and correct copy of the Building Pledge Agreement is attached hereto as Exhibit 10. 18. The Building Loan Agreement, Building Note, Building Mortgage, Borrower UCC-1s, Building Pledge Agreement, and all other documents evidencing, securing, or guarantying the Building Loan, as each may be amended, modified, or corrected, are referred to herein as the “Building Loan Documents” (and together with the Acquisition Loan Documents, the “Initial Loan Documents”). 5 7 of 19 FILED: NEW YORK COUNTY CLERK 12/21/2023 05:22 PM INDEX NO. 656413/2023 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 12/21/2023 C. The Initial Loan Documents are Assigned to Plaintiff. 19. On or about May 19, 2021, Original Lender assigned all of its right, title, and interest in, to, and under the Loan Documents to Plaintiff, pursuant to (i) that certain General Assignment and Assumption, effective as of May 19, 2021, by and between Original Lender and Plaintiff with respect to the Acquisition Loan (the “Acquisition Assignment”) and (ii) that certain General Assignment and Assumption, effective as of May 19, 2021, by and between Original Lender and Plaintiff with respect to the Building Loan (the “Building Assignment”). True and correct copies of the Acquisition Assignment and the Building Assignment are attached hereto as Exhibit 11 and Exhibit 12, respectively. 20. In connection with such assignment to Plaintiff, Original Lender recorded an Assignment of Consolidated, Amended and Restated Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing in the Public Records on July 13, 2021, as Document Id. 2021000265097, a true and correct copy of which is attached hereto as Exhibit 13. 21. Original Lender also recorded an Assignment of Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing in the Public Records on July 13, 2021, as Document Id. 2021000265099, a true and correct copy of which is attached hereto as Exhibit 14. 22. In connection with such assignment to Plaintiff, Plaintiff also filed (i) a UCC-3 Financing Statement Amendment with respect to the Borrower DE UCC-1 with the Office of the Delaware Secretary of State under Amendment No. 20238375304 (the “Borrower DE UCC-3”) on December 11, 2023 and (ii) a UCC-3 Financing Statement Amendment with respect to the Borrower NY UCC-1, which was recorded in the Public Records on December 12, 2023, as Document Id. 20231212006001 (the “Borrower NY UCC-3”). True and correct copies of the Borrower DE UCC-3 and the Borrower NY UCC-3 are attached hereto as Exhibit 15 and Exhibit 16, respectively. 6 8 of 19 FILED: NEW YORK COUNTY CLERK 12/21/2023 05:22 PM INDEX NO. 656413/2023 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 12/21/2023 D. The Extension Loan and the Amendment. 23. On or about November 16, 2022, Borrower entered into that certain Loan Agreement (as amended, supplemented, or otherwise modified from time to time, the “Extension Loan Agreement,” and together with the Acquisition Loan Agreement and the Building Loan Agreement, the “Loan Agreements”) with Plaintiff, pursuant to which Plaintiff agreed, among other things, to loan Borrower the original principal amount of $2,039,798.77 (the “Extension Loan,” and together with the Building Loan and the Acquisition Loan, the “Loans”) in exchange for Borrower’s agreement to, among other things, repay the Extension Loan with interest and other fees, costs, expenses, and charges. A true and correct copy of the Extension Loan Agreement is attached hereto as Exhibit 17. 24. In connection with the Extension Loan, Borrower made, executed, and delivered to Plaintiff that certain Promissory Note, dated November 16, 2022, in the original principal amount of $2,039,798.77 (as amended, supplemented, or otherwise modified from time to time, the “Extension Note,” and together with the Acquisition Note and the Building Note, the “Notes”). A true and correct copy of the Extension Note is attached hereto as Exhibit 18. 25. To secure repayment of the Extension Loan, Borrower made, executed, and delivered to Plaintiff that certain Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing, dated as of November 16, 2022, which was recorded in the Public Records on November 21, 2022, as Document Id. 2022000429170 (as amended or corrected, the “Extension Mortgage,” and together with the Acquisition Mortgage and the Building Mortgage, the “Mortgages”). A true and correct copy of the Extension Mortgage is attached hereto as Exhibit 19. 26. The Extension Loan Agreement, Extension Note, Extension Mortgage, and all other documents evidencing, securing, or guarantying the Extension Loan, as each may be 7 9 of 19 FILED: NEW YORK COUNTY CLERK 12/21/2023 05:22 PM INDEX NO. 656413/2023 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 12/21/2023 amended, modified, or corrected, are referred to herein as the “Extension Loan Documents” (and together with the Initial Loan Documents, the “Loan Documents”). 27. In connection with the Extension Loan, on or about November 16, 2022, Borrower, Mr. Jack Terzi, an individual and indirect owner of Borrower who guaranteed certain obligations owing under the Loan Documents, and Plaintiff entered into amendments to the Building Loan Agreement and the Acquisition Loan Agreement which, among other things, extended the Maturity Date (as defined in the Building Note and Acquisition Note) to April 30, 2023. 28. Plaintiff is the owner of the Loan Documents and successor in interest to Original Lender for all purposes with respect to the Acquisition Loan, Building Loan, and the Initial Loan Documents. II. BORROWER BREACHES THE MORTGAGES AND THE OTHER LOAN DOCUMENTS. 29. Section 2.2 of each of the Mortgages requires Borrower to pay and satisfy, among other things, all outstanding taxes, other assessments, and utility charges that arise with respect to the Mortgaged Property when due. 30. Section 2.3 similarly requires the Borrower to maintain adequate insurance coverage on the Mortgaged Property, and to pay and satisfy all associated premiums when due. In the event that Borrower fails to do so, the Mortgages entitle Plaintiff to pay any premiums that Borrower fails to satisfy, or to procure new or replacement insurance coverage in the event Borrower allows any existing coverage to lapse or otherwise permits the Mortgaged Property to be underinsured. 31. Section 2.4 of the Mortgages also generally prohibits the Borrower from abandoning the Mortgaged Property or allowing it to deteriorate in value, and requires the 8 10 of 19 FILED: NEW YORK COUNTY CLERK 12/21/2023 05:22 PM INDEX NO. 656413/2023 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 12/21/2023 Borrower to restore, repair, and maintain the Mortgaged Property in good, working condition, and to operate the Mortgaged Property in a commercially reasonable manner. 32. Finally, section 2.1 of each of the Mortgages requires the Borrower to satisfy all of the Secured Obligations (as defined in the Mortgages) when due, which includes any and all amounts due and outstanding under the Loan Agreements, the Notes, or any of the other Loan Documents. 33. Borrower has breached each of the foregoing covenants in the Mortgages, and each of the breaches constitutes an Event of Default under each Mortgage. 34. Specifically, each of the Loans matured on April 30, 2023 (the “Maturity Date”), and Borrower failed to repay the Indebtedness (as defined in each of the Loan Documents) under the Notes on or prior to the Maturity Date in accordance with Section 2.2 of the Notes (and Borrower failed to satisfy the conditions precedent to exercising the “Extension Term” under any of the Notes when required). This constitutes a breach of section 2.1 of the Mortgages and an Event of Default under Section 7.1.1 and 7.1.3 of each Mortgage. As of December 20, 2023, Borrower owes Plaintiff a total of $27,847,153.17 under the Notes, which amounts have not been paid. 35. Borrower also failed to timely pay property taxes related to the Mortgaged Property when due. Specifically, Borrower failed to pay the property taxes for the first half of the 2023/2024 tax year when such amounts became due on July 1, 2023. As a result, a total of $142,090.38 is currently due but unpaid with respect to such property taxes, including fees and interest. Borrower also failed to timely pay all utility charges and assessments when due, including past due water charges in the amount of $11,170.33. This constitutes a breach of section 2.2 of the Mortgages and an Event of Default under Sections 7.1.3, 7.1.8 and 7.1.13 of each Mortgage. 9 11 of 19 FILED: NEW YORK COUNTY CLERK 12/21/2023 05:22 PM INDEX NO. 656413/2023 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 12/21/2023 36. Borrower also failed to properly maintain insurance coverage for the Mortgaged Property when it failed to timely pay when due the property insurance premiums. Specifically, on October 27, 2023, Plaintiff was forced to pay, from funds held by Plaintiff in reserve, a total of $60,055.36 to satisfy unpaid insurance premiums owing on account of property insurance covering the Mortgaged Property (the “Protective Advance”). Plaintiff notified Borrower of the Protective Advance, and its other breaches of the Loan Documents, via letter dated November 7, 2023 (the “November 7 Letter”). A true and correct copy of the November 7 Letter is attached hereto as Exhibit 20. Borrower’s failure to timely satisfy these premiums constitutes a breach of section 2.3 of the Mortgages and an Event of Default under Sections 7.1.3, 7.1.9 and 7.1.13 of each Mortgage. 37. Finally, Borrower has failed to adequately maintain the Mortgaged Real Property in good repair, order, and condition and failed to operate the Mortgaged Property in the ordinary course of business in accordance with sound real estate management practices, including the performance of all ordinary and necessary maintenance and repairs. This failure constitutes an Event of Default under Sections 7.1.3, 7.1.7, and 7.1.13 of the Mortgages. 38. The Mortgaged Real Property has had asbestos remediation performed and, upon information and belief, no replacement insulation was installed/reinstalled, such that the Mortgaged Real Property is not prepared for freezing temperatures. Absent work commencing soon, the Mortgaged Real Property will not be in a position to handle inclement weather in the upcoming winter season and is at imminent risk of material damage due to the Borrower’s failure to properly winterize the Mortgaged Property. 10 12 of 19 FILED: NEW YORK COUNTY CLERK 12/21/2023 05:22 PM INDEX NO. 656413/2023 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 12/21/2023 39. Borrower also failed to timely pay contractors and other service providers with respect to services performed at the Mortgaged Real Property. Such failures have resulted in several mechanic’s liens being recorded on the Mortgaged Real Property: (i) On February 1, 2023, James Harb Architect P.C. recorded a mechanic’s lien for unpaid charges totaling $42,878.17. (ii) On April 6, 2023, New York Insulation Inc. recorded a mechanic’s lien for unpaid charges totaling $47,147.30. (iii) On September 8, 2023, Nouveau Elevator Industries LLC recorded a mechanic’s lien for charges totaling $31,306.48. 40. In essence, the Borrower has abandoned the Mortgaged Property and is no longer actively managing or protecting Lender’s collateral. 41. The foregoing failures of Borrower collectively constitute breaches of section 2.4 of each of the Mortgages and constitute an Event of Default under Sections 7.1.3, 7.1.7, 7.1.8, and 7.1.13 of the Mortgages. 42. The foregoing breaches of and Events of Default under the Mortgages by Borrower are without privilege or justification. 43. Plaintiff has faithfully and in good faith fulfilled all of its obligations to Borrower and has otherwise performed all acts necessary to preserve all of its rights under the Mortgages and the other Loan Documents, and any conditions to the enforcement of the Mortgages and other Loan Documents and commencement of this action have been satisfied or waived. COUNT I (Breach of Contract - Mortgages) 44. Plaintiff hereby incorporates each preceding paragraph by reference as if re-alleged in full. 11 13 of 19 FILED: NEW YORK COUNTY CLERK 12/21/2023 05:22 PM INDEX NO. 656413/2023 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 12/21/2023 45. The Mortgages and the other Loan Documents are valid, binding, and enforceable agreements. 46. Plaintiff has performed all of its obligations under the Mortgages and the other Loan Documents. 47. Borrower has breached the Mortgages based on its failure to: (i) timely satisfy property taxes, utility charges, and other assessments when due; (ii) maintain adequate insurance coverage for the Mortgaged Real Property and timely satisfy all necessary insurance premiums relating thereto; (iii) pay the entire Indebtedness evidenced by the Notes on or before the Maturity Date; and (iv) adequately manage, operate, maintain, and preserve the value of the Mortgaged Real Property, all as more fully set forth above. 48. Each of these breaches constitutes an “Event of Default” under the Mortgages. 49. Each of the Mortgages provides that, following an Event of Default, which includes the breach of any covenant set forth in the Mortgages or any of the other Loan Documents: Lender shall be entitled (regardless of the adequacy of Lender’s security) to seek the appointment of a receiver, Grantor hereby consenting to the appointment of such receiver. Said receiver may serve without bond and may be Lender or an employee of Lender. The receiver shall have, in addition to all the rights and powers customarily given to and exercised by such receivers, all the rights and powers granted to Lender in this Article VI and in Article VIII. Lender or the receiver shall be entitled to receive a reasonable fee for so managing the Property. Mortgages § 6.5. 50. Further, section 8.1 of the Mortgages similarly provides that: At any time following the occurrence of a default or an Event of Default, [Plaintiff] shall be entitled, upon petition by [Plaintiff], to the appointment of a receiver to take possession and control of the Property or to collect the Rents, without notice and without regard to the adequacy of the Property to secure the Secured Obligations. Such appointment may be made either before or after sale, without notice, without regard to the solvency or insolvency of the [Borrower] at the time of application for such receiver and without regard to the value of the Property or whether the same shall be then occupied as a homestead or not, and the [Plaintiff] hereunder or any other holder of the Note 12 14 of 19 FILED: NEW YORK COUNTY CLERK 12/21/2023 05:22 PM INDEX NO. 656413/2023 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 12/21/2023 may be appointed as such receiver. Such receiver shall have power to collect the Rents (i) during the pendency of such foreclosure, (ii) in case of a sale and a deficiency, during the full statutory period of redemption, whether there be redemption or not, and (iii) during any further times when the [Borrower], but for the intervention of such receiver, would be entitled to collect such Rents. Such receiver also shall have all other powers and rights that may be necessary or are usual in such cases for the protection, possession, control, management and operation of the Property during said period, including, to the extent permitted by law, the right to lease all or any portion of the Property for a term that extends beyond the time of such receiver’s possession, without obtaining prior court approval of such lease, and the right to make repairs and to make improvements necessary or advisable in its or his opinion to preserve the Property, or to make and keep them rentable to the best advantage, and the [Plaintiff] may advance moneys to a receiver for such purposes. Any moneys so expended or advanced by the [Plaintiff] or by a receiver shall be added to and become a part of the Secured Obligations secured by this Mortgage. Id. § 8.1.5 (emphasis added). 51. The Mortgages also provide that Lender may enforce or otherwise give effect to any remedy or covenant contained therein. Id. § 8.1.7. Lender may also seek specific performance of any covenant in the Mortgage. Id. § 8.17. 52. By Plaintiff’s November 7 Letter, Plaintiff delivered written notice to Borrower that Borrower’s breaches of the Loan Documents constitute Events of Default, as defined in the Loan Documents. 53. As a result of the existing and continuing Events of Default under the Mortgages and the other Loan Documents, Plaintiff is entitled to the appointment of a receiver to manage and protect the Mortgaged Property. 54. In the alternative, Plaintiff is entitled to the relief of an order directing specific performance of Plaintiff’s contractual right to have Borrower consent to and otherwise facilitate the appointment of a receiver for the Mortgaged Real Property. 55. No adequate remedy at law exists, because absent the prompt appointment of a receiver for the Mortgaged Real Property, the condition and value of the Mortgaged Real Property 13 15 of 19 FILED: NEW YORK COUNTY CLERK 12/21/2023 05:22 PM INDEX NO. 656413/2023 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 12/21/2023 are at risk of imminent deterioration. Specifically, a receiver is necessary to take possession and control of the Mortgaged Real Property, ensure that all necessary repairs and maintenance are performed and that the Mortgaged Real Property is secured and operated in a commercially reasonable manner. A receiver is also necessary to ensure that all unpaid and outstanding taxes, insurance premiums, utility charges, and other assessments with respect to the Mortgaged Real Property are timely paid. 56. Plaintiff notes that the appointment of the receiver will only be temporary, as it is currently pursuing a foreclosure under N.Y. UCC § 9-610 of the equity of Borrower pledged pursuant to the Pledge Agreements. Once that public auction is complete (which Plaintiff estimates will be no later than March 1, 2024), the new owner of the pledged equity interests—who will automatically become the manager of Borrower—will be able to manage and protect the Mortgaged Property, thus negating the need for a receiver. PRAYER FOR RELIEF WHEREFORE, Plaintiff demands judgment against Defendant as follows: A. Ordering appointment of a receiver over the Mortgaged Property to protect Lender’s interest in the same; B. Otherwise requiring specific performance of Plaintiff’s contractual right to the appointment of a receiver to take possession, custody and control over, and manage and maintain, the Mortgaged Property (or, in the alternative, Borrower’s consent to and facilitation of the appointment of same); and C. Granting Plaintiff such other and further relief as the Court deems just and proper. 14 16 of 19 FILED: NEW YORK COUNTY CLERK 12/21/2023 05:22 PM INDEX NO. 656413/2023 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 12/21/2023 RESERVATION OF RIGHTS Plaintiff reserves all rights to amend this Complaint, to seek additional relief and assert any additional claims, facts, or legal theories. Plaintiff further reserves the right to seek any interim or preliminary relief from the Court, including but not limited to the appointment of a temporary receiver for the Mortgaged Property. Dated: December 21, 2023 BENESCH, FRIEDLANDER, New York, New York COPLAN & ARONOFF LLP By: /s/ Michael J. Barrie Michael J. Barrie Justin E. Klein Thomas Bousnakis 1155 Avenue of the Americas, 26th Floor New York, New York 10036 T: (646) 593-7050 E: mbarrie@beneschlaw.com justin.klein@beneschlaw.com tbousnakis@beneschlaw.com Attorneys for Plaintiff 15 17 of 19 FILED: NEW YORK COUNTY CLERK 12/21/2023 05:22 PM INDEX NO. 656413/2023 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 12/21/2023 18 of 19 FILED: NEW YORK COUNTY CLERK 12/21/2023 05:22 PM INDEX NO. 656413/2023 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 12/21/2023 19 of 19