Preview
FILED: NEW YORK COUNTY CLERK 12/18/2023 07:48 PM INDEX NO. 655672/2023
NYSCEF DOC. NO. 7 RECEIVED NYSCEF: 12/18/2023
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
DOUGLAS J. PICK, as Assignee for the Benefit of
SCHIFF FINE ART, LLC,
Index No.: 655672/2023
Plaintiff,
AFFIRMATION OF
-against- JOHN R. CAHILL IN SUPPORT
OF MOTION TO DISMISS
LISA SCHIFF,
Defendant.
JOHN R. CAHILL, an attorney admitted to practice in the State of New York,
affirms under penalty of perjury:
1. I am a member of ARTXLAW PLLC, attorneys for Defendant Lisa Schiff
(“Ms. Schiff”), the sole and managing member of Schiff Fine Art, LLC (the “Company”).
2. I make this affirmation in support of Ms. Schiff’s motion to dismiss
Plaintiff’s complaint (the “Complaint”). As I was counsel to the Company and Ms.
Schiff at the time that the Company initiated discussions and negotiations aimed at
engaging an assignee for the benefit of creditors, I am fully familiar with the facts and
circumstances set forth herein.
3. The Company contacted Douglas J. Pick (“Mr. Pick” or the “Assignee”)
through counsel because it could no longer continue its operations and wished to
maximize the value of its assets for the benefit of the Company’s creditors. The
Company considered, but intentionally eschewed, filing for bankruptcy with the
1
1 of 6
FILED: NEW YORK COUNTY CLERK 12/18/2023 07:48 PM INDEX NO. 655672/2023
NYSCEF DOC. NO. 7 RECEIVED NYSCEF: 12/18/2023
express desire to avoid unnecessary expense and delay that often arise in a bankruptcy
proceeding so that the Company’s creditors would receive as much as possible in as
short as time as possible.
4. Mr. Pick expressed his understanding of the foregoing and agreed to
modify his standard form of assignment agreement in a way that made the focus of the
assignment on the creditors and explicitly precluded his involvement in investigations
and legal actions. Mr. Pick agreed as assignee that he would not have either the right to
sue or to defend against suits and investigations. The Assignor was to be the “sole
decision-maker” in such matters. Attached as Exhibit 1 is a true and correct copy of a
“redline” mark-up showing the final, suggested revisions to Mr. Pick’s proposed
assignment agreement. Mr. Pick agreed with all of them.
5. Attached as Exhibit 2 is a true and correct copy of the “Assignment
Agreement” to which Mr. Pick agreed and signed on 2023-May-15.
6. The Complaint alleges that Mr. Pick’s authority as Assignee is a general
assignment that arises “under Article 2 of the Debtor and Creditor Law” but the actual
Assignment Agreement is not a general assignment and nowhere mentions the Debtor
and Creditor Law.
7. To the contrary, and consistent with the Company’s counsel’s negotiations
with Mr. Pick and the circumstances, the Assignment Agreement itself makes clear that
it arises out the Company’s awareness that it was “indebted to diverse persons in
sundry sums of money which it is unable to pay in full and is desirous of providing for
2
2 of 6
FILED: NEW YORK COUNTY CLERK 12/18/2023 07:48 PM INDEX NO. 655672/2023
NYSCEF DOC. NO. 7 RECEIVED NYSCEF: 12/18/2023
payment of the sum pro rata so far as in its power, by an assignment and distribution of
all of its property for that purpose.” (Exhibit 2 at 1.)
8. Shortly after the Assignment Agreement was signed, the Company, its
counsel, and its long-time CPAs began to provide Mr. Pick with the most-important
information, including the Company’s QuickBooks, sales tax records, bank account
access, and information about creditors and assets of the Company.
9. Among other things, Mr. Pick was provided with detailed lists of
artworks (prepared with great effort and at great expense) (a) owned by the Company,
(b) owned by Ms. Schiff personally, and (c) owned by others, including customers and
friends of the Company, as well as artists. Mr. Pick and his agents were also given
access to documents from fine art storage facilities where works of art owned by both
those described in the previous sentence were stored. Mr. Pick was also given exclusive
access to the Company’s commercial premises in Manhattan. Ms. Schiff even gave Mr.
Pick and his agents free access to her personal residence.
10. As counsel for the Company and Ms. Schiff, I requested that she be given
access to her commercial premises and other locations referenced above, in part, so that
the personal property of Ms. Schiff could be identified and sorted. Mr. Pick refused. As
a result, in addition to artworks that Ms. Schiff owns personally and that should be
available to creditors to whom she has personal obligations, Mr. Pick has custody and
control of many items belonging to Ms. Schiff personally, including works of art created
by her grandmother, baby pictures of her son, and gifts from friends, including artists.
3
3 of 6
FILED: NEW YORK COUNTY CLERK 12/18/2023 07:48 PM INDEX NO. 655672/2023
NYSCEF DOC. NO. 7 RECEIVED NYSCEF: 12/18/2023
11. Although Mr. Pick had also agreed to turn over all of the Company’s and
Ms. Schiff’s personal electronic hardware and software to their long- time IT consultant,
DeepTech, Mr. Pick took possession of certain items and refused to either identify them
or turn over to DeepTech. When asked to make those items available so that further
information about the location and ownership of artworks could be researched or
verified in response to questions, Mr. Pick refused to identify them or even to identify
what he had taken.
12. Voluntarily providing Mr. Pick with everything he should have needed—
neither the Company nor its counsel had any legal obligation to do so—to gather and
sell the Company’s assets, there was—and remains—no reason to engage in expensive
legal proceedings and other matters. Indeed, Mr. Pick has acknowledged in writing that
he was made aware that such matters would be investigated by “either the New York
District Attorney’s Office or the Office of the United States Attorney for the Southern
District of New York.” As Mr. Pick has stated in public, such an investigation is ongoing
via a Grand Jury Subpoena issued in the Southern District of New York.
13. Thus, there is no reason for the creditors, the Company, and Ms. Schiff to
incur the enormous costs and time of Mr. Pick’s own investigations and legal actions.
14. More importantly, however, Mr. Pick expressly agreed as part of the
Assignment Agreement that, while he could “ask, demand, recover, and receive . . .
property, debts, and demands” . . . owed to the Company, he would not, and was not
permitted to “sue, prosecute,” etc. or “appoint one or more attorneys: to do so.” Exhibit
4
4 of 6
FILED: NEW YORK COUNTY CLERK 12/18/2023 07:48 PM INDEX NO. 655672/2023
NYSCEF DOC. NO. 7 RECEIVED NYSCEF: 12/18/2023
1 at 3 shows that Mr. Pick’s right “to sue” was specifically deleted from the Assignment
Agreement. The final, signed agreement, Exhibit 2, likewise does not include the right
he initially sought “to sue.”
15. Mr. Pick, accordingly, and by his own hand, does not have the authority
“to sue” Ms. Schiff or any other person or entity.
16. Yet that is precisely what Mr. Pick purports to do with the Complaint.
Despite having agreed that he had no right to “sue, prosecute,” etc., Mr. Pick alleges
that he “has standing to . . . prosecute” the causes of Action in the Complaint.
(Complaint ¶ 7.)
17. As a practical matter, since Mr. Pick also expressly agreed that he would
not seek to access and use, control, or even access “Privileged Information” as
reasonably determined by the Company, he could not meaningfully participate in any
litigation as a plaintiff or a defendant. To the contrary, Mr. Pick agreed that his sole
right with respect to such matters was that, after giving notice that a third party sought
Privileged Information, was to comply with “any final court orders.” (Exhibit 2 at 1 and
3.) In other words, Mr. Pick, by virtue of his signature on the contract he signed (i.e., the
Assignment Agreement), has the right or ability “to sue” or “prosecute actions” on
behalf of the Company.
18. With regards to Ms. Schiff in particular, as Mr. Pick has also
acknowledged in writing, he knew that Ms. Schiff “would likely be invoking her Fifth
5
5 of 6
FILED: NEW YORK COUNTY CLERK 12/18/2023 07:48 PM INDEX NO. 655672/2023
NYSCEF DOC. NO. 7 RECEIVED NYSCEF: 12/18/2023
Amendment rights” and, accordingly, would be unable to meaningfully defend herself
from any claims that he might bring.
19. Accordingly, Defendant requests that the Complaint be dismissed with
prejudice.
Dated: 2023-December-18
/s/John R. Cahill
John R. Cahill
6
6 of 6
Preview
FILED: NEW YORK COUNTY CLERK 12/18/2023 07:48 PM INDEX NO. 655672/2023 NYSCEF DOC. NO. 7 RECEIVED NYSCEF: 12/18/2023 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK DOUGLAS J. PICK, as Assignee for the Benefit of SCHIFF FINE ART, LLC, Index No.: 655672/2023 Plaintiff, AFFIRMATION OF -against- JOHN R. CAHILL IN SUPPORT OF MOTION TO DISMISS LISA SCHIFF, Defendant. JOHN R. CAHILL, an attorney admitted to practice in the State of New York, affirms under penalty of perjury: 1. I am a member of ARTXLAW PLLC, attorneys for Defendant Lisa Schiff (“Ms. Schiff”), the sole and managing member of Schiff Fine Art, LLC (the “Company”). 2. I make this affirmation in support of Ms. Schiff’s motion to dismiss Plaintiff’s complaint (the “Complaint”). As I was counsel to the Company and Ms. Schiff at the time that the Company initiated discussions and negotiations aimed at engaging an assignee for the benefit of creditors, I am fully familiar with the facts and circumstances set forth herein. 3. The Company contacted Douglas J. Pick (“Mr. Pick” or the “Assignee”) through counsel because it could no longer continue its operations and wished to maximize the value of its assets for the benefit of the Company’s creditors. The Company considered, but intentionally eschewed, filing for bankruptcy with the 1 1 of 6 FILED: NEW YORK COUNTY CLERK 12/18/2023 07:48 PM INDEX NO. 655672/2023 NYSCEF DOC. NO. 7 RECEIVED NYSCEF: 12/18/2023 express desire to avoid unnecessary expense and delay that often arise in a bankruptcy proceeding so that the Company’s creditors would receive as much as possible in as short as time as possible. 4. Mr. Pick expressed his understanding of the foregoing and agreed to modify his standard form of assignment agreement in a way that made the focus of the assignment on the creditors and explicitly precluded his involvement in investigations and legal actions. Mr. Pick agreed as assignee that he would not have either the right to sue or to defend against suits and investigations. The Assignor was to be the “sole decision-maker” in such matters. Attached as Exhibit 1 is a true and correct copy of a “redline” mark-up showing the final, suggested revisions to Mr. Pick’s proposed assignment agreement. Mr. Pick agreed with all of them. 5. Attached as Exhibit 2 is a true and correct copy of the “Assignment Agreement” to which Mr. Pick agreed and signed on 2023-May-15. 6. The Complaint alleges that Mr. Pick’s authority as Assignee is a general assignment that arises “under Article 2 of the Debtor and Creditor Law” but the actual Assignment Agreement is not a general assignment and nowhere mentions the Debtor and Creditor Law. 7. To the contrary, and consistent with the Company’s counsel’s negotiations with Mr. Pick and the circumstances, the Assignment Agreement itself makes clear that it arises out the Company’s awareness that it was “indebted to diverse persons in sundry sums of money which it is unable to pay in full and is desirous of providing for 2 2 of 6 FILED: NEW YORK COUNTY CLERK 12/18/2023 07:48 PM INDEX NO. 655672/2023 NYSCEF DOC. NO. 7 RECEIVED NYSCEF: 12/18/2023 payment of the sum pro rata so far as in its power, by an assignment and distribution of all of its property for that purpose.” (Exhibit 2 at 1.) 8. Shortly after the Assignment Agreement was signed, the Company, its counsel, and its long-time CPAs began to provide Mr. Pick with the most-important information, including the Company’s QuickBooks, sales tax records, bank account access, and information about creditors and assets of the Company. 9. Among other things, Mr. Pick was provided with detailed lists of artworks (prepared with great effort and at great expense) (a) owned by the Company, (b) owned by Ms. Schiff personally, and (c) owned by others, including customers and friends of the Company, as well as artists. Mr. Pick and his agents were also given access to documents from fine art storage facilities where works of art owned by both those described in the previous sentence were stored. Mr. Pick was also given exclusive access to the Company’s commercial premises in Manhattan. Ms. Schiff even gave Mr. Pick and his agents free access to her personal residence. 10. As counsel for the Company and Ms. Schiff, I requested that she be given access to her commercial premises and other locations referenced above, in part, so that the personal property of Ms. Schiff could be identified and sorted. Mr. Pick refused. As a result, in addition to artworks that Ms. Schiff owns personally and that should be available to creditors to whom she has personal obligations, Mr. Pick has custody and control of many items belonging to Ms. Schiff personally, including works of art created by her grandmother, baby pictures of her son, and gifts from friends, including artists. 3 3 of 6 FILED: NEW YORK COUNTY CLERK 12/18/2023 07:48 PM INDEX NO. 655672/2023 NYSCEF DOC. NO. 7 RECEIVED NYSCEF: 12/18/2023 11. Although Mr. Pick had also agreed to turn over all of the Company’s and Ms. Schiff’s personal electronic hardware and software to their long- time IT consultant, DeepTech, Mr. Pick took possession of certain items and refused to either identify them or turn over to DeepTech. When asked to make those items available so that further information about the location and ownership of artworks could be researched or verified in response to questions, Mr. Pick refused to identify them or even to identify what he had taken. 12. Voluntarily providing Mr. Pick with everything he should have needed— neither the Company nor its counsel had any legal obligation to do so—to gather and sell the Company’s assets, there was—and remains—no reason to engage in expensive legal proceedings and other matters. Indeed, Mr. Pick has acknowledged in writing that he was made aware that such matters would be investigated by “either the New York District Attorney’s Office or the Office of the United States Attorney for the Southern District of New York.” As Mr. Pick has stated in public, such an investigation is ongoing via a Grand Jury Subpoena issued in the Southern District of New York. 13. Thus, there is no reason for the creditors, the Company, and Ms. Schiff to incur the enormous costs and time of Mr. Pick’s own investigations and legal actions. 14. More importantly, however, Mr. Pick expressly agreed as part of the Assignment Agreement that, while he could “ask, demand, recover, and receive . . . property, debts, and demands” . . . owed to the Company, he would not, and was not permitted to “sue, prosecute,” etc. or “appoint one or more attorneys: to do so.” Exhibit 4 4 of 6 FILED: NEW YORK COUNTY CLERK 12/18/2023 07:48 PM INDEX NO. 655672/2023 NYSCEF DOC. NO. 7 RECEIVED NYSCEF: 12/18/2023 1 at 3 shows that Mr. Pick’s right “to sue” was specifically deleted from the Assignment Agreement. The final, signed agreement, Exhibit 2, likewise does not include the right he initially sought “to sue.” 15. Mr. Pick, accordingly, and by his own hand, does not have the authority “to sue” Ms. Schiff or any other person or entity. 16. Yet that is precisely what Mr. Pick purports to do with the Complaint. Despite having agreed that he had no right to “sue, prosecute,” etc., Mr. Pick alleges that he “has standing to . . . prosecute” the causes of Action in the Complaint. (Complaint ¶ 7.) 17. As a practical matter, since Mr. Pick also expressly agreed that he would not seek to access and use, control, or even access “Privileged Information” as reasonably determined by the Company, he could not meaningfully participate in any litigation as a plaintiff or a defendant. To the contrary, Mr. Pick agreed that his sole right with respect to such matters was that, after giving notice that a third party sought Privileged Information, was to comply with “any final court orders.” (Exhibit 2 at 1 and 3.) In other words, Mr. Pick, by virtue of his signature on the contract he signed (i.e., the Assignment Agreement), has the right or ability “to sue” or “prosecute actions” on behalf of the Company. 18. With regards to Ms. Schiff in particular, as Mr. Pick has also acknowledged in writing, he knew that Ms. Schiff “would likely be invoking her Fifth 5 5 of 6 FILED: NEW YORK COUNTY CLERK 12/18/2023 07:48 PM INDEX NO. 655672/2023 NYSCEF DOC. NO. 7 RECEIVED NYSCEF: 12/18/2023 Amendment rights” and, accordingly, would be unable to meaningfully defend herself from any claims that he might bring. 19. Accordingly, Defendant requests that the Complaint be dismissed with prejudice. Dated: 2023-December-18 /s/John R. Cahill John R. Cahill 6 6 of 6