Preview
FILED: CLINTON COUNTY CLERK 01/30/2024 08:29 PM INDEX NO. 2024-00022744
NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 01/30/2024
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF CLINTON
MARANDA IRREVOCABLE TRUST Index No. _______________
Plaintiff, SUMMONS
v.
ZAFRA LLC, RYAN BRIENZA, GREG BRIENZA
Defendant.
TO THE ABOVE-NAMED DEFENDANT:
YOU ARE HEREBY SUMMONED to answer the complaint in this action and to serve
a copy of your answer, or, if the complaint is not served with this summons, to serve a notice of
appearance, on the plaintiff’s attorneys within 20 days after service of this summons, exclusive
of the day of service (or within 30 days after the service is complete if this summons is not
personally delivered to you within the State of New York); and in case of your failure to appear
or answer, judgment will be taken against you by default for the relief demanded in the
complaint.
The basis of venue is CPLR § 503(a).
Dated: New York, New York
January 30, 2024 GAMBOURG & READ, P.C.
By:_____________________
Michael Pepin, Esq.
One World Trade Center, 85th Floor
New York, New York 10007
Phone: (212) 937-7788
Email: mp@glegalgroup.com
Attorneys for Plaintiff
Maranda Irrevocable Trust
Defendant’s Name & Address:
ZAFRA LLC
126 Idaho Ave
Plattsburgh, NY 12903
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SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF CLINTON
MARANDA IRREVOCABLE TRUST Index No. _______________
Plaintiff, COMPLAINT
v.
ZAFRA LLC, RYAN BRIENZA, GREG BRIENZA
Defendant.
TO THE SUPREME COURT OF THE STATE OF NEW YORK
Plaintiffs, MARANDA IRREVOCABLE TRUST, (“Plaintiffs”) complaining of
defendants, by his attorneys Gambourg & Read, for its Complaint against defendant ZAFRA, LLC,
(“Defendant”), respectfully shows this Court and alleges as follows, upon knowledge of Defendant
and its conduct, and upon information and belief as to all other matters:
INTRODUCTION
1. This is an action arising out of an implied contract between Plaintiffs and
Defendant. Defendant’s refusal to honor the implied contract with Plaintiffs, despite making
numerous promises to Plaintiffs regarding the implied contract, and Plaintiff reasonably relying
on said promises and making significant consideration towards said implied contract in the form
of more than $500,000.00 in payments to Defendant.
2. Plaintiffs seek monetary damages against Defendant as a result of Defendant’s
refusal to honor the implied contract entered into with Plaintiffs, and being unjustly enriched by
payments made by Plaintiffs toward said implied contract.
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PARTIES
3. Plaintiff MARANDA IRREVOCABLE TRUST is a TRUST, form in the city of
New York, New York County of, and State of New York.
4. Defendant ZAFRA, LLC, is a New York domestic limited liability company, with
its principal place of business in the City of Plattsburgh, County of Clinton, State of New York.
JURISDICTION AND VENUE
5. The Court has jurisdiction over Defendant pursuant to CPLR § 301 because
Defendant has a principal place of business in the county of Clinton, State of New York, pursuant
to CPLR § 302(a)(1) because Defendant transacts business within the state and county of New
York, and pursuant to CPLR § 302(a)(4) because Defendant uses and/or possesses real property
within the county of Clinton, State of New York.
6. Accordingly, the venue is proper in this Court pursuant to CPLR § 503.
FACTUAL BACKGROUND
7. One of Plaintiffs’ businesses is the “mining” of Bitcoin, a type of cryptocurrency
coin.
8. “Mining” cryptocurrency coins is a very different process from mining for a
physical asset like gold or silver. For cryptocurrency miners like to obtain new coins, they must
deploy machines that solve complex mathematical equations. These equations take the form of
cryptographic hashes, which are digital signatures of information transferred on a public network.
Miners compete with each other to identify a hash value generated by a cryptocurrency coin
transaction; the first miner to solve the equation can add a block to a distributed ledger and receive
a coin.
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9. Critical to mining cryptocurrency, then, is possessing and operating computers,
known as Miners, with special software designed to solve these equations. Like any computer,
these Miners run on electricity, and deploying a large number of Miners requires substantial
quantities of electricity.
10. “Hosts” are businesses that provide physical space for Miners and access to large
quantities of electricity. Typically, a cryptocurrency mining firm will place its Miners at a host’s
site pursuant to a hosting agreement, which specifies the terms on which the host will provide
physical space and electricity. The terms of these agreements—including the price at which space
and electricity will be provided by the host—are critical to determining the profitability of a mining
operation.
11. Upon information and belief, Defendant is a cryptocurrency hosting company,
which owns and/or operates physical spaces in which third parties can conduct cryptocurrency
mining pursuant to hosting agreements.
12. Upon information and belief, Defendant entered into a lease agreement (“Lease”)
on or about December 15, 2017, for the possession and use of a piece of real property located at
46 Power Dam Way, Plattsburgh, in the County of Clinton, in the State of New York (“Property”),
with the owner of the Property, Main Mill Street Investments, LLC (“Lessor”).
13. Upon information and belief, Defendant entered into the Lease for the purposes of
hosting, operating, conducting cryptocurrency mining at the Property.
14. Upon information and belief, between December 2017 and April 2021, Defendant’s
business in the Property was suffering due to the decrease in the market price of Bitcoin, and
Defendant required a significant infusion of funds to continue to conduct mining operations at the
Property.
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15. Upon information and belief, Defendant also required approximately $300,000.00
to complete a “buildout” on the Property, which would be necessary to make the Property
functional as a cryptocurrency mining site.
16. Upon information and belief, on or about February 2021, the parties herein began
an extended negotiation process for the utilization of the Property for mining, including, but not
limited to, Plaintiff’s access to the Property for mining, purchase and sale of mining equipment for
use on the Property, mining by third party customers, and possible investments in the Property to
increase mining capacity.
17. By email dated March 4, 2021, Ryan Brienza, CEO of Defendant Zafra, LLC, wrote
to Defendant describing the current condition of the Property, with regards to its capabilities for
mining cryptocurrencies, stating that their current estimate to build out the Property is $250,000.00
to $300,000.00.
18. On or about April 2021, the parties executed a letter of intent, or “term sheet”
agreement (“Term Sheet”), in contemplation of a formal sublease agreement for the Property,
wherein Plaintiff would be the sublessee and Defendant would be the sublessor.
19. The stated objective of the Term Sheet was, in part, to “provide for certain internal
improvements for cryptocurrency/data mining operations to be conducted at the Property by
[Plaintiff] upon the terms and conditions herein.”
20. The Term Sheet set forth a number of conditions and terms that would be part of a
sublease agreement between the parties, including, but not limited to Defendant obtaining a
renewal of its then current lease on the Property, Plaintiff making a $100,000.00 deposit upon the
execution of the sublease, to be applied to “the alterations” on the Property, and Plaintiff will pay
for the remaining alterations to the Property by a $100,000.00 payment made thirty (30) days after
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the execution of the sublease, and another $100,000.00 payment sixty (60) days after the execution
of the sublease.
21. Plaintiff executed the Term Sheet with the expectation that if Plaintiff honored its
terms and conditions, so would Defendant.
22. Subsequent to the execution of the Term Sheet, there were ongoing negotiations
between the parties and third parties regarding financing for the necessary improvements to
Property, obtaining the funds necessary for both the renewal of the lease and the equipment
necessary for mining at the Property.
23. By email dated July 6, 2021, Alexander Lundgren, Head of Business Development
for Defendant, notified Plaintiffs that he spoke with the “lender” and they want to have an
“additional guarantor” before we can “get rolling.”
24. Upon information and belief, Lessor would not renew the Lease without additional
guarantor(s) because Defendant’s income and credit were insufficient.
25. On or about July 8, 2021, Plaintiff submitted the financial documentation requested
by the lender, including personal tax returns, in order to become an additional guarantor to the
Defendant’s lease, with the expectation that the Term Sheet would be honored by all parties.
26. On or about July 16, 2021, Plaintiff executed a “Guaranty of Lease” as one of three
(3) “Guarantors” for the renewal of the 2017 Lease Defendant entered into with Lessor.
27. The other two (2) Guarantors are Ryan Brienza, CEO of Defendant, and Greg
Brienza, Director of Engineering for Defendant.
28. The Guaranty of Lease states, “WHEREAS, Lessor would not execute the Lease
if Guarantors did not execute and deliver to Lessor this Guaranty of Lease.”
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29. Upon information and belief, but for Plaintiff executing a personal guaranty for
Defendant’s Lease, Defendant would not have been able to obtain a renewal of the 2017 Lease.
30. Pursuant to the terms of the Term Sheet executed by the parties, and with the
expectation of a sublease agreement for the Property, on or about July 26, 2021, Plaintiff made a
payment of $100,533.45 to Defendant for the first installment of the “Buildout”, or improvements
to the Property.
31. On or about August 2021, Plaintiff was granted full access to the Property to
conduct mining operations, and to have third-party customers conduct mining operations at the
Property.
32. Pursuant to the Term Sheet, after Plaintiff’s initial “buildout” payment to
Defendant, between August and December 2022, and with the expectation of a sublease agreement
for the Property, Plaintiff made a total of $678,910.82 in payments to Defendant for improvements
to the Property, and a deposit to guaranty adequate power supply to the Property for mining
operations.
33. Beginning in mid-November 2021, the market value of Bitcoin began a steady
decline from an historic high of more than $64,000 per coin, to less than $17,000 by the end of
2022.
34. The profitability of a Bitcoin mining operation such as that at the Property at issue
herein is dependent on the market value of Bitcoin.
35. Upon information and belief, on or about November 2021, the parties agreed that
Plaintiff would leave the Property for approximately one year, during which time Defendant would
utilize the space then-occupied by Plaintiff and its customers, so that Defendant could have
additional third-party customers mining on the Property, pursuant to the Term Sheet.
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36. Plaintiff made this agreement pursuant to the Term Sheet, and with the expectation
of returning to the Property in November 2023 with a formal, executed sublease agreement with
Defendant.
37. Upon information and belief, Plaintiffs’ expectation of returning to the Property
and entering into a formal sublease agreement was based on the repeated assurances of Defendant.
38. While physically absent from the Property, Plaintiffs nevertheless continued to
make substantial payments to Defendant, pursuant to the Term Sheet, for improvements to the
Property.
39. Upon information and belief, the payments Plaintiff made to Defendant between
November 2021 and December 2022 totaled $393,831.66.
40. Subsequently, leading up to Plaintiff’s planned return to the Property in November
2023, in negotiating and drafting the proposed sublease agreement with Plaintiff, Defendant and/or
Defendant’s agents repeatedly altered the terms and conditions set forth in the Term Sheet to
increasingly unreasonable terms.
41. Upon information and belief, Defendant continuously altered the terms of the Term
Sheet to keep Plaintiff out of the Property, due to the steady increase in the market value of Bitcoin
from January 2023, in order to keep the increased profits of the mining operations at the Property
for Defendant.
42. Plaintiff’s planned return to the Property in November 2023 was delayed due to the
repeated changing of the proposed sublease terms by Defendant.
43. At each turn, Plaintiff begrudgingly agreed to the proposed alterations of the terms
set forth in the Term Sheet, only to have Defendant add more onerous terms.
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44. In preparation for the expected return to the Property in November 2023, Plaintiff
secured mining equipment at a cost of $1,000,000.00, and the inability to use said mining
equipment damaged and continues to damage Plaintiff.
45. After numerous alterations to the Term Sheet, proposals and counter-proposals,
Plaintiff agreed to delay its return to the Property to January 3, 2024 to settle the disputes in the
proposed sublease agreement terms.
46. Defendant’s delay tactics culminated in last minute changes, each of which Plaintiff
agreed to via email prior to its planned return to the Property on January 3, 2023, when Plaintiff
was able enter the Property with its mining equipment.
47. Defendant then had Plaintiff, its contractors and its property forcibly ejected from
the Property, with threats of police action in a civil, tenant and subtenant manner.
48. Plaintiff was damaged, and continues to be damaged by Defendant’s failure to abide
by the agreements between the parties.
AS AND FOR A FIRST CAUSE OF ACTION
(Breach of Implied Contract)
49. Plaintiff repeats each and every allegation in the preceding paragraphs as if fully
set forth herein.
50. The Term Sheet entered into by Plaintiff and Defendant, the parties created and
agreed to a valid offer for a specific amount of funds in return for Plaintiff’s use of the Property.
51. Pursuant to the terms and conditions set forth in the Term Sheet, and with the
reasonable expectation of a formal sublease agreement, valid consideration was paid by Plaintiffs
in the form of payments to Defendant totaling $678,910.82.
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52. Defendant accepted Plaintiffs’ consideration by applying the funds to
improvements in the Property and down payments to secure adequate power supply for mining
operations at the Property.
53. Defendant further accepted Plaintiff’s consideration by granting Plaintiff and its
third-party customers access to and full use of the Property for mining operations.
54. The valid offer, acceptance, and consideration herein created an implied contract
between the parties.
55. Plaintiffs reasonably relied on the implied contract with Defendant based on
Defendant’s actions of accepting Plaintiffs’ payments, using said payments to improve the
Property, and allowing Plaintiff and its customers access to and use of the Property between August
and November 2021.
56. Defendant breached the implied contract with Plaintiffs by refusing to execute a
valid sublease agreement and improperly ejecting Plaintiff from the Property.
WHEREFORE, Plaintiff demands judgment against Defendant as follows:
a. Awarding Plaintiff monetary damages of $678,910.82 for damages resulting from
Plaintiff’s unreimbursed payments;
b. Awarding Plaintiff monetary damages in an amount to be determined at trial for the
cost of delay of the execution of the sublease agreement;
c. Awarding Plaintiff reasonable attorneys’ fees, costs, allowances and disbursements;
d. Awarding Plaintiff such other and further relief as to the Court may seem just and
proper.
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AS AND FOR THE SECOND CAUSE OF ACTION
(Unjust Enrichment)
57. Plaintiff repeats each and every allegation in the preceding paragraphs as if fully
set forth herein.
58. Defendant, by renewing the 2017 Lease with Lessor Main Mill Street Investments,
LLC with the personal guaranty of Plaintiff Michal Maranda, were unjustly enriched in the use of
the Property for mining operations and the profits made from said use.
59. Defendant, by accepting payments from Plaintiff pursuant to the Term Sheet, while
simultaneously refusing to allow Plaintiff to gain the benefits of the Property, were unjustly
enriched in the amount of payments made by Plaintiff to Defendant.
WHEREFORE, Plaintiff demands judgment against Defendant as follows:
e. Awarding Plaintiff monetary damages in an amount to be determined at trial;
f. Awarding Plaintiff reasonable attorneys’ fees, costs, allowances and disbursements;
g. Awarding Plaintiff such other and further relief as to the Court may seem just and
proper.
DATED: New York, New York
January 30, 2024
GAMBOURG & READ, PC
By:/s/Michael Pepin
Michael Pepin, Esq.
One World Trade Center, 85th Floor
New York, NY 10007
mp@glegalgroup.com
O:212-937-7788
F:212-937-2117
Attorneys for Plaintiff
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Preview
FILED: CLINTON COUNTY CLERK 01/30/2024 08:29 PM INDEX NO. 2024-00022744 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 01/30/2024 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF CLINTON MARANDA IRREVOCABLE TRUST Index No. _______________ Plaintiff, SUMMONS v. ZAFRA LLC, RYAN BRIENZA, GREG BRIENZA Defendant. TO THE ABOVE-NAMED DEFENDANT: YOU ARE HEREBY SUMMONED to answer the complaint in this action and to serve a copy of your answer, or, if the complaint is not served with this summons, to serve a notice of appearance, on the plaintiff’s attorneys within 20 days after service of this summons, exclusive of the day of service (or within 30 days after the service is complete if this summons is not personally delivered to you within the State of New York); and in case of your failure to appear or answer, judgment will be taken against you by default for the relief demanded in the complaint. The basis of venue is CPLR § 503(a). Dated: New York, New York January 30, 2024 GAMBOURG & READ, P.C. By:_____________________ Michael Pepin, Esq. One World Trade Center, 85th Floor New York, New York 10007 Phone: (212) 937-7788 Email: mp@glegalgroup.com Attorneys for Plaintiff Maranda Irrevocable Trust Defendant’s Name & Address: ZAFRA LLC 126 Idaho Ave Plattsburgh, NY 12903 1 of 11 FILED: CLINTON COUNTY CLERK 01/30/2024 08:29 PM INDEX NO. 2024-00022744 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 01/30/2024 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF CLINTON MARANDA IRREVOCABLE TRUST Index No. _______________ Plaintiff, COMPLAINT v. ZAFRA LLC, RYAN BRIENZA, GREG BRIENZA Defendant. TO THE SUPREME COURT OF THE STATE OF NEW YORK Plaintiffs, MARANDA IRREVOCABLE TRUST, (“Plaintiffs”) complaining of defendants, by his attorneys Gambourg & Read, for its Complaint against defendant ZAFRA, LLC, (“Defendant”), respectfully shows this Court and alleges as follows, upon knowledge of Defendant and its conduct, and upon information and belief as to all other matters: INTRODUCTION 1. This is an action arising out of an implied contract between Plaintiffs and Defendant. Defendant’s refusal to honor the implied contract with Plaintiffs, despite making numerous promises to Plaintiffs regarding the implied contract, and Plaintiff reasonably relying on said promises and making significant consideration towards said implied contract in the form of more than $500,000.00 in payments to Defendant. 2. Plaintiffs seek monetary damages against Defendant as a result of Defendant’s refusal to honor the implied contract entered into with Plaintiffs, and being unjustly enriched by payments made by Plaintiffs toward said implied contract. 1 2 of 11 FILED: CLINTON COUNTY CLERK 01/30/2024 08:29 PM INDEX NO. 2024-00022744 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 01/30/2024 PARTIES 3. Plaintiff MARANDA IRREVOCABLE TRUST is a TRUST, form in the city of New York, New York County of, and State of New York. 4. Defendant ZAFRA, LLC, is a New York domestic limited liability company, with its principal place of business in the City of Plattsburgh, County of Clinton, State of New York. JURISDICTION AND VENUE 5. The Court has jurisdiction over Defendant pursuant to CPLR § 301 because Defendant has a principal place of business in the county of Clinton, State of New York, pursuant to CPLR § 302(a)(1) because Defendant transacts business within the state and county of New York, and pursuant to CPLR § 302(a)(4) because Defendant uses and/or possesses real property within the county of Clinton, State of New York. 6. Accordingly, the venue is proper in this Court pursuant to CPLR § 503. FACTUAL BACKGROUND 7. One of Plaintiffs’ businesses is the “mining” of Bitcoin, a type of cryptocurrency coin. 8. “Mining” cryptocurrency coins is a very different process from mining for a physical asset like gold or silver. For cryptocurrency miners like to obtain new coins, they must deploy machines that solve complex mathematical equations. These equations take the form of cryptographic hashes, which are digital signatures of information transferred on a public network. Miners compete with each other to identify a hash value generated by a cryptocurrency coin transaction; the first miner to solve the equation can add a block to a distributed ledger and receive a coin. 2 3 of 11 FILED: CLINTON COUNTY CLERK 01/30/2024 08:29 PM INDEX NO. 2024-00022744 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 01/30/2024 9. Critical to mining cryptocurrency, then, is possessing and operating computers, known as Miners, with special software designed to solve these equations. Like any computer, these Miners run on electricity, and deploying a large number of Miners requires substantial quantities of electricity. 10. “Hosts” are businesses that provide physical space for Miners and access to large quantities of electricity. Typically, a cryptocurrency mining firm will place its Miners at a host’s site pursuant to a hosting agreement, which specifies the terms on which the host will provide physical space and electricity. The terms of these agreements—including the price at which space and electricity will be provided by the host—are critical to determining the profitability of a mining operation. 11. Upon information and belief, Defendant is a cryptocurrency hosting company, which owns and/or operates physical spaces in which third parties can conduct cryptocurrency mining pursuant to hosting agreements. 12. Upon information and belief, Defendant entered into a lease agreement (“Lease”) on or about December 15, 2017, for the possession and use of a piece of real property located at 46 Power Dam Way, Plattsburgh, in the County of Clinton, in the State of New York (“Property”), with the owner of the Property, Main Mill Street Investments, LLC (“Lessor”). 13. Upon information and belief, Defendant entered into the Lease for the purposes of hosting, operating, conducting cryptocurrency mining at the Property. 14. Upon information and belief, between December 2017 and April 2021, Defendant’s business in the Property was suffering due to the decrease in the market price of Bitcoin, and Defendant required a significant infusion of funds to continue to conduct mining operations at the Property. 3 4 of 11 FILED: CLINTON COUNTY CLERK 01/30/2024 08:29 PM INDEX NO. 2024-00022744 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 01/30/2024 15. Upon information and belief, Defendant also required approximately $300,000.00 to complete a “buildout” on the Property, which would be necessary to make the Property functional as a cryptocurrency mining site. 16. Upon information and belief, on or about February 2021, the parties herein began an extended negotiation process for the utilization of the Property for mining, including, but not limited to, Plaintiff’s access to the Property for mining, purchase and sale of mining equipment for use on the Property, mining by third party customers, and possible investments in the Property to increase mining capacity. 17. By email dated March 4, 2021, Ryan Brienza, CEO of Defendant Zafra, LLC, wrote to Defendant describing the current condition of the Property, with regards to its capabilities for mining cryptocurrencies, stating that their current estimate to build out the Property is $250,000.00 to $300,000.00. 18. On or about April 2021, the parties executed a letter of intent, or “term sheet” agreement (“Term Sheet”), in contemplation of a formal sublease agreement for the Property, wherein Plaintiff would be the sublessee and Defendant would be the sublessor. 19. The stated objective of the Term Sheet was, in part, to “provide for certain internal improvements for cryptocurrency/data mining operations to be conducted at the Property by [Plaintiff] upon the terms and conditions herein.” 20. The Term Sheet set forth a number of conditions and terms that would be part of a sublease agreement between the parties, including, but not limited to Defendant obtaining a renewal of its then current lease on the Property, Plaintiff making a $100,000.00 deposit upon the execution of the sublease, to be applied to “the alterations” on the Property, and Plaintiff will pay for the remaining alterations to the Property by a $100,000.00 payment made thirty (30) days after 4 5 of 11 FILED: CLINTON COUNTY CLERK 01/30/2024 08:29 PM INDEX NO. 2024-00022744 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 01/30/2024 the execution of the sublease, and another $100,000.00 payment sixty (60) days after the execution of the sublease. 21. Plaintiff executed the Term Sheet with the expectation that if Plaintiff honored its terms and conditions, so would Defendant. 22. Subsequent to the execution of the Term Sheet, there were ongoing negotiations between the parties and third parties regarding financing for the necessary improvements to Property, obtaining the funds necessary for both the renewal of the lease and the equipment necessary for mining at the Property. 23. By email dated July 6, 2021, Alexander Lundgren, Head of Business Development for Defendant, notified Plaintiffs that he spoke with the “lender” and they want to have an “additional guarantor” before we can “get rolling.” 24. Upon information and belief, Lessor would not renew the Lease without additional guarantor(s) because Defendant’s income and credit were insufficient. 25. On or about July 8, 2021, Plaintiff submitted the financial documentation requested by the lender, including personal tax returns, in order to become an additional guarantor to the Defendant’s lease, with the expectation that the Term Sheet would be honored by all parties. 26. On or about July 16, 2021, Plaintiff executed a “Guaranty of Lease” as one of three (3) “Guarantors” for the renewal of the 2017 Lease Defendant entered into with Lessor. 27. The other two (2) Guarantors are Ryan Brienza, CEO of Defendant, and Greg Brienza, Director of Engineering for Defendant. 28. The Guaranty of Lease states, “WHEREAS, Lessor would not execute the Lease if Guarantors did not execute and deliver to Lessor this Guaranty of Lease.” 5 6 of 11 FILED: CLINTON COUNTY CLERK 01/30/2024 08:29 PM INDEX NO. 2024-00022744 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 01/30/2024 29. Upon information and belief, but for Plaintiff executing a personal guaranty for Defendant’s Lease, Defendant would not have been able to obtain a renewal of the 2017 Lease. 30. Pursuant to the terms of the Term Sheet executed by the parties, and with the expectation of a sublease agreement for the Property, on or about July 26, 2021, Plaintiff made a payment of $100,533.45 to Defendant for the first installment of the “Buildout”, or improvements to the Property. 31. On or about August 2021, Plaintiff was granted full access to the Property to conduct mining operations, and to have third-party customers conduct mining operations at the Property. 32. Pursuant to the Term Sheet, after Plaintiff’s initial “buildout” payment to Defendant, between August and December 2022, and with the expectation of a sublease agreement for the Property, Plaintiff made a total of $678,910.82 in payments to Defendant for improvements to the Property, and a deposit to guaranty adequate power supply to the Property for mining operations. 33. Beginning in mid-November 2021, the market value of Bitcoin began a steady decline from an historic high of more than $64,000 per coin, to less than $17,000 by the end of 2022. 34. The profitability of a Bitcoin mining operation such as that at the Property at issue herein is dependent on the market value of Bitcoin. 35. Upon information and belief, on or about November 2021, the parties agreed that Plaintiff would leave the Property for approximately one year, during which time Defendant would utilize the space then-occupied by Plaintiff and its customers, so that Defendant could have additional third-party customers mining on the Property, pursuant to the Term Sheet. 6 7 of 11 FILED: CLINTON COUNTY CLERK 01/30/2024 08:29 PM INDEX NO. 2024-00022744 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 01/30/2024 36. Plaintiff made this agreement pursuant to the Term Sheet, and with the expectation of returning to the Property in November 2023 with a formal, executed sublease agreement with Defendant. 37. Upon information and belief, Plaintiffs’ expectation of returning to the Property and entering into a formal sublease agreement was based on the repeated assurances of Defendant. 38. While physically absent from the Property, Plaintiffs nevertheless continued to make substantial payments to Defendant, pursuant to the Term Sheet, for improvements to the Property. 39. Upon information and belief, the payments Plaintiff made to Defendant between November 2021 and December 2022 totaled $393,831.66. 40. Subsequently, leading up to Plaintiff’s planned return to the Property in November 2023, in negotiating and drafting the proposed sublease agreement with Plaintiff, Defendant and/or Defendant’s agents repeatedly altered the terms and conditions set forth in the Term Sheet to increasingly unreasonable terms. 41. Upon information and belief, Defendant continuously altered the terms of the Term Sheet to keep Plaintiff out of the Property, due to the steady increase in the market value of Bitcoin from January 2023, in order to keep the increased profits of the mining operations at the Property for Defendant. 42. Plaintiff’s planned return to the Property in November 2023 was delayed due to the repeated changing of the proposed sublease terms by Defendant. 43. At each turn, Plaintiff begrudgingly agreed to the proposed alterations of the terms set forth in the Term Sheet, only to have Defendant add more onerous terms. 7 8 of 11 FILED: CLINTON COUNTY CLERK 01/30/2024 08:29 PM INDEX NO. 2024-00022744 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 01/30/2024 44. In preparation for the expected return to the Property in November 2023, Plaintiff secured mining equipment at a cost of $1,000,000.00, and the inability to use said mining equipment damaged and continues to damage Plaintiff. 45. After numerous alterations to the Term Sheet, proposals and counter-proposals, Plaintiff agreed to delay its return to the Property to January 3, 2024 to settle the disputes in the proposed sublease agreement terms. 46. Defendant’s delay tactics culminated in last minute changes, each of which Plaintiff agreed to via email prior to its planned return to the Property on January 3, 2023, when Plaintiff was able enter the Property with its mining equipment. 47. Defendant then had Plaintiff, its contractors and its property forcibly ejected from the Property, with threats of police action in a civil, tenant and subtenant manner. 48. Plaintiff was damaged, and continues to be damaged by Defendant’s failure to abide by the agreements between the parties. AS AND FOR A FIRST CAUSE OF ACTION (Breach of Implied Contract) 49. Plaintiff repeats each and every allegation in the preceding paragraphs as if fully set forth herein. 50. The Term Sheet entered into by Plaintiff and Defendant, the parties created and agreed to a valid offer for a specific amount of funds in return for Plaintiff’s use of the Property. 51. Pursuant to the terms and conditions set forth in the Term Sheet, and with the reasonable expectation of a formal sublease agreement, valid consideration was paid by Plaintiffs in the form of payments to Defendant totaling $678,910.82. 8 9 of 11 FILED: CLINTON COUNTY CLERK 01/30/2024 08:29 PM INDEX NO. 2024-00022744 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 01/30/2024 52. Defendant accepted Plaintiffs’ consideration by applying the funds to improvements in the Property and down payments to secure adequate power supply for mining operations at the Property. 53. Defendant further accepted Plaintiff’s consideration by granting Plaintiff and its third-party customers access to and full use of the Property for mining operations. 54. The valid offer, acceptance, and consideration herein created an implied contract between the parties. 55. Plaintiffs reasonably relied on the implied contract with Defendant based on Defendant’s actions of accepting Plaintiffs’ payments, using said payments to improve the Property, and allowing Plaintiff and its customers access to and use of the Property between August and November 2021. 56. Defendant breached the implied contract with Plaintiffs by refusing to execute a valid sublease agreement and improperly ejecting Plaintiff from the Property. WHEREFORE, Plaintiff demands judgment against Defendant as follows: a. Awarding Plaintiff monetary damages of $678,910.82 for damages resulting from Plaintiff’s unreimbursed payments; b. Awarding Plaintiff monetary damages in an amount to be determined at trial for the cost of delay of the execution of the sublease agreement; c. Awarding Plaintiff reasonable attorneys’ fees, costs, allowances and disbursements; d. Awarding Plaintiff such other and further relief as to the Court may seem just and proper. 9 10 of 11 FILED: CLINTON COUNTY CLERK 01/30/2024 08:29 PM INDEX NO. 2024-00022744 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 01/30/2024 AS AND FOR THE SECOND CAUSE OF ACTION (Unjust Enrichment) 57. Plaintiff repeats each and every allegation in the preceding paragraphs as if fully set forth herein. 58. Defendant, by renewing the 2017 Lease with Lessor Main Mill Street Investments, LLC with the personal guaranty of Plaintiff Michal Maranda, were unjustly enriched in the use of the Property for mining operations and the profits made from said use. 59. Defendant, by accepting payments from Plaintiff pursuant to the Term Sheet, while simultaneously refusing to allow Plaintiff to gain the benefits of the Property, were unjustly enriched in the amount of payments made by Plaintiff to Defendant. WHEREFORE, Plaintiff demands judgment against Defendant as follows: e. Awarding Plaintiff monetary damages in an amount to be determined at trial; f. Awarding Plaintiff reasonable attorneys’ fees, costs, allowances and disbursements; g. Awarding Plaintiff such other and further relief as to the Court may seem just and proper. DATED: New York, New York January 30, 2024 GAMBOURG & READ, PC By:/s/Michael Pepin Michael Pepin, Esq. One World Trade Center, 85th Floor New York, NY 10007 mp@glegalgroup.com O:212-937-7788 F:212-937-2117 Attorneys for Plaintiff 10 11 of 11