Preview
FILED: ALBANY COUNTY CLERK 04/26/2024 11:31 AM INDEX NO. 904032-24
NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/26/2024
STATE OF NEW YORK
SUPREME COURT COUNTY OF ALBANY
Date Purchased:
Index No.:
GCM PRIME, LLC,
Plaintiff,
-against-
SUMMONS
MM DYNAMIC OF NY, INC.;
DORA BALO A/K/A DORA BALO DOLENGEWICZ;
MIKLOS MORITZ A/K/A MIKE MORITZ; POLY COATING Basis of Venue
SOLUTIONS, INC, CPLR §501
Defendants.
TO THE ABOVE NAMED DEFENDANT(S):
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 attorney(s) within 20 days after the 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
DATED: Albany, New York
April 26, 2024
GOLDBE EGALLA LLP
By:
Jonathan M. Bernstein, Esq.
At rneys for Plaintiff GCM Prime, LLC
8 Southwoods Blvd., Ste. 300
Albany, NY 12211
518-463-5400
Defendants' Addresses:
MM Dynamic of NY, Inc.
128 Tool House Road
Catskill, New York 12414
Dora Balo a/k/a Dora Balo Dolengewicz
128 Tool House Road
Catskill, New York 12414
124 Tool House Road
Catskill, New York 12414
23588261.v1
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Miklos Moritz a/k/a Mike Moritz
128 Tool House Road
Catskill, New York 12414
124 Tool House Road
Catskill, New York 12414
Poly Coating Solutions, Inc.
1627 Augusta Way
Casselberry, FL 32707
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STATE OF NEW YORK
SUPREME COURT COUNTY OF ALBANY
GCM PRIME, LLC, VERIFIED
Plaintiff, COMPLAINT
-against-
Index No.
MM DYNAMIC OF NY, INC.;
DORA BALO A/K/A DORA BALO DOLENGEWICZ;
MIKLOS MORITZ A/K/A MIKE MORITZ; POLY COATING
SOLUTIONS, INC.,
Defendants.
Plaintiff GCM Prime LLC ("GCM"), by and through its attorneys, GOLDBERG
SEGALLA, LLP, and as and for its Verified Complaint against defendants (1) MM Dynamic of
NY, Inc. D/B/A MM Dynamic of New York D/B/A MM Dynamic Roofing D/B/A MM
Dynamic of New York Roofing (the "Seller"), (2) Dora Balo A/K/A Dora Balo Dolengewicz
("Balo"), (3) Miklos Moritz A/K/A Mike Moritz ("Moritz), and (4) Poly Coating Solutions, Inc.
("Poly", and together with Balo and Moritz, collectively "Performance Guarantors," and together
with Seller, collectively "Defendants") respectfully alleges as follows:
PARTIES
1. GCM is a Delaware limited liability company which maintains an office for the
transaction of business in New York.
2. Upon information and belief, Seller is a New York corporation which maintains
its office for the transaction of business in the State of New York.
3. Upon information and belief, Balo is a natural person who resides in the State of
New York.
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4. Upon information and belief, Moritz is a natural person who resides in the State
of New York.
5. Upon information and belief, Poly is a Florida corporation which maintains its
office for the transaction of business in the State of Florida.
JURISDICTION AND VENUE
6. This Court has jurisdiction over this matter under CPLR §§ 301 & 302 because
Defendants contractually consented to the jurisdiction of the Courts of the State of New York for
any disputes arising out of their agreement with GCM that are the subject of this action, the
agreement was executed within the State of New York, and Defendants have committed tortious
actions inside and/or outside the State of New York that have caused injury to persons or
property within the State of New York.
7. Venue is proper in Albany County pursuant to CPLR § 501 as Defendants
contractually consented to the venue of the Courts of the State of New York for any disputes
arising out of their agreement with GCM and Defendants have waived any objection to venue.
FACTUAL AND PROCEDURAL HISTORY
A. The Forward Revenue Purchase Agreements (the FRPA)
1) The FRPA
8. On or about September 5, 2023, GCM and Seller entered into a Forward Revenue
Purchase Agreement and certain schedules, amendments, addenda, and other documents related
thereto (collectively, the "FRPA"), pursuant to which, inter alia, Seller sold to GCM $80,250.00
of their future receivables ("Purchased Amount") for an agreed-upon amount of $60,000.00
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("Purchase Price"), authorized GCM to receive Seller's remittances in the initially anticipated
amount of $2,240.28 every week ("Approximation Payment") until Purchased Amount plus
certain contractual fees (collectively, "Total Amount Sold") was remitted to GCM pursuant to
the terms of the FRPA, and agreed that Seller's performance of its duties and obligations
thereunder would be secured through Performance Guarantors' guaranty of Seller's performance
thereunder ("Performance Guaranty") and Defendants' grant to GCM of a security interest. (A
copy of the FRPA (redacted pursuant to NYCRR § 202.5(e)) is annexed hereto as Exhibit "1".)
9. Pursuant to the FRPA, Defendants agreed that, inter alia: (a) the transaction was a
commercial asset sale, a true sale for all purposes, and was not a loan; (b) any broker involved in
the transaction was neither GCM's agent nor representative; (c) all representations and promises
made by any broker were without effect unless contained therein and Seller was not relying upon
any representations made by any broker or other person, except those contained in the FRPA; (d)
the FRPA was an agreement entered into exclusively for business purposes; (e) Seller would
"promptly respond" to GCM's attempts to communicate at all times during its duration and that
its failure to do so within three (3) business days of GCM's repeated and overt attempts at
communication would constitute a material breach of the FRPA; (0 Seller had no intent to, and
would not, enter into any other funding transaction(s), "stack" or sell its Future Receivables (as
defined therein) to any other person, and/or or permit the creation of any additional lien, pledge,
encumbrance, or security interest thereupon; (g) Seller could, at any time throughout the duration
of the FRPA, but provided no Event of Default (as defined therein) had occurred (i) request a
rescheduling of the Approximation Payment, (ii) request a revision to Approximation Payment,
and/or (iii) obtain a reconciliation (true-up) of their past payments made to GCM; (h) Seller was
acting as a fiduciary of GCM in connection with the administration, collection, preservation, and
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remittance to GCM of the Specified Proceeds (as defined therein) which Seller agreed would be
the sole and exclusive property of GCM (irrespective of any expenses incurred by Seller in the
generation thereof); (i) the Expected Gross Monthly Revenue (as defined therein) was a
reasonable, fair, and good faith estimate of the average dollar amount of proceeds deriving from
the Future Receivables that Seller expected to collect each calendar month (with Seller
representing and warranting that Seller had no specific knowledge of any facts or circumstance
reasonably likely to materially alter their Expected Gross Monthly Revenue on a going-forward
basis); (j) Seller would deposit all cash proceeds collected or derived from the Future
Receivables into one of the Authorized Deposit Accounts (as defined therein); (k) Seller would
provide three (3) days' notice to GCM of any opening, closing, or material change to an
Authorized Deposit Account; and (1) Seller would deliver to GCM all information and
documentation reasonably requested by GCM for it to properly administer the FRPA within
three (3) business days.
10. In the FRPA, Seller represented that, inter alia: (a) it had not contemplated
temporarily or permanently suspending, contracting, closing, or otherwise diminishing its
material lines of business within the next twelve (12) months; (b) it intended to operate its
business in the ordinary course for the next twelve (12) months without interrupting, halting, or
materially altering its operations; (c) it had no plans in place to, and Seller covenanted that it
would not, sell, convey, or transfer any material portions of Seller's business operations or
business assets; (d) it had no knowledge of any material risks to, nor reason to anticipate or
suspect any suspension, contraction, reduction, closure, or other interruption of Seller's material
lines of business or any of Seller's material business operations; (e) it was not insolvent, in
bankruptcy, or in receivership and had not contemplated filing for bankruptcy (or initiating any
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other insolvency proceeding) within the prior twelve (12) months, nor was such a filing
reasonably foreseeable within the next twelve (12) months; (f) it had disclosed to GCM (i) all
material adverse information (including specific risks) relating to Seller's business and overall
financial condition, (ii) all deposit accounts and payment facilitators, (iii) all pending, threatened
or reasonably foreseeable material judgments, liens, and litigations, (iv) all pending, threatened
or reasonably foreseeable criminal investigations and prosecutions of Seller and/or its owners,
officers, or affiliates, and (v) all names, D/B/As and entities materially involved with any of
Seller's material lines of business or overall business operations (and Seller agreed that it would
not operate any of its lines of business under any other name, D/B/A or entity except as
disclosed); (g) it would not, and did not intend to, enter into any agreement to sell, convey, or
otherwise transfer any portion of Seller's future receivables or permit the creation of any, inter
alia, liability, lien, or encumbrance thereupon, i.e., entering into any stacking agreement, and
acknowledged that doing so was a material default pursuant to the FRPA; (h) it would report to
GCM all material adverse changes to its business including but not limited to imposition of, or
material adverse change as to, any material lien, judgment, or liability, settlement agreement,
and/or legal action; (i) it would not divert revenue to any account other than the Authorized
Deposit Accounts or otherwise interfere with or frustrate GCM's ability to collect the Specified
Proceeds; (j) it would use commercially reasonable efforts to notify GCM if any Approximation
Payment would be returned and act in a commercially reasonable manner and in good faith to
coordinate the rescheduling of such payment; (k) it had not engaged, and did not reasonably
foresee engaging for any reason within the next twelve (12) months, any debt negotiation
company; and, (m) all the documentation and information provided by Seller, whether in writing
or otherwise, to induce GCM's entry into the FRPA and its provision of funding was true,
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complete, accurate in all respects, and fairly and objectively portrayed its past, ongoing, and
anticipated financial condition.
11. Pursuant to the FRPA, a default would occur thereunder if, inter alia: (a) Seller
materially violated or breached, or made known its intent to materially violate or breach, any
term or condition contained therein; (b) Seller made any representation that was false, deceptive,
inaccurate, or misleading in any material respect; (c) Seller breached any warranty of the FRPA;
(d) Seller breached or made known its intention to materially breach any covenant of the FRPA;
(e) Seller performed any act to hinder, obstruct, frustrate, delay, or otherwise impede any of
GCM's rights or remedies under the FRPA; (f) there was a voluntary sale, assignment, or
transfer of any material portion of the ownership interests in, or control of, any of Seller's
businesses without GCM's prior written consent; (g) any event of default shall have occurred
under any Additional Agreement (as defined in the FRPA); and/or, (h) Seller entered into a
stacking agreement without GCM's prior consent (itself a material breach) which resulted in a
material adverse impact upon Seller's financial condition, business operations, or cash flow,
including through the initiation of legal proceedings by the counterparty to such stacking
agreement, the enforcement (or attempted enforcement) of any junior lien by the counterparty to
such stacking agreement, or the taking of any action materially impeding Seller's ability to
perform its duties and obligations pursuant to the FRPA.
12. The FRPA provides that, upon the occurrence of an Event of Default thereunder,
GCM would have the remedies provided for therein, which included, inter alia: (a) declaring the
full Default Balance (as defined therein) to be immediately due and payable; (b) declaring the
Specified Percentage (as defined therein) to be one hundred (100%) percent; (c) enforcing all of
its rights as a secured creditor; and, (d) engaging advisors, attorneys, and/or mediators acting as
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irrevocable attorney-in-fact, including through notifying Seller's account debtors of the FRPA
and GCM's secured interests, directing such amounts to be paid to GCM, and settling and
adjusting all claims and disputes, including insurance claims, and taking such other actions as
GCM deemed proper and advisable.
13. Pursuant to the FRPA and Performance Guaranty, Performance Guarantors
irrevocably, absolutely, and unconditionally guarantied the performance of Seller's duties and
obligations to GCM (upon Seller's default thereunder).
14. As security for Seller performing its duties and obligations pursuant to the FRPA,
and to secure Performance Guarantors' performance of their obligations pursuant to Performance
Guaranty, Defendants each pledged and granted to GCM, inter alia, a security interest in and lien
upon all its assets, whether then-owned, or thereafter acquired, including but not limited to: (a)
all proceeds from the sale, leasing, or other use of any real property owned and held primarily for
commercial, business, or investment purposes; (b) all present and future accounts (including all
applicable payment receivables), payment intangibles, chattel paper, equipment, inventory, cash,
fixtures, investment property, ownership interests in any entity, contract rights, documents,
instruments, and general intangibles (including all rights to payment associated therewith) (as
defined by Article 9 of the Uniform Commercial Code (the "UCC"); and, (c) all proceeds thereof
(as defined by Article 9 of the UCC) (collectively, "Collateral").
15. Defendants further agreed, inter alia: (a) not to create, incur, assume, or permit to
exist, direct or indirectly, any lien on, or with respect to, any of the Future Receivables without
the written consent of GCM; (b) not to plunder or otherwise take any action that materially
reduces the value of Collateral pledged by Seller's to GCM; (c) to execute any documents and
take any action in connection with the perfection or maintenance of GCM's security interest in
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Collateral as GCM deemed proper or advisable; (d) that GCM could take any actions GCM
deemed proper or advisable to perfect or maintain GCM's security interest in Collateral,
including filing any UCC-1 financing statements (and Defendants' ratification of all previously
filed UCC-1 financing statements caused to be filed by GCM or any affiliate of GCM with
respect to previous funding agreements with Seller, with all applicable security interests in the
Collateral pledged in the FRPA to be perfected by such previously filed UCC-1 financing
statements to the fullest extent permitted by law); and, (e) that, upon a default under the FRPA,
GCM could pursue any remedy available to it pursuant to the FRPA, Performance Guaranty, at
law, and/or in equity.
16. On July 11, 2023, GCM Capital LLC (an affiliate of GCM), to perfect its security
interests with regard to an earlier funding agreement with Seller and to additionally protect all
applicable future security interests, and to notify others of its interest therein and thereto, caused
to be filed a UCC-1 Financing Statement with the Secretary of State of the State of New York
under Filing No. 202307115974447 (the "UCC-1 Statement #1") listing C T Corporation
System, as representative (as GCM was explicitly permitted to do pursuant to UCC Section 9-
502(a)(2)), in which Defendants other than Moritz and Poly were each listed as debtors. (A copy
of the filed UCC-1 Statement #1 is annexed hereto as Exhibit "2".)
17. On September 8, 2023, to perfect its security interest in Collateral and to notify
others of its interest therein and thereto, GCM caused to be filed a UCC-1 Financing Statement
with the Secretary of State of the State of New York under Filing No. 202309086254829 (the
"UCC-1 Statement #2") listing C T Corporation System, as representative (as GCM was
explicitly permitted to do pursuant to UCC Section 9-502(a)(2)), in which Defendants other than
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Moritz were each listed as debtors. (A copy of the filed UCC-1 Statement #2 is annexed hereto
as Exhibit "3").
18. On September 8, 2023, to perfect its security interest in Collateral and to notify
others of its interest therein and thereto, GCM caused to be filed a UCC-1 Financing Statement
with the Secretary of State of the State of Florida under Filing No. 202302469685 (the "UCC-1
Statement #3") listing C T Corporation System, as representative (as GCM was explicitly
permitted to do pursuant to UCC Section 9-502(a)(2)), in which Defendants other than Moritz
were each listed as debtors. (A copy of the filed UCC-1 Statement #3 is annexed hereto as
Exhibit "4".)
19. On April 24, 2024, to perfect its security interest in Collateral and to notify other
of its interest therein and thereto, GCM caused to be filed a UCC-1 Financing Statement with the
Secretary of State of the State of New York under Filing No. 202404245597250 (the "UCC-1
Statement #4", and together with UCC-1 Statement #1, UCC-1 Statement #2, and UCC-1
Statement #3, collectively referred to herein as the "UCC-1 Statements") listing C T Corporation
System, as representative (as GCM was explicitly permitted to do pursuant to UCC Section 9-
502(a)(2)), in which Defendant Moritz was listed as the debtor. (A copy of the filed UCC-1
Statement #4 is annexed hereto as Exhibit "5".)
2) The Default
20. On or before December 5, 2023, Seller issued a stop payment instruction to
Seller's bank with respect to the agreed-upon weekly Approximation Payment of $2,240.28 to be
paid by Seller to GCM pursuant to the terms of the FRPA without any prior notice whatsoever
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being supplied to GCM by Seller (including any notice of any issue or problem whatsoever in
Seller's operation of Seller's business).
21. Seller thereafter failed to send bank statements for the Authorized Deposit
Accounts which were requested by GCM and required to be provided by Seller to GCM pursuant
to the terms of the FRPA.
22. Seller's defaults (the "Seller Defaults") include, inter alia, (i) Seller issuing a stop
payment instruction to its bank without providing any notice whatsoever to GCM (completely
frustrating GCM's ability to properly and judiciously administer the FRPA), (ii) Seller failing to
supply bank statements and other reasonably requested information and documentation as
required by the FRPA, and (iii) Seller failing to remit the purchased receivables that GCM paid
for and that Seller collected on GCM's behalf but did not remit to GCM as required by the
FRPA, the full Default Balance now due and owing to GCM pursuant to the terms of the FRPA.
23. As a result of the Seller Defaults, and pursuant to the Performance Guaranties,
Performance Guarantors were required to perform Seller's obligations pursuant to the FRPA, but
failed to do so (the "Performance Guarantor Default", and together with the Seller Defaults,
collectively, the "Defaults").
24. As a result of the Defaults, GCM was entitled to, without notice, inter alia,
exercise its rights as a secured creditor pursuant to the UCC, enforce its remedies of default
against Defendants, and recover all amounts due.
25. By email, dated December 11, 2023 (the "Default Notice"), GCM sent written
notice to Defendants advising that they defaulted under the FRPA, demanding that Defendants to
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make payment of the Default Balance, and demanding that Defendants deliver to GCM all of the
Collateral. (A copy of the Default Notice is annexed hereto as Exhibit "6".)
26. As a result of the Defaults, GCM is due as of March 29, 2024, from Defendants
the sum of $63,269.35 (representing the uncollected receivables, contractual costs and fees, and
post-default interest, less post-default payments), together with all fees, court costs, and other
expenses that will continue to accrue, contractual attorneys' fees, and pre- and post-judgment
interest at the contractual rate of sixteen (16%) percent per annum. (A copy of Seller's payment
history showing the payments made and the amounts due is annexed hereto as Exhibit "7".)
AS AND FOR A FIRST CAUSE OF ACTION
(Breach of Contract against Seller)
27. GCM repeats, reiterates, and realleges each of the foregoing allegations of this
Complaint as if more fully set forth herein.
28. As more fully set forth above, Seller defaulted pursuant to the FRPA by reason of
the Seller Defaults, including through breaching it fiduciary duty to GCM.
29. GCM performed all obligations and conditions precedent required of it under the
FRPA.
30. As a result of the Seller Defaults, and pursuant to the FRPA, GCM was entitled
to, and did, inter alia, declare the full Default Balance under the FRPA to be immediately due
and payable and declare the Specified Percentage to be one hundred (100%) percent.
31. GCM has been damaged by reason of the Seller Defaults and, as of December 5,
2023, is entitled to a money judgment against Seller pursuant to the FRPA, jointly and severally,
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in the sum of $60,207.82 together with fees, court costs, and other expenses, contractual
attorneys' fees, and pre- and post-judgment interest at the contractual rate of sixteen (16%)
percent per annum.
AS AND FOR A SECOND CAUSE OF ACTION
(Breach of Guaranty against Performance Guarantors)
32. GCM repeats, reiterates, and realleges each of the foregoing allegations of this
Complaint as if more fully set forth herein.
33. Pursuant to the Performance Guaranties, Performance Guarantors personally,
irrevocably, and unconditionally guarantied to GCM the full performance of Seller's duties and
obligations pursuant to the FRPA upon its default thereunder.
34. GCM reasonably relied upon Performance Guarantors' representations and
promises contained in the Performance Guaranty in agreeing to enter into the FRPA.
35. GCM performed all obligations and conditions precedent required of it under the
FRPA.
36. As set forth above, Seller defaulted under the terms of the FRPA.
37. As a result of the Seller Defaults, and pursuant to the Performance Guaranty,
Performance Guarantors were obligated to fully perform Seller's duties and obligations to GCM
pursuant to the FRPA.
38. Performance Guarantors failed to perform Seller's duties and obligations
pursuant to the FRPA, as required pursuant to the Performance Guaranty the FRPA, resulting in
the Performance Guarantor Default.
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39. GCM has been damaged by reason of the Performance Guarantors' Default and,
as of December 5, 2023, is entitled to a money judgment against Performance Guarantors, jointly
and severally with Seller, in the sum of $60,207.82, together with fees, court costs, and other
expenses, contractual attorneys' fees, and pre- and post-judgment interest at the contractual rate
of sixteen (16%) percent per annum.
AS AND FOR A THIRD CAUSE OF ACTION
(Foreclosure of Security Interest)
40. GCM repeats, reiterates, and realleges each of the foregoing allegations of this
Complaint as if more fully set forth herein.
41. As set forth above, GCM is a secured creditor of Defendants and holds a properly
perfected security interest in and to the Collateral.
42. Pursuant to the FRPA and the UCC, and by reason of the Defaults, GCM is
entitled, inter alia, to: (a) take possession of the Collateral; (b) require Defendants to assemble
the Collateral and make same available to GCM at a place designated by GCM; (c) dispose of
and/or collect the Collateral and apply the proceeds thereof to the obligations of Defendants;
and/or, (d) exercise any and all other rights available to it as a secured creditor pursuant to the
UCC.
43. Accordingly, GCM is entitled to a judgment foreclosing upon its security interest
in the Collateral, awarding to GCM immediate possession of the Collateral, permitting GCM to
collect Defendants' receivables, and permitting GCM to dispose of the Collateral and apply the
proceeds thereof to the obligations and liabilities of Defendants in accordance with Article Nine
of the UCC.
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AS AND FOR A FOURTH CAUSE OF ACTION
(Unjust Enrichment)
44. GCM repeats, reiterates, and realleges each of the foregoing allegations of this
Complaint as if more fully set forth herein.
45. In the alternative, and in the event that this Court finds that GCM is not entitled to
recover from Defendants under its first and/or second causes of action for breach of contract,
GCM is nevertheless entitled to recover from Defendants a money judgment under the theory of
unjust enrichment.
As set forth above, GCM paid over to Seller (or to others on its behalf) the sum of
$60,000 to purchase $80,250.00 of its future receivables.
46. Despite Seller's receipt of the purchase price from GCM (and the benefit it and
Performance Guarantors received therefrom), Seller's promises to make remittances to GCM of
the Total Amount Sold, Performance Guarantors' promises to fully perform Seller's obligations
upon their failure to do so, and the Defaults, Defendants wrongfully retained possession of the
Collateral and Seller wrongfully retained possession of the moneys paid to it and the benefit
received by it from GCM.
47. It is against equity and good conscience to permit Defendants to continue to retain
the benefit of their wrongful retention of the Collateral and/or permit Seller to retain the moneys
paid to it (or on its behalf) by GCM.
48. Defendants have been unjustly enriched by their retention, control, and use of
such moneys and the Collateral, and GCM has been damaged thereby, and is entitled to a money
judgment against Defendants, jointly and severally, in an amount to be determined at trial.
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AS AND FOR A FIFTH CAUSE OF ACTION
(Conversion)
49. GCM repeats, reiterates, and realleges each of the foregoing allegations of this
Complaint as if more fully set forth herein.
50. As set forth above, Defendants defaulted under the FRPA, giving GCM an
immediate superior right to possession of the Collateral.
51. GCM demanded in the Default Notice, and by this Complaint again demands,
possession of the Collateral.
52. Despite GCM's demands, Defendants failed and refused, and continue to refuse,
to deliver possession of the Collateral to GCM and have instead exercised unlawful dominion
and control over the Collateral to the exclusion of GCM's rights, including through continuing to
use, or causing the use of, the Collateral in Seller's business and by Performance Guarantors
personally.
53. By reason of Defendants' exercise of unlawful dominion and control over the
Collateral, their interference with GCM's superior rights therein, and their refusal to return same
to GCM despite due demand, Defendants have intentionally and wrongfully converted and
detained the Collateral.
54. The Collateral has a value of not less than $63,269.35.
55. As a result of Defendants' wrongful conversion and detention of the Collateral,
GCM has suffered damages, and is entitled to a money judgment against Defendants, jointly and
severally, in an amount to be determined at trial, but in no event less than the value of the
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Collateral, together with interest, costs, fees, disbursements, and other amounts that will continue
to accrue.
AS AND FOR A SIXTH CAUSE OF ACTION
(Replevin)
56. GCM repeats, reiterates, and realleges each of the foregoing allegations of this
Complaint as if more fully set forth herein.
57. As set forth above, Defendants defaulted under the FRPA.
58. Pursuant to the terms of the FRPA and the UCC, and as a result of the Defaults,
GCM, inter alia, has a superior right in and to the Collateral and is entitled to enforce its security
interest in and to the Collateral, and Defendants have no further right to possession or receipt of
any portion of the Collateral or the proceeds thereof.
59. Despite the Defaults, Defendants have illegally maintained possession of the
Collateral in contravention of GCM's rights.
60. The Collateral has a value of not less than $63,269.35.
61. Accordingly, GCM is entitled to a judgment of possession of the Collateral.
WHEREFORE, plaintiff GCM Prime LLC respectfully requests that the Court issue a
judgment as follows:
(a) on the first cause of action for breach of contract, awarding to GCM a money
judgment against Seller, jointly and severally with Performance Guarantors, in the
sum of $60,207.82, together with fees, court costs, and other expenses,
contractual attorneys' fees, and pre- and post-judgment interest at the contractual
rate of sixteen (16%) percent per annum;
(b) on the second cause of action for breach of guaranty, awarding to GCM a
money judgment against Performance Guarantors, jointly and severally with
Seller, in the sum of $60,207.82, together with fees, court costs, and other
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expenses, contractual attorneys' fees, and pre- and post-judgment interest at the
contractual rate of sixteen (16%) percent per annum;
(c) on the third cause of action for foreclosure of security interest, awarding to
GCM a judgment foreclosing upon its security interest in the Collateral, awarding
to GCM immediate possession of the Collateral, permitting GCM to collect
Defendants' receivables, and permitting GCM to dispose of the Collateral and
apply the proceeds thereof to the obligations and liabilities of Defendants in
accordance with Article Nine of the UCC;
(d) on the fourth cause of action for unjust enrichment, and in the alternative,
awarding to GCM a money judgment against Defendants, jointly and severally, in
an amount to be determined at trial;
(e) on the fifth cause of action for conversion, awarding to GCM a money
judgment against Defendants, jointly and severally, in an amount to be
determined at trial, but in no event less than the value of the Collateral, together
with interest, costs, fees, disbursements, and other amounts that will continue to
accrue,
(f) on the sixth cause of action for replevin, awarding to GCM a judgment of
possession of the Collateral; and,
(i) awarding to GCM such other and further relief which as to this Court seems
just, proper, and equitable.
DATED: Albany, New York
April 24, 2024
GOLDBERQ'S ALLA, L
By (
onathan M. Bernstein, Esq.
A tsrneysfor Plaintiff GCM Prime, LLC
8 Southwoods Boulevard, Suite 300
Albany, New York 12211
(518) 463-5400
17
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VERIFICATION
STATE OF NEW YORK
) SS.:
COUNTY OF WESTCHESTER
RICHARD GIPSTEIN, being duly sworn, deposes and says as follows: I am a principal of
GCM Prime EEC, the plaintiff in the within action. I have read the foregoing Summons and
Verified Complaint and know the contents thereof to be true based upon my own knowledge, except
as to the matters therein stated to be alleged upon information and belief and as to those matters, I
believe them to be true.
./ . I
1.1.. I
r
• ./ ..../1/A"-i
Richard Gipstein
Sworn to before me this
y day of April, 2024
Notary Public
DIANE M. GIPSTEIN
Notary Public. State of New York
0201e1.97145. V.:estchester County
Commission Expires December 1, 20
IS
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Preview
FILED: ALBANY COUNTY CLERK 04/26/2024 11:31 AM INDEX NO. 904032-24 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/26/2024 STATE OF NEW YORK SUPREME COURT COUNTY OF ALBANY Date Purchased: Index No.: GCM PRIME, LLC, Plaintiff, -against- SUMMONS MM DYNAMIC OF NY, INC.; DORA BALO A/K/A DORA BALO DOLENGEWICZ; MIKLOS MORITZ A/K/A MIKE MORITZ; POLY COATING Basis of Venue SOLUTIONS, INC, CPLR §501 Defendants. TO THE ABOVE NAMED DEFENDANT(S): 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 attorney(s) within 20 days after the 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 DATED: Albany, New York April 26, 2024 GOLDBE EGALLA LLP By: Jonathan M. Bernstein, Esq. At rneys for Plaintiff GCM Prime, LLC 8 Southwoods Blvd., Ste. 300 Albany, NY 12211 518-463-5400 Defendants' Addresses: MM Dynamic of NY, Inc. 128 Tool House Road Catskill, New York 12414 Dora Balo a/k/a Dora Balo Dolengewicz 128 Tool House Road Catskill, New York 12414 124 Tool House Road Catskill, New York 12414 23588261.v1 1 of 20 FILED: ALBANY COUNTY CLERK 04/26/2024 11:31 AM INDEX NO. 904032-24 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/26/2024 Miklos Moritz a/k/a Mike Moritz 128 Tool House Road Catskill, New York 12414 124 Tool House Road Catskill, New York 12414 Poly Coating Solutions, Inc. 1627 Augusta Way Casselberry, FL 32707 23588261.vl 2 of 20 FILED: ALBANY COUNTY CLERK 04/26/2024 11:31 AM INDEX NO. 904032-24 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/26/2024 STATE OF NEW YORK SUPREME COURT COUNTY OF ALBANY GCM PRIME, LLC, VERIFIED Plaintiff, COMPLAINT -against- Index No. MM DYNAMIC OF NY, INC.; DORA BALO A/K/A DORA BALO DOLENGEWICZ; MIKLOS MORITZ A/K/A MIKE MORITZ; POLY COATING SOLUTIONS, INC., Defendants. Plaintiff GCM Prime LLC ("GCM"), by and through its attorneys, GOLDBERG SEGALLA, LLP, and as and for its Verified Complaint against defendants (1) MM Dynamic of NY, Inc. D/B/A MM Dynamic of New York D/B/A MM Dynamic Roofing D/B/A MM Dynamic of New York Roofing (the "Seller"), (2) Dora Balo A/K/A Dora Balo Dolengewicz ("Balo"), (3) Miklos Moritz A/K/A Mike Moritz ("Moritz), and (4) Poly Coating Solutions, Inc. ("Poly", and together with Balo and Moritz, collectively "Performance Guarantors," and together with Seller, collectively "Defendants") respectfully alleges as follows: PARTIES 1. GCM is a Delaware limited liability company which maintains an office for the transaction of business in New York. 2. Upon information and belief, Seller is a New York corporation which maintains its office for the transaction of business in the State of New York. 3. Upon information and belief, Balo is a natural person who resides in the State of New York. 1 IM AN AG E \2073 \ 0004 \ 40303745. v 1-4/24/24 3 of 20 FILED: ALBANY COUNTY CLERK 04/26/2024 11:31 AM INDEX NO. 904032-24 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/26/2024 4. Upon information and belief, Moritz is a natural person who resides in the State of New York. 5. Upon information and belief, Poly is a Florida corporation which maintains its office for the transaction of business in the State of Florida. JURISDICTION AND VENUE 6. This Court has jurisdiction over this matter under CPLR §§ 301 & 302 because Defendants contractually consented to the jurisdiction of the Courts of the State of New York for any disputes arising out of their agreement with GCM that are the subject of this action, the agreement was executed within the State of New York, and Defendants have committed tortious actions inside and/or outside the State of New York that have caused injury to persons or property within the State of New York. 7. Venue is proper in Albany County pursuant to CPLR § 501 as Defendants contractually consented to the venue of the Courts of the State of New York for any disputes arising out of their agreement with GCM and Defendants have waived any objection to venue. FACTUAL AND PROCEDURAL HISTORY A. The Forward Revenue Purchase Agreements (the FRPA) 1) The FRPA 8. On or about September 5, 2023, GCM and Seller entered into a Forward Revenue Purchase Agreement and certain schedules, amendments, addenda, and other documents related thereto (collectively, the "FRPA"), pursuant to which, inter alia, Seller sold to GCM $80,250.00 of their future receivables ("Purchased Amount") for an agreed-upon amount of $60,000.00 2 IMANAGE\2073\ 0004\40303745.v I -4/24/24 4 of 20 FILED: ALBANY COUNTY CLERK 04/26/2024 11:31 AM INDEX NO. 904032-24 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/26/2024 ("Purchase Price"), authorized GCM to receive Seller's remittances in the initially anticipated amount of $2,240.28 every week ("Approximation Payment") until Purchased Amount plus certain contractual fees (collectively, "Total Amount Sold") was remitted to GCM pursuant to the terms of the FRPA, and agreed that Seller's performance of its duties and obligations thereunder would be secured through Performance Guarantors' guaranty of Seller's performance thereunder ("Performance Guaranty") and Defendants' grant to GCM of a security interest. (A copy of the FRPA (redacted pursuant to NYCRR § 202.5(e)) is annexed hereto as Exhibit "1".) 9. Pursuant to the FRPA, Defendants agreed that, inter alia: (a) the transaction was a commercial asset sale, a true sale for all purposes, and was not a loan; (b) any broker involved in the transaction was neither GCM's agent nor representative; (c) all representations and promises made by any broker were without effect unless contained therein and Seller was not relying upon any representations made by any broker or other person, except those contained in the FRPA; (d) the FRPA was an agreement entered into exclusively for business purposes; (e) Seller would "promptly respond" to GCM's attempts to communicate at all times during its duration and that its failure to do so within three (3) business days of GCM's repeated and overt attempts at communication would constitute a material breach of the FRPA; (0 Seller had no intent to, and would not, enter into any other funding transaction(s), "stack" or sell its Future Receivables (as defined therein) to any other person, and/or or permit the creation of any additional lien, pledge, encumbrance, or security interest thereupon; (g) Seller could, at any time throughout the duration of the FRPA, but provided no Event of Default (as defined therein) had occurred (i) request a rescheduling of the Approximation Payment, (ii) request a revision to Approximation Payment, and/or (iii) obtain a reconciliation (true-up) of their past payments made to GCM; (h) Seller was acting as a fiduciary of GCM in connection with the administration, collection, preservation, and 3 I MANAG E\2073 \ 0004\40303745.v I.4/24/24 5 of 20 FILED: ALBANY COUNTY CLERK 04/26/2024 11:31 AM INDEX NO. 904032-24 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/26/2024 remittance to GCM of the Specified Proceeds (as defined therein) which Seller agreed would be the sole and exclusive property of GCM (irrespective of any expenses incurred by Seller in the generation thereof); (i) the Expected Gross Monthly Revenue (as defined therein) was a reasonable, fair, and good faith estimate of the average dollar amount of proceeds deriving from the Future Receivables that Seller expected to collect each calendar month (with Seller representing and warranting that Seller had no specific knowledge of any facts or circumstance reasonably likely to materially alter their Expected Gross Monthly Revenue on a going-forward basis); (j) Seller would deposit all cash proceeds collected or derived from the Future Receivables into one of the Authorized Deposit Accounts (as defined therein); (k) Seller would provide three (3) days' notice to GCM of any opening, closing, or material change to an Authorized Deposit Account; and (1) Seller would deliver to GCM all information and documentation reasonably requested by GCM for it to properly administer the FRPA within three (3) business days. 10. In the FRPA, Seller represented that, inter alia: (a) it had not contemplated temporarily or permanently suspending, contracting, closing, or otherwise diminishing its material lines of business within the next twelve (12) months; (b) it intended to operate its business in the ordinary course for the next twelve (12) months without interrupting, halting, or materially altering its operations; (c) it had no plans in place to, and Seller covenanted that it would not, sell, convey, or transfer any material portions of Seller's business operations or business assets; (d) it had no knowledge of any material risks to, nor reason to anticipate or suspect any suspension, contraction, reduction, closure, or other interruption of Seller's material lines of business or any of Seller's material business operations; (e) it was not insolvent, in bankruptcy, or in receivership and had not contemplated filing for bankruptcy (or initiating any 4 IMANAGE\2073\0004\40303745.v14/24/24 6 of 20 FILED: ALBANY COUNTY CLERK 04/26/2024 11:31 AM INDEX NO. 904032-24 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/26/2024 other insolvency proceeding) within the prior twelve (12) months, nor was such a filing reasonably foreseeable within the next twelve (12) months; (f) it had disclosed to GCM (i) all material adverse information (including specific risks) relating to Seller's business and overall financial condition, (ii) all deposit accounts and payment facilitators, (iii) all pending, threatened or reasonably foreseeable material judgments, liens, and litigations, (iv) all pending, threatened or reasonably foreseeable criminal investigations and prosecutions of Seller and/or its owners, officers, or affiliates, and (v) all names, D/B/As and entities materially involved with any of Seller's material lines of business or overall business operations (and Seller agreed that it would not operate any of its lines of business under any other name, D/B/A or entity except as disclosed); (g) it would not, and did not intend to, enter into any agreement to sell, convey, or otherwise transfer any portion of Seller's future receivables or permit the creation of any, inter alia, liability, lien, or encumbrance thereupon, i.e., entering into any stacking agreement, and acknowledged that doing so was a material default pursuant to the FRPA; (h) it would report to GCM all material adverse changes to its business including but not limited to imposition of, or material adverse change as to, any material lien, judgment, or liability, settlement agreement, and/or legal action; (i) it would not divert revenue to any account other than the Authorized Deposit Accounts or otherwise interfere with or frustrate GCM's ability to collect the Specified Proceeds; (j) it would use commercially reasonable efforts to notify GCM if any Approximation Payment would be returned and act in a commercially reasonable manner and in good faith to coordinate the rescheduling of such payment; (k) it had not engaged, and did not reasonably foresee engaging for any reason within the next twelve (12) months, any debt negotiation company; and, (m) all the documentation and information provided by Seller, whether in writing or otherwise, to induce GCM's entry into the FRPA and its provision of funding was true, IMAN AG E \2073 \ 0004 \ 40303745. v I -4/24/24 7 of 20 FILED: ALBANY COUNTY CLERK 04/26/2024 11:31 AM INDEX NO. 904032-24 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/26/2024 complete, accurate in all respects, and fairly and objectively portrayed its past, ongoing, and anticipated financial condition. 11. Pursuant to the FRPA, a default would occur thereunder if, inter alia: (a) Seller materially violated or breached, or made known its intent to materially violate or breach, any term or condition contained therein; (b) Seller made any representation that was false, deceptive, inaccurate, or misleading in any material respect; (c) Seller breached any warranty of the FRPA; (d) Seller breached or made known its intention to materially breach any covenant of the FRPA; (e) Seller performed any act to hinder, obstruct, frustrate, delay, or otherwise impede any of GCM's rights or remedies under the FRPA; (f) there was a voluntary sale, assignment, or transfer of any material portion of the ownership interests in, or control of, any of Seller's businesses without GCM's prior written consent; (g) any event of default shall have occurred under any Additional Agreement (as defined in the FRPA); and/or, (h) Seller entered into a stacking agreement without GCM's prior consent (itself a material breach) which resulted in a material adverse impact upon Seller's financial condition, business operations, or cash flow, including through the initiation of legal proceedings by the counterparty to such stacking agreement, the enforcement (or attempted enforcement) of any junior lien by the counterparty to such stacking agreement, or the taking of any action materially impeding Seller's ability to perform its duties and obligations pursuant to the FRPA. 12. The FRPA provides that, upon the occurrence of an Event of Default thereunder, GCM would have the remedies provided for therein, which included, inter alia: (a) declaring the full Default Balance (as defined therein) to be immediately due and payable; (b) declaring the Specified Percentage (as defined therein) to be one hundred (100%) percent; (c) enforcing all of its rights as a secured creditor; and, (d) engaging advisors, attorneys, and/or mediators acting as 6 I M AN AG E2073 \ 0004\40303745.v I -4/24/24 8 of 20 FILED: ALBANY COUNTY CLERK 04/26/2024 11:31 AM INDEX NO. 904032-24 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/26/2024 irrevocable attorney-in-fact, including through notifying Seller's account debtors of the FRPA and GCM's secured interests, directing such amounts to be paid to GCM, and settling and adjusting all claims and disputes, including insurance claims, and taking such other actions as GCM deemed proper and advisable. 13. Pursuant to the FRPA and Performance Guaranty, Performance Guarantors irrevocably, absolutely, and unconditionally guarantied the performance of Seller's duties and obligations to GCM (upon Seller's default thereunder). 14. As security for Seller performing its duties and obligations pursuant to the FRPA, and to secure Performance Guarantors' performance of their obligations pursuant to Performance Guaranty, Defendants each pledged and granted to GCM, inter alia, a security interest in and lien upon all its assets, whether then-owned, or thereafter acquired, including but not limited to: (a) all proceeds from the sale, leasing, or other use of any real property owned and held primarily for commercial, business, or investment purposes; (b) all present and future accounts (including all applicable payment receivables), payment intangibles, chattel paper, equipment, inventory, cash, fixtures, investment property, ownership interests in any entity, contract rights, documents, instruments, and general intangibles (including all rights to payment associated therewith) (as defined by Article 9 of the Uniform Commercial Code (the "UCC"); and, (c) all proceeds thereof (as defined by Article 9 of the UCC) (collectively, "Collateral"). 15. Defendants further agreed, inter alia: (a) not to create, incur, assume, or permit to exist, direct or indirectly, any lien on, or with respect to, any of the Future Receivables without the written consent of GCM; (b) not to plunder or otherwise take any action that materially reduces the value of Collateral pledged by Seller's to GCM; (c) to execute any documents and take any action in connection with the perfection or maintenance of GCM's security interest in 7 IMANAGE\2073\0004\40303745.v1-4/24/24 9 of 20 FILED: ALBANY COUNTY CLERK 04/26/2024 11:31 AM INDEX NO. 904032-24 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/26/2024 Collateral as GCM deemed proper or advisable; (d) that GCM could take any actions GCM deemed proper or advisable to perfect or maintain GCM's security interest in Collateral, including filing any UCC-1 financing statements (and Defendants' ratification of all previously filed UCC-1 financing statements caused to be filed by GCM or any affiliate of GCM with respect to previous funding agreements with Seller, with all applicable security interests in the Collateral pledged in the FRPA to be perfected by such previously filed UCC-1 financing statements to the fullest extent permitted by law); and, (e) that, upon a default under the FRPA, GCM could pursue any remedy available to it pursuant to the FRPA, Performance Guaranty, at law, and/or in equity. 16. On July 11, 2023, GCM Capital LLC (an affiliate of GCM), to perfect its security interests with regard to an earlier funding agreement with Seller and to additionally protect all applicable future security interests, and to notify others of its interest therein and thereto, caused to be filed a UCC-1 Financing Statement with the Secretary of State of the State of New York under Filing No. 202307115974447 (the "UCC-1 Statement #1") listing C T Corporation System, as representative (as GCM was explicitly permitted to do pursuant to UCC Section 9- 502(a)(2)), in which Defendants other than Moritz and Poly were each listed as debtors. (A copy of the filed UCC-1 Statement #1 is annexed hereto as Exhibit "2".) 17. On September 8, 2023, to perfect its security interest in Collateral and to notify others of its interest therein and thereto, GCM caused to be filed a UCC-1 Financing Statement with the Secretary of State of the State of New York under Filing No. 202309086254829 (the "UCC-1 Statement #2") listing C T Corporation System, as representative (as GCM was explicitly permitted to do pursuant to UCC Section 9-502(a)(2)), in which Defendants other than 8 'MANAGE \2073 \ 0004 \40303745. v1-4/24/24 10 of 20 FILED: ALBANY COUNTY CLERK 04/26/2024 11:31 AM INDEX NO. 904032-24 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/26/2024 Moritz were each listed as debtors. (A copy of the filed UCC-1 Statement #2 is annexed hereto as Exhibit "3"). 18. On September 8, 2023, to perfect its security interest in Collateral and to notify others of its interest therein and thereto, GCM caused to be filed a UCC-1 Financing Statement with the Secretary of State of the State of Florida under Filing No. 202302469685 (the "UCC-1 Statement #3") listing C T Corporation System, as representative (as GCM was explicitly permitted to do pursuant to UCC Section 9-502(a)(2)), in which Defendants other than Moritz were each listed as debtors. (A copy of the filed UCC-1 Statement #3 is annexed hereto as Exhibit "4".) 19. On April 24, 2024, to perfect its security interest in Collateral and to notify other of its interest therein and thereto, GCM caused to be filed a UCC-1 Financing Statement with the Secretary of State of the State of New York under Filing No. 202404245597250 (the "UCC-1 Statement #4", and together with UCC-1 Statement #1, UCC-1 Statement #2, and UCC-1 Statement #3, collectively referred to herein as the "UCC-1 Statements") listing C T Corporation System, as representative (as GCM was explicitly permitted to do pursuant to UCC Section 9- 502(a)(2)), in which Defendant Moritz was listed as the debtor. (A copy of the filed UCC-1 Statement #4 is annexed hereto as Exhibit "5".) 2) The Default 20. On or before December 5, 2023, Seller issued a stop payment instruction to Seller's bank with respect to the agreed-upon weekly Approximation Payment of $2,240.28 to be paid by Seller to GCM pursuant to the terms of the FRPA without any prior notice whatsoever 9 1M AN AG E \2073 \ 0004 \40303745.v1-4/24/24 11 of 20 FILED: ALBANY COUNTY CLERK 04/26/2024 11:31 AM INDEX NO. 904032-24 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/26/2024 being supplied to GCM by Seller (including any notice of any issue or problem whatsoever in Seller's operation of Seller's business). 21. Seller thereafter failed to send bank statements for the Authorized Deposit Accounts which were requested by GCM and required to be provided by Seller to GCM pursuant to the terms of the FRPA. 22. Seller's defaults (the "Seller Defaults") include, inter alia, (i) Seller issuing a stop payment instruction to its bank without providing any notice whatsoever to GCM (completely frustrating GCM's ability to properly and judiciously administer the FRPA), (ii) Seller failing to supply bank statements and other reasonably requested information and documentation as required by the FRPA, and (iii) Seller failing to remit the purchased receivables that GCM paid for and that Seller collected on GCM's behalf but did not remit to GCM as required by the FRPA, the full Default Balance now due and owing to GCM pursuant to the terms of the FRPA. 23. As a result of the Seller Defaults, and pursuant to the Performance Guaranties, Performance Guarantors were required to perform Seller's obligations pursuant to the FRPA, but failed to do so (the "Performance Guarantor Default", and together with the Seller Defaults, collectively, the "Defaults"). 24. As a result of the Defaults, GCM was entitled to, without notice, inter alia, exercise its rights as a secured creditor pursuant to the UCC, enforce its remedies of default against Defendants, and recover all amounts due. 25. By email, dated December 11, 2023 (the "Default Notice"), GCM sent written notice to Defendants advising that they defaulted under the FRPA, demanding that Defendants to 10 1MANAGE\2073\0004\40303745.v1-4/24/24 12 of 20 FILED: ALBANY COUNTY CLERK 04/26/2024 11:31 AM INDEX NO. 904032-24 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/26/2024 make payment of the Default Balance, and demanding that Defendants deliver to GCM all of the Collateral. (A copy of the Default Notice is annexed hereto as Exhibit "6".) 26. As a result of the Defaults, GCM is due as of March 29, 2024, from Defendants the sum of $63,269.35 (representing the uncollected receivables, contractual costs and fees, and post-default interest, less post-default payments), together with all fees, court costs, and other expenses that will continue to accrue, contractual attorneys' fees, and pre- and post-judgment interest at the contractual rate of sixteen (16%) percent per annum. (A copy of Seller's payment history showing the payments made and the amounts due is annexed hereto as Exhibit "7".) AS AND FOR A FIRST CAUSE OF ACTION (Breach of Contract against Seller) 27. GCM repeats, reiterates, and realleges each of the foregoing allegations of this Complaint as if more fully set forth herein. 28. As more fully set forth above, Seller defaulted pursuant to the FRPA by reason of the Seller Defaults, including through breaching it fiduciary duty to GCM. 29. GCM performed all obligations and conditions precedent required of it under the FRPA. 30. As a result of the Seller Defaults, and pursuant to the FRPA, GCM was entitled to, and did, inter alia, declare the full Default Balance under the FRPA to be immediately due and payable and declare the Specified Percentage to be one hundred (100%) percent. 31. GCM has been damaged by reason of the Seller Defaults and, as of December 5, 2023, is entitled to a money judgment against Seller pursuant to the FRPA, jointly and severally, 11 I M ANAGE \2073 \ 0004\40303745.v I -4/24/24 13 of 20 FILED: ALBANY COUNTY CLERK 04/26/2024 11:31 AM INDEX NO. 904032-24 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/26/2024 in the sum of $60,207.82 together with fees, court costs, and other expenses, contractual attorneys' fees, and pre- and post-judgment interest at the contractual rate of sixteen (16%) percent per annum. AS AND FOR A SECOND CAUSE OF ACTION (Breach of Guaranty against Performance Guarantors) 32. GCM repeats, reiterates, and realleges each of the foregoing allegations of this Complaint as if more fully set forth herein. 33. Pursuant to the Performance Guaranties, Performance Guarantors personally, irrevocably, and unconditionally guarantied to GCM the full performance of Seller's duties and obligations pursuant to the FRPA upon its default thereunder. 34. GCM reasonably relied upon Performance Guarantors' representations and promises contained in the Performance Guaranty in agreeing to enter into the FRPA. 35. GCM performed all obligations and conditions precedent required of it under the FRPA. 36. As set forth above, Seller defaulted under the terms of the FRPA. 37. As a result of the Seller Defaults, and pursuant to the Performance Guaranty, Performance Guarantors were obligated to fully perform Seller's duties and obligations to GCM pursuant to the FRPA. 38. Performance Guarantors failed to perform Seller's duties and obligations pursuant to the FRPA, as required pursuant to the Performance Guaranty the FRPA, resulting in the Performance Guarantor Default. 12 IMANAGE \2073 \ 0004\40303745.v I -4/24/24 14 of 20 FILED: ALBANY COUNTY CLERK 04/26/2024 11:31 AM INDEX NO. 904032-24 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/26/2024 39. GCM has been damaged by reason of the Performance Guarantors' Default and, as of December 5, 2023, is entitled to a money judgment against Performance Guarantors, jointly and severally with Seller, in the sum of $60,207.82, together with fees, court costs, and other expenses, contractual attorneys' fees, and pre- and post-judgment interest at the contractual rate of sixteen (16%) percent per annum. AS AND FOR A THIRD CAUSE OF ACTION (Foreclosure of Security Interest) 40. GCM repeats, reiterates, and realleges each of the foregoing allegations of this Complaint as if more fully set forth herein. 41. As set forth above, GCM is a secured creditor of Defendants and holds a properly perfected security interest in and to the Collateral. 42. Pursuant to the FRPA and the UCC, and by reason of the Defaults, GCM is entitled, inter alia, to: (a) take possession of the Collateral; (b) require Defendants to assemble the Collateral and make same available to GCM at a place designated by GCM; (c) dispose of and/or collect the Collateral and apply the proceeds thereof to the obligations of Defendants; and/or, (d) exercise any and all other rights available to it as a secured creditor pursuant to the UCC. 43. Accordingly, GCM is entitled to a judgment foreclosing upon its security interest in the Collateral, awarding to GCM immediate possession of the Collateral, permitting GCM to collect Defendants' receivables, and permitting GCM to dispose of the Collateral and apply the proceeds thereof to the obligations and liabilities of Defendants in accordance with Article Nine of the UCC. 13 I MANAG E\2073 \ 0004\40303745.v I -4/24/24 15 of 20 FILED: ALBANY COUNTY CLERK 04/26/2024 11:31 AM INDEX NO. 904032-24 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/26/2024 AS AND FOR A FOURTH CAUSE OF ACTION (Unjust Enrichment) 44. GCM repeats, reiterates, and realleges each of the foregoing allegations of this Complaint as if more fully set forth herein. 45. In the alternative, and in the event that this Court finds that GCM is not entitled to recover from Defendants under its first and/or second causes of action for breach of contract, GCM is nevertheless entitled to recover from Defendants a money judgment under the theory of unjust enrichment. As set forth above, GCM paid over to Seller (or to others on its behalf) the sum of $60,000 to purchase $80,250.00 of its future receivables. 46. Despite Seller's receipt of the purchase price from GCM (and the benefit it and Performance Guarantors received therefrom), Seller's promises to make remittances to GCM of the Total Amount Sold, Performance Guarantors' promises to fully perform Seller's obligations upon their failure to do so, and the Defaults, Defendants wrongfully retained possession of the Collateral and Seller wrongfully retained possession of the moneys paid to it and the benefit received by it from GCM. 47. It is against equity and good conscience to permit Defendants to continue to retain the benefit of their wrongful retention of the Collateral and/or permit Seller to retain the moneys paid to it (or on its behalf) by GCM. 48. Defendants have been unjustly enriched by their retention, control, and use of such moneys and the Collateral, and GCM has been damaged thereby, and is entitled to a money judgment against Defendants, jointly and severally, in an amount to be determined at trial. 14 !MANAGE \2073 \ 0004 \40303745. v1-4/24/24 16 of 20 FILED: ALBANY COUNTY CLERK 04/26/2024 11:31 AM INDEX NO. 904032-24 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/26/2024 AS AND FOR A FIFTH CAUSE OF ACTION (Conversion) 49. GCM repeats, reiterates, and realleges each of the foregoing allegations of this Complaint as if more fully set forth herein. 50. As set forth above, Defendants defaulted under the FRPA, giving GCM an immediate superior right to possession of the Collateral. 51. GCM demanded in the Default Notice, and by this Complaint again demands, possession of the Collateral. 52. Despite GCM's demands, Defendants failed and refused, and continue to refuse, to deliver possession of the Collateral to GCM and have instead exercised unlawful dominion and control over the Collateral to the exclusion of GCM's rights, including through continuing to use, or causing the use of, the Collateral in Seller's business and by Performance Guarantors personally. 53. By reason of Defendants' exercise of unlawful dominion and control over the Collateral, their interference with GCM's superior rights therein, and their refusal to return same to GCM despite due demand, Defendants have intentionally and wrongfully converted and detained the Collateral. 54. The Collateral has a value of not less than $63,269.35. 55. As a result of Defendants' wrongful conversion and detention of the Collateral, GCM has suffered damages, and is entitled to a money judgment against Defendants, jointly and severally, in an amount to be determined at trial, but in no event less than the value of the IMANAGE\2073\0004\40303745.v1-4/24/24 17 of 20 FILED: ALBANY COUNTY CLERK 04/26/2024 11:31 AM INDEX NO. 904032-24 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/26/2024 Collateral, together with interest, costs, fees, disbursements, and other amounts that will continue to accrue. AS AND FOR A SIXTH CAUSE OF ACTION (Replevin) 56. GCM repeats, reiterates, and realleges each of the foregoing allegations of this Complaint as if more fully set forth herein. 57. As set forth above, Defendants defaulted under the FRPA. 58. Pursuant to the terms of the FRPA and the UCC, and as a result of the Defaults, GCM, inter alia, has a superior right in and to the Collateral and is entitled to enforce its security interest in and to the Collateral, and Defendants have no further right to possession or receipt of any portion of the Collateral or the proceeds thereof. 59. Despite the Defaults, Defendants have illegally maintained possession of the Collateral in contravention of GCM's rights. 60. The Collateral has a value of not less than $63,269.35. 61. Accordingly, GCM is entitled to a judgment of possession of the Collateral. WHEREFORE, plaintiff GCM Prime LLC respectfully requests that the Court issue a judgment as follows: (a) on the first cause of action for breach of contract, awarding to GCM a money judgment against Seller, jointly and severally with Performance Guarantors, in the sum of $60,207.82, together with fees, court costs, and other expenses, contractual attorneys' fees, and pre- and post-judgment interest at the contractual rate of sixteen (16%) percent per annum; (b) on the second cause of action for breach of guaranty, awarding to GCM a money judgment against Performance Guarantors, jointly and severally with Seller, in the sum of $60,207.82, together with fees, court costs, and other 16 I MAN AG E\2073 \ 0004 \40303745. v1-4/24/24 18 of 20 FILED: ALBANY COUNTY CLERK 04/26/2024 11:31 AM INDEX NO. 904032-24 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/26/2024 expenses, contractual attorneys' fees, and pre- and post-judgment interest at the contractual rate of sixteen (16%) percent per annum; (c) on the third cause of action for foreclosure of security interest, awarding to GCM a judgment foreclosing upon its security interest in the Collateral, awarding to GCM immediate possession of the Collateral, permitting GCM to collect Defendants' receivables, and permitting GCM to dispose of the Collateral and apply the proceeds thereof to the obligations and liabilities of Defendants in accordance with Article Nine of the UCC; (d) on the fourth cause of action for unjust enrichment, and in the alternative, awarding to GCM a money judgment against Defendants, jointly and severally, in an amount to be determined at trial; (e) on the fifth cause of action for conversion, awarding to GCM a money judgment against Defendants, jointly and severally, in an amount to be determined at trial, but in no event less than the value of the Collateral, together with interest, costs, fees, disbursements, and other amounts that will continue to accrue, (f) on the sixth cause of action for replevin, awarding to GCM a judgment of possession of the Collateral; and, (i) awarding to GCM such other and further relief which as to this Court seems just, proper, and equitable. DATED: Albany, New York April 24, 2024 GOLDBERQ'S ALLA, L By ( onathan M. Bernstein, Esq. A tsrneysfor Plaintiff GCM Prime, LLC 8 Southwoods Boulevard, Suite 300 Albany, New York 12211 (518) 463-5400 17 'MANAGE \2073 \ 0004 \40303745.v1-4/24/24 19 of 20 FILED: ALBANY COUNTY CLERK 04/26/2024 11:31 AM INDEX NO. 904032-24 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 04/26/2024 VERIFICATION STATE OF NEW YORK ) SS.: COUNTY OF WESTCHESTER RICHARD GIPSTEIN, being duly sworn, deposes and says as follows: I am a principal of GCM Prime EEC, the plaintiff in the within action. I have read the foregoing Summons and Verified Complaint and know the contents thereof to be true based upon my own knowledge, except as to the matters therein stated to be alleged upon information and belief and as to those matters, I believe them to be true. ./ . I 1.1.. I r • ./ ..../1/A"-i Richard Gipstein Sworn to before me this y day of April, 2024 Notary Public DIANE M. GIPSTEIN Notary Public. State of New York 0201e1.97145. V.:estchester County Commission Expires December 1, 20 IS iManageV2073 \0004V10303745,v1-4/24/24 20 of 20