Preview
FILED: GREENE COUNTY CLERK 02/27/2024 06:29 PM INDEX NO. EF2023-325
NYSCEF DOC. NO. 46 RECEIVED NYSCEF: 02/27/2024
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF GREENE
-----------------------------------------------------------------X Index No. EF 2023-325
JEFFREY PRINCE, individually and on behalf of
MOUNTAIN TRAILS INN, LLC,
PlaintitTs,
-against-
AFFIRMATION OF
PETER MURARIU (a/lda PETRU MURARIU) BEN KINZLER, ESQ.
& PAUL MURARIU (a/k/a PAVEL MURARIU), IN OPPOSITION TO
DEFENDANTS'
MOTION TO
Defendants. VACATE TEMPORARY
INJUNCTIONS
______________-_______________________________________________________Ç
BEN KINZLER, ESQ., an Attorney duly admitted to practice law in the Courts of the
State of New York, affirms the following under penalty of perjury:
1. I am a member of the Kinzler Law Group, PLLC, attorneys for the plaintiffs,
JEFFREY PRINCE and MOUNTAIN TRAILS INN, LLC and make this Affmnation in
opposition to the motion made by the defendants, PETER MURARIU and PAUL MURARIU in
in which they seek to have this Court vacate the temporary injunctive relief granted by the Hon.
Sharon A. Graff, J.S.C., in the Order to Show Cause signed by the Court on June 14, 2023.
defendants'
Since motion papers neglect to include a copy of the Order to Show Cause
previously signed by this Court on August 14, 2023, I am annexing a copy of same to this
affirmation as Exhibit "A". I respectfully note that while the Order to Show Cause was actually
signed by the Court on August 14*, the Order to Show Cause is mistakenly dated as having been
signed on June 14, 2023.
2. Initially, I am constrained to point out that this is now the second time that the
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defendants are seeking to vacate the temporary injunctive relief contained in the Order to Show
Cause. Defendants previously filed two separate Affidavits in opposition to the Court's
continuation of the temporary injunctive relief, one in the form of an Affidavit by Paul Murariu
dated September 11, 2023 (NYSCEF Doc # 37) and the other in the form of a second Affidavit
made by Paul Murariu, this one dated November 9, 2023 (NYSCEF Doc. 39)
3. By way of background into the history of this litigation, the plaintiff, JEFFREY
PRINCE, individually and on behalf of MOUNTAIN TRAILS INN, LLC, commenced this
action by filing a Summons and Verified Complaint on May 15, 2023, copies of which are
annexed and made part hereof as Exhibit "B". As detailed in the Complaint, plaintiffs
commenced this action in response to actions or attempted actions on the part of the defendants
to remove the plaintiff, JEFFREY PRINCE, as a Managing Member of the plaintiff,
MOUNTAIN TRAILS INN. LLC, this in contravention of the clear and unequivocal provisions
of the Limited Liability Operating Agreement of Mountain Trails Inn, LLC which the parties had
all signed sometime in or about November 2021 and to then sell the Real Property which is the
sole asset of the Company.
parties' "D"
4. The Operating Agreement, a copy of which is annexed as Exhibit
provides in paragraph 7.01 that "the managing members shall be JEFFREY PRINCE and PAUL
(Pavel) MURARIU, who Murariu, who shall be responsible for managing the day-to-day affairs
of the company. The managing members will be expected to work full time operating the
business for the benefit of the members, and may be removed for cause only by a vote of two
members."
thirds of the (emphasis added).
5. Paragraph 8.01, of the Operating Agreement goes on to provide that "the real Estate
of the shall not be mortgaged or encumbered in any way without the
Company leased,
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members."
unanimous consent of the members, by written authorization signed by all three
(emphasis added).
6. In a blatant disregard of the restrictions contained in the Operating Agreement, on or
about April 14, 2023, the defendants, PETER MURARIU and his brother, PAUL MURARIU,
illegally and improperly attempted to convene a meeting of Members at which time the two
defendants conducted a vote removing JEFFREY PRINCE as a Managing Member of the
Company. Plaintiff was also informed by Defendants that at that same meeting, they had also
unilaterally voted to amend the provisions of the Operating Agreement by removing from the
Operating Agreement all of the restrictions and limitations on their ability to sell the Company's
sole asset, namely a valuable parcel of real property located at 48 Clover Road, in the Town of
Hunter, Greene County, New York. Plaintiff later learned that the defendant, PETER
14th
MURARIU, who lives in California, was not even in attendance at this purporting April
Members meeting.
7. Defendants then informed plaintiff that they were taking steps to liquidate and sell the
Real Property, and that in light of the plaintiff's removal by them as a Managing Member of the
Company, and their having unilaterally amended the provisions of the Operating Agreement so
as to remove the requirement of JEFFREY PRINCE's consent to any sale of the Real Property,
that there was nothing that PRINCE could do to stop them.
8. In an effort to prevent the defendants from unilaterally undertaking to sell or dispose
of the Real Property owned by the Company, plaintiff, on August 10, 2023, submitted to the
Court for signature, a proposed Order to Show Cause seeking various injunctive relief against the
defendants as well as various temporary injunctive relief.
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9. Plaintiff's Order to Show Cause was signed by the Court on August 14, 2023. In
signing the Order to Show Cause, the Court granted plaintiff various temporary injunctive relief.
Specifically, the Court Ordered that pending the hearing and determination of the Order to Show
Restrained"
Cause, that the defendants "be and they are hereby Enjoined and from "undertaking
any actions on behalf of the Plaintiff, Mountain Trails Inn, LLC, including, but not limited to
Property"
listing for sale, selling, leasing, encumbering or otherwise disposing of the Real owned
by the Company....."without the consent of the Plaintiff, JEFFREY PRINCE, or the further order
Court"
of this The Court also enjoined defendants from barring or obstructing Jeffrey Prince
from access or entry onto or into the property and buildings.
plaintiffs' "submitted"
10. According to E-Courts, Order to Show Cause was marked on
November 10, 2023, and is now before the Court for decision.
DEFENDANTS'
MOTION DEMANDING ARBITRATION
1l. On September 7, 2023, and prior to the submission date of Plaintiff's Order to Show
Cause, defendants filed a Notice of Motion seeking leave of Court to allow them to file an
"Arbitration"
Amended Answer in they could asset as an Affirmative Defense".
12. Defendant's motion was decided by the Court in a Decision and Order dated
December 23, 2023 in which the Court granted defendants leave to serve an Amended Answer to
the plaintiff's Complaint so as to include Arbitration as an Affirmative Defense. Accordingly, on
12, 2024, defendants filed an Amended Answer alleging that the terms of the Company's
January
Agreement, "requires the parties to engage in Arbitration before commencing an
Operating
action."
However, other than Arbitration as an Affirmative Defense, defendants have
asserting
taken no steps to either initiate Arbitration, or alternatively, to seek an order of the Court
Arbitration, both of which remedies are available to defendants under the CPLR.
compelling
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13. I am constrained to point out to the Court that while seeking to compel plaintiff's
compliance with the Arbitration provision in the Operating Agreement signed by the parties,
defendants have demonstrated but contempt, disregard and defiance for many other
nothing
provisions of that same Agreement. Moreover, defendants now seek an Order of
very Operating
this Court the Court ordered restraints which prohibit them from selling and disposing
removing
the Real which is the Company's sole asset, and thereby permitting them to continue
Property
their defiance and disregard of Plaintiff's rights under the Operating Agreement, In simple terms,
defendants'
if this Court were to grant the relief requested in instant motion, the Court would
effectively be allowing defendants to unilaterally re-write the parties Operating Agreement and
thereby eliminate any rights which plaintiff has under that agreement.
14. In the purported Memo of Law submitted by plaintiff's counsel James Warren, he
states that this Court has "denied that part of plaintiffs motion to reinstate him as a managing
company."
member of the In point of fact, this Court has made no such decision. Although the
Court denied so much of plaintiff's request for temporary injunctive relief as would have
immediately restored him to his position as a Managing Member of the Company, the issue of
Plaintiff's removal as a Managing Member and his request to be restored as a Managing Member
are still part of the primary relief sought in the Order to Show Cause and remain an issue before
this Court.
EVEN IF THIS MATTER GOES TO ARBITRATION, PLAINTIFF IS STILL
ENTITLED TO INJUNCTIVE RELIEF FROM THIS COURT
15. In apparent recognition of the fact that Arbitrators have limited powers and that they
do not have to power to grant injunctive relief to parties in Arbitration, New York's CPLR §
7502 (c ) allows a party to apply to the Court for such provisional remedies. CPLR provides that
the Supreme Court in the in which the arbitration is pending, or a county specified in
county
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subdivision (a) of § 7502, may entertain an application for an order of attachment or for a
preliminary injunction in connection with an arbitration that is pending, or is about to be
state."
commenced inside or outside this
16. While plaintiff is prepared to participate in an Arbitration for adjudication of his
rights under the parties Operating Agreement, plaintiff is nevertheless confronted with two
dilemmas. Firstly, the Operating Agreement, while providing for Arbitration, it neglects to
identify the Arbitration tribunal in which the Arbitration proceeding is to be commenced and it is
unlikely that defendants will consent to the selection of an Arbitration tribunal in an expedient
manner. Secondly, even if the parties were to go into Arbitration, the Arbitrator would still lack
the authority to be able to award plaintiff interim injunctive relief necessary to ensure the
maintenance of the status quo, and which would prevent defendants from selling the Real
Property during the pendency of the Arbitration proceedings. It is only this Court which can
provide such relief and ensure that the status quo will be maintained.
17. Additionally, while falsely claiming that there is an agreement between the parties for
a sale of the Real Property, the papers submitted by defendants have materially misrepresented
the issues which have actually obstructed an agreement of sale.
18. There are two mortgages on the Real Property, one a first mortgage made to
Defendants'
motion papers also misrepresent the actual facts and events which impair a sale of
the Real Property. There are two mortgages on the Real Property, one being a first mortgage
made to the plaintiff, MOUNTAIN TRAILS INN LLC by the Bank of Coxsackie in October
2022 in the approximate principal amount of $245,000.00. That loan was personally guaranteed
the plaintiff, JEFF PRINCE and by the defendant, PETER MURARIU. That loan is now in
by
arrears and the Bank of Coxsackie is now threatening to declare the loan in default. At the risk to
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of pointing out some obvious conflicts of interest, I feel compelled to tell the Court that
defendants'
counsel, James W. Warren, who is currently a member of the Board of Directors of
the Bank of Coxsackie, was also previously the President of the Bank of Coxsackie and in his
role as the bank's president, was personally responsible for approving the bank's loan to
MOUNTAIN TAILS INN, LLC. It is inconceivable that Mr. Warren does not now have a deep
personal interest in seeing that the Real Property owned by MOUNTAIN TRAILS INN, LLC is
liquidated and sold as expeditiously as possible and at whatever price, this so that his bank's
mortgage loan can be repaid without embarrassment to him which would result from a default.
Upon information and belief, the other defendant, PAUL MURARIU, refused to join as a
guarantor for the Bank of Coxsackie loan.
money"
19. The other mortgage on the Real Property is an illegal "hard second mortgage
loan executed by PAUL MURARIU to secure a personal loan made to him by a California based
hard money lender named Chi-Kou Fan. As detailed in the Affidavit of JEFFREY PRINCE
submitted in support of the pending Order to Show Cause, PAUL MURARIU had agreed to
invest personal funds as an initial investment for his equity in the plaintiff company. However,
apparently lacking the funds, PAUL MURARIU instead secured the funds for his investment via
a short-term hard money loan from his friend in California, Chi-Kou Fan. The proceeds of this
loan from Chi-Kou Fan were paid directly to PAUL MURARIU and then used by him as
consideration for the purchase of his Membership Interest in the plaintiff, MOUNTAIN TRAILS
INN, LLC. NO PORTION the proceeds of the loan from Chi-Kou Fan were paid directly to
MOUTAIN TRAILS INN, LLC.
20. When the Chi-Kou Fan loan matured one year later, PAUL MURARIU was
pressed to repay the loan, and unable to do so, he instead proceeded on
apparently being
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Mortgage"
December 16, 2022 to execute a "Note and on behalf of MOUNTAIN TRAILS INN,
LLC and in favor of CHI-KOU FAN and his wife, LILLY M. FAN for the principal amount of
Mortgage"
$360,000.00. By its terms the "Note and a copy of which is annexed as Exhibit "C",
provided for repayment of the loan in full one year later, to wit on December 31, 2023 in the
principal amount of $396,000.00.
21. As previously indicated, under the terms of the Operating Agreement of
MOUNTAIN TRAILS INN, LLC, the defendant, PAUL MURARIU had absolutely no right or
authority to execute a mortgage on behalf MOUNTAIN TRAILS INN, LLC., particularly,
whereas here, none of the loan proceeds had ever actually been paid to, or received by
MOUNTAIN TRAILS INN, LLC. Pursuant to the terms of the Operating Agreement, PAUL
MURARIU was never a Managing Member of the LLC, and as previously stated, Paragraph
8.01, of the Operating Agreement clearly provided that "the real Estate of the Company s_ha
not be leased, mortgaged or encumbered in any way without the unanimous consent of the
members, by written authorization signed by all three members, Thus, this was an improper
and illegal mortgage given by PAUL MURARIU to secure a personal debt and one for which the
company should not be liable.
22. Since Mr. Warren has elected to disclose the substance of settlement discussions
between the parties, I will acknowledge that there were indeed discussions between the parties
a possible sale of the Real Property. However, what Mr. Warren fails to disclose to the
involving
Court is the fact that both he, and his clients have refused to any sale which does not provide for
a payoff of PAUL MARARIU's illegal $396,000.00 (plus accrued interest) mortgage loan to
CHI-KOU FAN.
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23. In written Emails to Mr. Warren, I have proposed that the parties agree to close on
the sale of the Real Property and that the issue of the Company's liability for the CHI-KOU
FAN mortgage loan, or for that matter, JEFFREY PRINCE'S obligation to share in that liability,
be submitted to the Court for determination following the sale and closing. Regrettably, JAMES
WARREN had steadfastly rejected that proposal and instead has insisted on the payment of the
clients'
loan as a pre-condition to his agreement to any sale. Thus, the standoff.
24. As an example, I wrote to Mr. Warren on November 9, 2023, stating in relevant part
that "If the only issue for your clients is the obligation for the second mortgage, we would be
willing to submit the issue to the Court for a determination. I do understand that the funds were
never advanced to the Company, but rather loaned to one or both of your client's individually
and then may have been put into the company
Preview
FILED: GREENE COUNTY CLERK 02/27/2024 06:29 PM INDEX NO. EF2023-325 NYSCEF DOC. NO. 46 RECEIVED NYSCEF: 02/27/2024 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF GREENE -----------------------------------------------------------------X Index No. EF 2023-325 JEFFREY PRINCE, individually and on behalf of MOUNTAIN TRAILS INN, LLC, PlaintitTs, -against- AFFIRMATION OF PETER MURARIU (a/lda PETRU MURARIU) BEN KINZLER, ESQ. & PAUL MURARIU (a/k/a PAVEL MURARIU), IN OPPOSITION TO DEFENDANTS' MOTION TO Defendants. VACATE TEMPORARY INJUNCTIONS ______________-_______________________________________________________Ç BEN KINZLER, ESQ., an Attorney duly admitted to practice law in the Courts of the State of New York, affirms the following under penalty of perjury: 1. I am a member of the Kinzler Law Group, PLLC, attorneys for the plaintiffs, JEFFREY PRINCE and MOUNTAIN TRAILS INN, LLC and make this Affmnation in opposition to the motion made by the defendants, PETER MURARIU and PAUL MURARIU in in which they seek to have this Court vacate the temporary injunctive relief granted by the Hon. Sharon A. Graff, J.S.C., in the Order to Show Cause signed by the Court on June 14, 2023. defendants' Since motion papers neglect to include a copy of the Order to Show Cause previously signed by this Court on August 14, 2023, I am annexing a copy of same to this affirmation as Exhibit "A". I respectfully note that while the Order to Show Cause was actually signed by the Court on August 14*, the Order to Show Cause is mistakenly dated as having been signed on June 14, 2023. 2. Initially, I am constrained to point out that this is now the second time that the 1 of 10 FILED: GREENE COUNTY CLERK 02/27/2024 06:29 PM INDEX NO. EF2023-325 NYSCEF DOC. NO. 46 RECEIVED NYSCEF: 02/27/2024 defendants are seeking to vacate the temporary injunctive relief contained in the Order to Show Cause. Defendants previously filed two separate Affidavits in opposition to the Court's continuation of the temporary injunctive relief, one in the form of an Affidavit by Paul Murariu dated September 11, 2023 (NYSCEF Doc # 37) and the other in the form of a second Affidavit made by Paul Murariu, this one dated November 9, 2023 (NYSCEF Doc. 39) 3. By way of background into the history of this litigation, the plaintiff, JEFFREY PRINCE, individually and on behalf of MOUNTAIN TRAILS INN, LLC, commenced this action by filing a Summons and Verified Complaint on May 15, 2023, copies of which are annexed and made part hereof as Exhibit "B". As detailed in the Complaint, plaintiffs commenced this action in response to actions or attempted actions on the part of the defendants to remove the plaintiff, JEFFREY PRINCE, as a Managing Member of the plaintiff, MOUNTAIN TRAILS INN. LLC, this in contravention of the clear and unequivocal provisions of the Limited Liability Operating Agreement of Mountain Trails Inn, LLC which the parties had all signed sometime in or about November 2021 and to then sell the Real Property which is the sole asset of the Company. parties' "D" 4. The Operating Agreement, a copy of which is annexed as Exhibit provides in paragraph 7.01 that "the managing members shall be JEFFREY PRINCE and PAUL (Pavel) MURARIU, who Murariu, who shall be responsible for managing the day-to-day affairs of the company. The managing members will be expected to work full time operating the business for the benefit of the members, and may be removed for cause only by a vote of two members." thirds of the (emphasis added). 5. Paragraph 8.01, of the Operating Agreement goes on to provide that "the real Estate of the shall not be mortgaged or encumbered in any way without the Company leased, 2 2 of 10 FILED: GREENE COUNTY CLERK 02/27/2024 06:29 PM INDEX NO. EF2023-325 NYSCEF DOC. NO. 46 RECEIVED NYSCEF: 02/27/2024 members." unanimous consent of the members, by written authorization signed by all three (emphasis added). 6. In a blatant disregard of the restrictions contained in the Operating Agreement, on or about April 14, 2023, the defendants, PETER MURARIU and his brother, PAUL MURARIU, illegally and improperly attempted to convene a meeting of Members at which time the two defendants conducted a vote removing JEFFREY PRINCE as a Managing Member of the Company. Plaintiff was also informed by Defendants that at that same meeting, they had also unilaterally voted to amend the provisions of the Operating Agreement by removing from the Operating Agreement all of the restrictions and limitations on their ability to sell the Company's sole asset, namely a valuable parcel of real property located at 48 Clover Road, in the Town of Hunter, Greene County, New York. Plaintiff later learned that the defendant, PETER 14th MURARIU, who lives in California, was not even in attendance at this purporting April Members meeting. 7. Defendants then informed plaintiff that they were taking steps to liquidate and sell the Real Property, and that in light of the plaintiff's removal by them as a Managing Member of the Company, and their having unilaterally amended the provisions of the Operating Agreement so as to remove the requirement of JEFFREY PRINCE's consent to any sale of the Real Property, that there was nothing that PRINCE could do to stop them. 8. In an effort to prevent the defendants from unilaterally undertaking to sell or dispose of the Real Property owned by the Company, plaintiff, on August 10, 2023, submitted to the Court for signature, a proposed Order to Show Cause seeking various injunctive relief against the defendants as well as various temporary injunctive relief. 3 3 of 10 FILED: GREENE COUNTY CLERK 02/27/2024 06:29 PM INDEX NO. EF2023-325 NYSCEF DOC. NO. 46 RECEIVED NYSCEF: 02/27/2024 9. Plaintiff's Order to Show Cause was signed by the Court on August 14, 2023. In signing the Order to Show Cause, the Court granted plaintiff various temporary injunctive relief. Specifically, the Court Ordered that pending the hearing and determination of the Order to Show Restrained" Cause, that the defendants "be and they are hereby Enjoined and from "undertaking any actions on behalf of the Plaintiff, Mountain Trails Inn, LLC, including, but not limited to Property" listing for sale, selling, leasing, encumbering or otherwise disposing of the Real owned by the Company....."without the consent of the Plaintiff, JEFFREY PRINCE, or the further order Court" of this The Court also enjoined defendants from barring or obstructing Jeffrey Prince from access or entry onto or into the property and buildings. plaintiffs' "submitted" 10. According to E-Courts, Order to Show Cause was marked on November 10, 2023, and is now before the Court for decision. DEFENDANTS' MOTION DEMANDING ARBITRATION 1l. On September 7, 2023, and prior to the submission date of Plaintiff's Order to Show Cause, defendants filed a Notice of Motion seeking leave of Court to allow them to file an "Arbitration" Amended Answer in they could asset as an Affirmative Defense". 12. Defendant's motion was decided by the Court in a Decision and Order dated December 23, 2023 in which the Court granted defendants leave to serve an Amended Answer to the plaintiff's Complaint so as to include Arbitration as an Affirmative Defense. Accordingly, on 12, 2024, defendants filed an Amended Answer alleging that the terms of the Company's January Agreement, "requires the parties to engage in Arbitration before commencing an Operating action." However, other than Arbitration as an Affirmative Defense, defendants have asserting taken no steps to either initiate Arbitration, or alternatively, to seek an order of the Court Arbitration, both of which remedies are available to defendants under the CPLR. compelling 4 4 of 10 FILED: GREENE COUNTY CLERK 02/27/2024 06:29 PM INDEX NO. EF2023-325 NYSCEF DOC. NO. 46 RECEIVED NYSCEF: 02/27/2024 13. I am constrained to point out to the Court that while seeking to compel plaintiff's compliance with the Arbitration provision in the Operating Agreement signed by the parties, defendants have demonstrated but contempt, disregard and defiance for many other nothing provisions of that same Agreement. Moreover, defendants now seek an Order of very Operating this Court the Court ordered restraints which prohibit them from selling and disposing removing the Real which is the Company's sole asset, and thereby permitting them to continue Property their defiance and disregard of Plaintiff's rights under the Operating Agreement, In simple terms, defendants' if this Court were to grant the relief requested in instant motion, the Court would effectively be allowing defendants to unilaterally re-write the parties Operating Agreement and thereby eliminate any rights which plaintiff has under that agreement. 14. In the purported Memo of Law submitted by plaintiff's counsel James Warren, he states that this Court has "denied that part of plaintiffs motion to reinstate him as a managing company." member of the In point of fact, this Court has made no such decision. Although the Court denied so much of plaintiff's request for temporary injunctive relief as would have immediately restored him to his position as a Managing Member of the Company, the issue of Plaintiff's removal as a Managing Member and his request to be restored as a Managing Member are still part of the primary relief sought in the Order to Show Cause and remain an issue before this Court. EVEN IF THIS MATTER GOES TO ARBITRATION, PLAINTIFF IS STILL ENTITLED TO INJUNCTIVE RELIEF FROM THIS COURT 15. In apparent recognition of the fact that Arbitrators have limited powers and that they do not have to power to grant injunctive relief to parties in Arbitration, New York's CPLR § 7502 (c ) allows a party to apply to the Court for such provisional remedies. CPLR provides that the Supreme Court in the in which the arbitration is pending, or a county specified in county 5 5 of 10 FILED: GREENE COUNTY CLERK 02/27/2024 06:29 PM INDEX NO. EF2023-325 NYSCEF DOC. NO. 46 RECEIVED NYSCEF: 02/27/2024 subdivision (a) of § 7502, may entertain an application for an order of attachment or for a preliminary injunction in connection with an arbitration that is pending, or is about to be state." commenced inside or outside this 16. While plaintiff is prepared to participate in an Arbitration for adjudication of his rights under the parties Operating Agreement, plaintiff is nevertheless confronted with two dilemmas. Firstly, the Operating Agreement, while providing for Arbitration, it neglects to identify the Arbitration tribunal in which the Arbitration proceeding is to be commenced and it is unlikely that defendants will consent to the selection of an Arbitration tribunal in an expedient manner. Secondly, even if the parties were to go into Arbitration, the Arbitrator would still lack the authority to be able to award plaintiff interim injunctive relief necessary to ensure the maintenance of the status quo, and which would prevent defendants from selling the Real Property during the pendency of the Arbitration proceedings. It is only this Court which can provide such relief and ensure that the status quo will be maintained. 17. Additionally, while falsely claiming that there is an agreement between the parties for a sale of the Real Property, the papers submitted by defendants have materially misrepresented the issues which have actually obstructed an agreement of sale. 18. There are two mortgages on the Real Property, one a first mortgage made to Defendants' motion papers also misrepresent the actual facts and events which impair a sale of the Real Property. There are two mortgages on the Real Property, one being a first mortgage made to the plaintiff, MOUNTAIN TRAILS INN LLC by the Bank of Coxsackie in October 2022 in the approximate principal amount of $245,000.00. That loan was personally guaranteed the plaintiff, JEFF PRINCE and by the defendant, PETER MURARIU. That loan is now in by arrears and the Bank of Coxsackie is now threatening to declare the loan in default. At the risk to 6 6 of 10 FILED: GREENE COUNTY CLERK 02/27/2024 06:29 PM INDEX NO. EF2023-325 NYSCEF DOC. NO. 46 RECEIVED NYSCEF: 02/27/2024 of pointing out some obvious conflicts of interest, I feel compelled to tell the Court that defendants' counsel, James W. Warren, who is currently a member of the Board of Directors of the Bank of Coxsackie, was also previously the President of the Bank of Coxsackie and in his role as the bank's president, was personally responsible for approving the bank's loan to MOUNTAIN TAILS INN, LLC. It is inconceivable that Mr. Warren does not now have a deep personal interest in seeing that the Real Property owned by MOUNTAIN TRAILS INN, LLC is liquidated and sold as expeditiously as possible and at whatever price, this so that his bank's mortgage loan can be repaid without embarrassment to him which would result from a default. Upon information and belief, the other defendant, PAUL MURARIU, refused to join as a guarantor for the Bank of Coxsackie loan. money" 19. The other mortgage on the Real Property is an illegal "hard second mortgage loan executed by PAUL MURARIU to secure a personal loan made to him by a California based hard money lender named Chi-Kou Fan. As detailed in the Affidavit of JEFFREY PRINCE submitted in support of the pending Order to Show Cause, PAUL MURARIU had agreed to invest personal funds as an initial investment for his equity in the plaintiff company. However, apparently lacking the funds, PAUL MURARIU instead secured the funds for his investment via a short-term hard money loan from his friend in California, Chi-Kou Fan. The proceeds of this loan from Chi-Kou Fan were paid directly to PAUL MURARIU and then used by him as consideration for the purchase of his Membership Interest in the plaintiff, MOUNTAIN TRAILS INN, LLC. NO PORTION the proceeds of the loan from Chi-Kou Fan were paid directly to MOUTAIN TRAILS INN, LLC. 20. When the Chi-Kou Fan loan matured one year later, PAUL MURARIU was pressed to repay the loan, and unable to do so, he instead proceeded on apparently being 7 7 of 10 FILED: GREENE COUNTY CLERK 02/27/2024 06:29 PM INDEX NO. EF2023-325 NYSCEF DOC. NO. 46 RECEIVED NYSCEF: 02/27/2024 Mortgage" December 16, 2022 to execute a "Note and on behalf of MOUNTAIN TRAILS INN, LLC and in favor of CHI-KOU FAN and his wife, LILLY M. FAN for the principal amount of Mortgage" $360,000.00. By its terms the "Note and a copy of which is annexed as Exhibit "C", provided for repayment of the loan in full one year later, to wit on December 31, 2023 in the principal amount of $396,000.00. 21. As previously indicated, under the terms of the Operating Agreement of MOUNTAIN TRAILS INN, LLC, the defendant, PAUL MURARIU had absolutely no right or authority to execute a mortgage on behalf MOUNTAIN TRAILS INN, LLC., particularly, whereas here, none of the loan proceeds had ever actually been paid to, or received by MOUNTAIN TRAILS INN, LLC. Pursuant to the terms of the Operating Agreement, PAUL MURARIU was never a Managing Member of the LLC, and as previously stated, Paragraph 8.01, of the Operating Agreement clearly provided that "the real Estate of the Company s_ha not be leased, mortgaged or encumbered in any way without the unanimous consent of the members, by written authorization signed by all three members, Thus, this was an improper and illegal mortgage given by PAUL MURARIU to secure a personal debt and one for which the company should not be liable. 22. Since Mr. Warren has elected to disclose the substance of settlement discussions between the parties, I will acknowledge that there were indeed discussions between the parties a possible sale of the Real Property. However, what Mr. Warren fails to disclose to the involving Court is the fact that both he, and his clients have refused to any sale which does not provide for a payoff of PAUL MARARIU's illegal $396,000.00 (plus accrued interest) mortgage loan to CHI-KOU FAN. 8 8 of 10 FILED: GREENE COUNTY CLERK 02/27/2024 06:29 PM INDEX NO. EF2023-325 NYSCEF DOC. NO. 46 RECEIVED NYSCEF: 02/27/2024 23. In written Emails to Mr. Warren, I have proposed that the parties agree to close on the sale of the Real Property and that the issue of the Company's liability for the CHI-KOU FAN mortgage loan, or for that matter, JEFFREY PRINCE'S obligation to share in that liability, be submitted to the Court for determination following the sale and closing. Regrettably, JAMES WARREN had steadfastly rejected that proposal and instead has insisted on the payment of the clients' loan as a pre-condition to his agreement to any sale. Thus, the standoff. 24. As an example, I wrote to Mr. Warren on November 9, 2023, stating in relevant part that "If the only issue for your clients is the obligation for the second mortgage, we would be willing to submit the issue to the Court for a determination. I do understand that the funds were never advanced to the Company, but rather loaned to one or both of your client's individually and then may have been put into the company