Preview
FILED: NASSAU COUNTY CLERK 06/18/2024 05:56 PM INDEX NO. 610644/2024
NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 06/18/2024
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NASSAU
----------------------------------------------------------------------X Index No.
THE LCF GROUP, INC.,
SUMMONS
Plaintiff,
-against-
PLAINTIFF’S ADDRESS:
Monahans Donuts LLC d/b/a Monahans Donuts, 3000 Marcus Ave, Suite 2W15
and Christopher Adams, Lake Success, NY 11042
Defendants. Date Purchased:
----------------------------------------------------------------------X
To the above-named defendants:
YOU ARE HEREBY SUMMONED to answer the complaint in this action and to serve
a copy of your answer on the plaintiff’s attorneys within twenty (20) days after service of this
summons, exclusive of the day of service (or within thirty (30) days after service is complete if
this summons is not personally delivered to you within the State of New York). If you fail to appear
or answer, judgment will be taken against you by default for the relief demanded in the complaint.
Plaintiff designates Nassau County as the place of trial, as plaintiff’s principal place of
business is located within the State of New York, County of Nassau. Venue is also proper in
Nassau County based upon the consent to jurisdiction contained within the subject agreement
entered into by and between the parties hereto.
Defendants’ Address(es):
- Monahans Donuts LLC d/b/a Monahans Donuts – 301 West Sealy Avenue, Monahans,
Texas 79756
- Christopher Adams – 301 West Sealy Avenue, Monahans, Texas 79756
Dated: Lake Success, New York The Feldman Law Firm, P.C.
June 18, 2024
By: Adam J. Feldman, Esq.
Attorneys for Plaintiff, c/o The LCF Group, Inc.
3000 Marcus Ave, Suite 2W15, Lake Success, NY 11042
212-244-4422 / ajf@feldmanlegal.com
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SUPREME COURT OF THE STATE OF NEW YORK Index No.
COUNTY OF NASSAU
----------------------------------------------------------------------X VERIFIED COMPLAINT
THE LCF GROUP, INC.,
Plaintiff,
-against-
Monahans Donuts LLC d/b/a Monahans Donuts,
and Christopher Adams,
Defendants. Date Purchased:
----------------------------------------------------------------------X
Plaintiff The LCF Group, Inc. (“LCF”), by its attorneys, The Feldman Law Firm, P.C., as
and for its verified complaint against defendants Monahans Donuts LLC d/b/a Monahans Donuts,
alleges as follows:
PARTIES
1. LCF is a corporation formed and existing under the laws of The State of New York, which
maintains its principal place of business at 3000 Marcus Ave, Suite 2W15, Lake Success, New
York 11042.
2. Upon information and belief, defendant Monahans Donuts LLC d/b/a Monahans Donuts
(“Merchant”) is a Limited Liability Company formed under the laws of one of the States of the
United States, which maintains its principal place of business at 301 West Sealy Avenue,
Monahans, Texas 79756.
3. Upon information and belief, defendant Christopher Adams (“Adams” or “Guarantor”) is
an individual residing and domiciled at 301 West Sealy Avenue, Monahans, Texas 79756.
4. Hereinafter, Merchant and Guarantor shall be collectively referred to as the “Defendants”.
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JURISDICTION AND VENUE
5. This Court has personal jurisdiction over Defendants and subject matter jurisdiction over
this action based upon the consent to jurisdiction contained in Section 3.5 of the subject purchase
and sale of future receivables agreement, which was entered into by and between the parties on
May 6, 2024 (the “Agreement”).
6. Venue is proper under CPLR § 503(a), as LCF maintains its principal place of business in
the State of New York, County of Nassau.
FACTS COMMON TO ALL CAUSES OF ACTION
A. The Merchant Case Advance Industry
7. The Merchant Cash Advance (“MCA”) industry – part of the larger “Fintech” sector – is
an important source of funds for small businesses throughout the United States. Fintech leverages
technological advancements to expand the availability of capital to businesses previously shut out
from conventional banking products after the financial crisis of 2008.
8. Accordingly, businesses that might otherwise be foreclosed from traditional sources of
capital have increasingly turned to the MCA industry as a means of expanding and supporting their
businesses. MCA is not a recourse product – rather, a merchant sells a percentage of its future
receivables at a discounted present value. The MCA funder typically recovers the percentage of
receivables it purchases from a small business through regular ACH debits from a small business’
bank account, which, initially, is estimated as a percentage of average revenues prior to the
funding.
9. The dollar amount tied to such percentage is adjustable upon a merchant’s request, and a
reduction in a merchant’s revenues directly correlates to a reduction in remittances. As a result,
the length of time for the MCA funder to receive its percentage of future sales is indefinite. For
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example, assuming a purchased percentage of 15% of daily sales, if a merchant’s daily revenues
were averaging $100.00, the MCA funder would be entitled to receive $15.00 ($100.00 x 0.15 =
$15.00). If those revenues were to drop to $10.00, the MCA funder would be entitled to receive
$1.50 ($10.00 x 0.15 = $1.50).
10. To safeguard against remittances in excess of the agreed upon percentage of daily sales,
LCF’s standard purchase and sale of future receivables agreement (“PSFRA”), like the subject
Agreement here, contains a reconciliation provision, which invites a merchant to document its
monthly sales in order to ensure that monthly remittances to LCF do not exceed 17% of revenues,
and remittances in excess of the purchased percentage are returned to the merchant.
11. Moreover, a cessation of business operations, bankruptcy, or other insolvency does not
constitute an event of default under LCF’s standard PSFRA. Instead, LCF’s form PSFRA clearly
provides, that so long as a merchant complies with the contract’s notification requirements, LCF’s
recovery of purchased receivables from said merchant can extend indefinitely and, in the event of
a cessation of business operations, may never occur at all.
B. The Agreement
12. On May 6, 2024, LCF and Merchant entered into the Agreement, whereby Merchant sold
LCF $26,820.00 (“Purchased Amount”) of Merchant’s accounts, contract rights, and other
obligations arising from or relating to the payment of monies from Merchant’s customers and other
third party payors (“Receivables”) for the sum of $18,000.00 (less certain scheduled and agreed-
upon fees) (“Purchase Price”), to be paid by the Merchant to LCF from 17% of Merchant’s daily
revenue.
13. The Agreement provides that LCF will receive the Purchased Amount of Merchant’s future
receivables via a daily ACH debit of 17% of Merchant’s daily receipts and estimated that amount
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as a true and accurate estimate of the purchased percentage of sales based upon Defendants’
representations to LCF.
14. Paragraph 1.10 of the Agreement provides for the “Sale of Receipts”. This provision
clearly specifies that no interest rate, payment schedule, or time period is applicable to the
Agreement and that a bankruptcy filing or cessation of the Merchant’s business would not
constitute an event of default.
15. Paragraph 1.10 of the Agreement further elaborates that the contemplated transaction is not
a lending transaction and that the Merchant is not borrowing money. Rather, the contract specifies
that a portion of the Merchant’s future receivables is being purchased.
16. Pursuant to paragraph 1.4 of the Agreement, Defendants were entitled to request a monthly
reconciliation to ensure that the Merchant’s monthly remittances did not exceed 17% of its
revenues.
17. Defendants have not sought to reconcile any remittances made or due to LCF.
18. As contemplated under paragraph 1.13 of the Agreement, a Merchant defaults, inter alia,
by:
a. blocking LCF’s access to the designated bank account (the “Designated Account”)
from which Merchant agreed to permit LCF to withdraw the purchased
Receivables;
b. failing to respond to communications initiated by LCF concerning any dishonor of
any ACH debit initiated by LCF for a period exceeding 72 hours;
c. failing to provide LCF with any requested bank or financial statements within three
business days of such a request, and/or;
d. depositing Receivables into a bank account other than the Designated Account.
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19. Notably, non-payment is not defined as an event of default.
20. Accordingly, so long as Merchant complied with the terms of performance under the
Agreement, LCF would not be entitled to any remedy.
21. Defendants, prior to Merchant’s default, failed to utilize the various safeguards and
guardrails available to them under the Agreement.
C. The Guaranty
22. By virtue of a personal guaranty of performance executed by Adams on or about May 6,
2024 (the “Personal Performance Guaranty”), Adams is Merchant’s personal performance
guarantor and, as a result of the Merchant’s default in performance under the Agreement, is
personally liable for the obligations Merchant owed to LCF.
23. Under the aforesaid Personal Performance Guaranty, Adams guaranteed the performance
of Merchant to LCF without reservation or defense.
AS AND FOR A FIRST CAUSE OF ACTION
24. Merchant agreed that in the event of its default under the Agreement, the full uncollected
Purchased Amount plus all fees due under the Agreement would become immediately due and
payable in full to LCF less payments on account.
25. LCF paid Merchant the Purchase Price, as provided in the Agreement and applicable fee
schedules therein, and has fully performed its obligations to Defendants under the Agreement.
26. Merchant, despite continuing to operate, breached the Agreement by defaulting on its
performance obligations, representations, and warranties to LCF.
27. On or about June 4, 2024, Merchant breached its obligations under the Agreement by
frustrating LCF’s access to draw upon its Specified Percentage of receivables by access to the
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account being restricted due to a specific action taken by merchant (R16) 1 Additionally, Merchant
failed to meet its obligations under Section 1.13 of the Agreement.
28. As a result, LCF has not received the full Purchased Amount of Receivables from
Merchant.
29. Merchant was credited with $10,258.49 via payments and/or the application of unexpended
funds to its balance and therefore owes LCF $16,561.51 of the Purchased Amount under the
Agreement.
30. Merchant also owes LCF $2,675 for default and nonsufficient funds fees (“NSF”) pursuant
to the Agreement.
31. By reason of the foregoing, LCF has been damaged by Merchant’s breach of the Agreement
in the sum of $19,236.51 with interest thereon from June 4, 2024.
32. LCF is entitled to judgment in the amount of $19,236.51 with interest thereon from June
4, 2024, together with such other and further relief as this Court deems just and proper.
AS AND FOR A SECOND CAUSE OF ACTION
33. LCF repeats and realleges each and every allegation set forth in the preceding paragraphs
as if set forth fully herein.
34. Under Paragraph 1.14 of the Agreement, Merchant agreed to pay LCF’s reasonable
attorneys’ fees in the event of default. The parties agreed that reasonable attorneys’ fees would be
liquidated as 33.33% of the Purchased Amount balance outstanding upon the occurrence of an
event of default.
35. Accordingly, pursuant to the Agreement, Merchant owes LCF $5,519.95 as liquidated
damages and not as a penalty.
1
See Generally https://www.actumprocessing.com/understanding-ach-return-codes/
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36. LCF is entitled to judgment against Merchant in the amount of $5,519.95, together with
such other and further relief as this Court deems just and proper.
AS AND FOR A THIRD CAUSE OF ACTION
37. LCF repeats and realleges each and every allegation set forth in the preceding paragraphs
as if set forth fully herein.
38. Guarantors executed guarantees of performance of all the representations, warranties, and
covenants made by Merchant under the Agreement.
39. By reason of those guarantees, Guarantors are obligated to LCF in the sum of $19,236.51.
AS AND FOR A FOURTH CAUSE OF ACTION
40. LCF repeats and realleges each and every allegation set forth in the preceding paragraphs
as if set forth fully herein.
41. By reason of the guarantees, Guarantors are obligated to pay LCF’s reasonable attorneys’
fees. The parties agreed that reasonable attorneys’ fees would be liquidated as 33.33% of the
Purchased Amount balance outstanding upon the occurrence of an event of default by Merchant.
42. Accordingly, Guarantors owe LCF $5,519.95 as liquidated damages and not as a penalty.
43. LCF is entitled to judgment against Guarantors in the amount of $5,519.95, together with
such other and further relief as this Court deems just and proper.
WHEREFORE, LCF demands judgment in the amount of:
1) $19,236.51 against Merchant upon the first cause of action;
2) $5,519.95 against Merchant upon the second cause of action;
3) $19,236.51 against Guarantors upon the third cause of action;
4) $5,519.95 against Guarantors upon the fourth cause of action; and
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5) Statutory interest from June 4, 2024, costs, and disbursements upon all causes of action,
together with such other and further relief as this Court deems just and proper.
Dated: Lake Success, New York
June 18, 2024
The Feldman Law Firm, P.C.
By: Adam J. Feldman, Esq.
Attorneys for PLAINTIFF, C/O The LCF Group
3000 Marcus Ave, Suite 2W15, Lake Success, NY 11042
212-244-4422 / ajf@feldmanlegal.com
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SUPREME COURT OF THE STATE OF NEW YORK Index No.
COUNTY OF NASSAU
----------------------------------------------------------------------X VERIFICATION
THE LCF GROUP, INC.,
Plaintiff,
-against-
Monahans Donuts LLC d/b/a Monahans Donuts,
and Christopher Adams,
Defendants.
----------------------------------------------------------------------X
STATE OF NEW YORK }
} ss:
COUNTY OF NASSAU }
ROBERT KLEIBER, being duly sworn, deposes, and says:
I am the Chief Operating Officer and Chief Financial Officer for the plaintiff in this action,
The LCF Group, Inc., and I have read the within Verified Complaint and know the contents thereof
to be true to my own knowledge, with the exception of those matters therein stated to be alleged
upon information and belief, and as to those matters, I believe them to be true.
So sworn before me on
June 18, 2024
______________________
Notary Public Robert Kleiber
Adam Jason Feldman, Notary Public
State of New York
No. 02FE6001199
Qualified in Nassau County
Commission Expires 01/05/2026
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SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NASSAU
-----------------------------------------------------------------------x
THE LCF GROUP, INC.,
Plaintiff,
Index No.
-against-
Monahans Donuts LLC d/b/a Monahans Donuts,
and Christopher Adams,
Defendants.
-----------------------------------------------------------------------x
NOTICE OF ELECTRONIC FILING
(Consensual Case)
(Uniform Rule § 202.5-b)
You have received this Notice because:
1) The Plaintiff/Petitioner, whose name is listed above, has filed this case using the New
York State Courts E-filing system (“NYSCEF”), and
2) You are a Defendant/Respondent (a party) in this case.
If you are represented by an attorney:
Give this Notice to your attorney. (Attorneys: see “Information for Attorneys” pg.2).
If you are not represented by an attorney:
You will be served with all documents in paper and you must serve and file your
documents in paper, unless you choose to participate in e-filing.
If you choose to participate in e-filing, you must have access to a computer and a
scanner or other devise to convert documents into electronic format, a connection to the
internet, and an e-mail address to receive service of documents.
The benefits of participating in e-filing include:
serving and filing your documents electronically
free access to view and print your e-filed documents
limiting your number of trips to the courthouse
paying any court fees on-line (credit card needed)
To register for e-filing or for more information about how e-filing works:
visit: www.nycourts.gov/efile-unrepresented or
contact the Clerk’s Office or Help Center at the court where the case was filed. Court contact
information can be found at www.nycourts.gov
To find legal information to help you represent yourself visit www.nycourthelp.gov
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Information for Attorneys
An attorney representing a party who is served with this notice must either consent or decline to
electronic filing and service through NYSCEF for this case.
Attorneys registered with NYSCEF may record their consent electronically in the manner
provided at the NYSCEF site. Attorneys not registered with NYSCEF but intending to
participate in e-filing must first create a NYSCEF account and obtain a user ID and password
prior to recording their consent by going to www.nycourts.gov/efile
Attorneys declining to consent must file with the court and serve on all parties of record a
declination of consent.
For additional information about electronic filing and to create a NYSCEF account, visit the
NYSCEF website at www.nycourts.gov/efile or contact the NYSCEF Resource Center (phone:
646-386-3033; e-mail: efile@nycourts.gov).
Dated: June 18, 2024
3000 Marcus Ave #2W15
Adam J. Feldman Lake Success, NY 11042
Name Address
The Feldman Law Firm, P.C. 212.244.4422
Firm Name Phone
ajf@feldmanlegal.com
E-Mail
To: Monahans Donuts LLC d/b/a Monahans Donuts
301 West Sealy Avenue, Monahans, Texas 79756
Christopher Adams
301 West Sealy Avenue, Monahans, Texas 79756
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Preview
FILED: NASSAU COUNTY CLERK 06/18/2024 05:56 PM INDEX NO. 610644/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 06/18/2024 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NASSAU ----------------------------------------------------------------------X Index No. THE LCF GROUP, INC., SUMMONS Plaintiff, -against- PLAINTIFF’S ADDRESS: Monahans Donuts LLC d/b/a Monahans Donuts, 3000 Marcus Ave, Suite 2W15 and Christopher Adams, Lake Success, NY 11042 Defendants. Date Purchased: ----------------------------------------------------------------------X To the above-named defendants: YOU ARE HEREBY SUMMONED to answer the complaint in this action and to serve a copy of your answer on the plaintiff’s attorneys within twenty (20) days after service of this summons, exclusive of the day of service (or within thirty (30) days after service is complete if this summons is not personally delivered to you within the State of New York). If you fail to appear or answer, judgment will be taken against you by default for the relief demanded in the complaint. Plaintiff designates Nassau County as the place of trial, as plaintiff’s principal place of business is located within the State of New York, County of Nassau. Venue is also proper in Nassau County based upon the consent to jurisdiction contained within the subject agreement entered into by and between the parties hereto. Defendants’ Address(es): - Monahans Donuts LLC d/b/a Monahans Donuts – 301 West Sealy Avenue, Monahans, Texas 79756 - Christopher Adams – 301 West Sealy Avenue, Monahans, Texas 79756 Dated: Lake Success, New York The Feldman Law Firm, P.C. June 18, 2024 By: Adam J. Feldman, Esq. Attorneys for Plaintiff, c/o The LCF Group, Inc. 3000 Marcus Ave, Suite 2W15, Lake Success, NY 11042 212-244-4422 / ajf@feldmanlegal.com 1 of 12 FILED: NASSAU COUNTY CLERK 06/18/2024 05:56 PM INDEX NO. 610644/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 06/18/2024 SUPREME COURT OF THE STATE OF NEW YORK Index No. COUNTY OF NASSAU ----------------------------------------------------------------------X VERIFIED COMPLAINT THE LCF GROUP, INC., Plaintiff, -against- Monahans Donuts LLC d/b/a Monahans Donuts, and Christopher Adams, Defendants. Date Purchased: ----------------------------------------------------------------------X Plaintiff The LCF Group, Inc. (“LCF”), by its attorneys, The Feldman Law Firm, P.C., as and for its verified complaint against defendants Monahans Donuts LLC d/b/a Monahans Donuts, alleges as follows: PARTIES 1. LCF is a corporation formed and existing under the laws of The State of New York, which maintains its principal place of business at 3000 Marcus Ave, Suite 2W15, Lake Success, New York 11042. 2. Upon information and belief, defendant Monahans Donuts LLC d/b/a Monahans Donuts (“Merchant”) is a Limited Liability Company formed under the laws of one of the States of the United States, which maintains its principal place of business at 301 West Sealy Avenue, Monahans, Texas 79756. 3. Upon information and belief, defendant Christopher Adams (“Adams” or “Guarantor”) is an individual residing and domiciled at 301 West Sealy Avenue, Monahans, Texas 79756. 4. Hereinafter, Merchant and Guarantor shall be collectively referred to as the “Defendants”. 2 of 12 FILED: NASSAU COUNTY CLERK 06/18/2024 05:56 PM INDEX NO. 610644/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 06/18/2024 JURISDICTION AND VENUE 5. This Court has personal jurisdiction over Defendants and subject matter jurisdiction over this action based upon the consent to jurisdiction contained in Section 3.5 of the subject purchase and sale of future receivables agreement, which was entered into by and between the parties on May 6, 2024 (the “Agreement”). 6. Venue is proper under CPLR § 503(a), as LCF maintains its principal place of business in the State of New York, County of Nassau. FACTS COMMON TO ALL CAUSES OF ACTION A. The Merchant Case Advance Industry 7. The Merchant Cash Advance (“MCA”) industry – part of the larger “Fintech” sector – is an important source of funds for small businesses throughout the United States. Fintech leverages technological advancements to expand the availability of capital to businesses previously shut out from conventional banking products after the financial crisis of 2008. 8. Accordingly, businesses that might otherwise be foreclosed from traditional sources of capital have increasingly turned to the MCA industry as a means of expanding and supporting their businesses. MCA is not a recourse product – rather, a merchant sells a percentage of its future receivables at a discounted present value. The MCA funder typically recovers the percentage of receivables it purchases from a small business through regular ACH debits from a small business’ bank account, which, initially, is estimated as a percentage of average revenues prior to the funding. 9. The dollar amount tied to such percentage is adjustable upon a merchant’s request, and a reduction in a merchant’s revenues directly correlates to a reduction in remittances. As a result, the length of time for the MCA funder to receive its percentage of future sales is indefinite. For 3 of 12 FILED: NASSAU COUNTY CLERK 06/18/2024 05:56 PM INDEX NO. 610644/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 06/18/2024 example, assuming a purchased percentage of 15% of daily sales, if a merchant’s daily revenues were averaging $100.00, the MCA funder would be entitled to receive $15.00 ($100.00 x 0.15 = $15.00). If those revenues were to drop to $10.00, the MCA funder would be entitled to receive $1.50 ($10.00 x 0.15 = $1.50). 10. To safeguard against remittances in excess of the agreed upon percentage of daily sales, LCF’s standard purchase and sale of future receivables agreement (“PSFRA”), like the subject Agreement here, contains a reconciliation provision, which invites a merchant to document its monthly sales in order to ensure that monthly remittances to LCF do not exceed 17% of revenues, and remittances in excess of the purchased percentage are returned to the merchant. 11. Moreover, a cessation of business operations, bankruptcy, or other insolvency does not constitute an event of default under LCF’s standard PSFRA. Instead, LCF’s form PSFRA clearly provides, that so long as a merchant complies with the contract’s notification requirements, LCF’s recovery of purchased receivables from said merchant can extend indefinitely and, in the event of a cessation of business operations, may never occur at all. B. The Agreement 12. On May 6, 2024, LCF and Merchant entered into the Agreement, whereby Merchant sold LCF $26,820.00 (“Purchased Amount”) of Merchant’s accounts, contract rights, and other obligations arising from or relating to the payment of monies from Merchant’s customers and other third party payors (“Receivables”) for the sum of $18,000.00 (less certain scheduled and agreed- upon fees) (“Purchase Price”), to be paid by the Merchant to LCF from 17% of Merchant’s daily revenue. 13. The Agreement provides that LCF will receive the Purchased Amount of Merchant’s future receivables via a daily ACH debit of 17% of Merchant’s daily receipts and estimated that amount 4 of 12 FILED: NASSAU COUNTY CLERK 06/18/2024 05:56 PM INDEX NO. 610644/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 06/18/2024 as a true and accurate estimate of the purchased percentage of sales based upon Defendants’ representations to LCF. 14. Paragraph 1.10 of the Agreement provides for the “Sale of Receipts”. This provision clearly specifies that no interest rate, payment schedule, or time period is applicable to the Agreement and that a bankruptcy filing or cessation of the Merchant’s business would not constitute an event of default. 15. Paragraph 1.10 of the Agreement further elaborates that the contemplated transaction is not a lending transaction and that the Merchant is not borrowing money. Rather, the contract specifies that a portion of the Merchant’s future receivables is being purchased. 16. Pursuant to paragraph 1.4 of the Agreement, Defendants were entitled to request a monthly reconciliation to ensure that the Merchant’s monthly remittances did not exceed 17% of its revenues. 17. Defendants have not sought to reconcile any remittances made or due to LCF. 18. As contemplated under paragraph 1.13 of the Agreement, a Merchant defaults, inter alia, by: a. blocking LCF’s access to the designated bank account (the “Designated Account”) from which Merchant agreed to permit LCF to withdraw the purchased Receivables; b. failing to respond to communications initiated by LCF concerning any dishonor of any ACH debit initiated by LCF for a period exceeding 72 hours; c. failing to provide LCF with any requested bank or financial statements within three business days of such a request, and/or; d. depositing Receivables into a bank account other than the Designated Account. 5 of 12 FILED: NASSAU COUNTY CLERK 06/18/2024 05:56 PM INDEX NO. 610644/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 06/18/2024 19. Notably, non-payment is not defined as an event of default. 20. Accordingly, so long as Merchant complied with the terms of performance under the Agreement, LCF would not be entitled to any remedy. 21. Defendants, prior to Merchant’s default, failed to utilize the various safeguards and guardrails available to them under the Agreement. C. The Guaranty 22. By virtue of a personal guaranty of performance executed by Adams on or about May 6, 2024 (the “Personal Performance Guaranty”), Adams is Merchant’s personal performance guarantor and, as a result of the Merchant’s default in performance under the Agreement, is personally liable for the obligations Merchant owed to LCF. 23. Under the aforesaid Personal Performance Guaranty, Adams guaranteed the performance of Merchant to LCF without reservation or defense. AS AND FOR A FIRST CAUSE OF ACTION 24. Merchant agreed that in the event of its default under the Agreement, the full uncollected Purchased Amount plus all fees due under the Agreement would become immediately due and payable in full to LCF less payments on account. 25. LCF paid Merchant the Purchase Price, as provided in the Agreement and applicable fee schedules therein, and has fully performed its obligations to Defendants under the Agreement. 26. Merchant, despite continuing to operate, breached the Agreement by defaulting on its performance obligations, representations, and warranties to LCF. 27. On or about June 4, 2024, Merchant breached its obligations under the Agreement by frustrating LCF’s access to draw upon its Specified Percentage of receivables by access to the 6 of 12 FILED: NASSAU COUNTY CLERK 06/18/2024 05:56 PM INDEX NO. 610644/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 06/18/2024 account being restricted due to a specific action taken by merchant (R16) 1 Additionally, Merchant failed to meet its obligations under Section 1.13 of the Agreement. 28. As a result, LCF has not received the full Purchased Amount of Receivables from Merchant. 29. Merchant was credited with $10,258.49 via payments and/or the application of unexpended funds to its balance and therefore owes LCF $16,561.51 of the Purchased Amount under the Agreement. 30. Merchant also owes LCF $2,675 for default and nonsufficient funds fees (“NSF”) pursuant to the Agreement. 31. By reason of the foregoing, LCF has been damaged by Merchant’s breach of the Agreement in the sum of $19,236.51 with interest thereon from June 4, 2024. 32. LCF is entitled to judgment in the amount of $19,236.51 with interest thereon from June 4, 2024, together with such other and further relief as this Court deems just and proper. AS AND FOR A SECOND CAUSE OF ACTION 33. LCF repeats and realleges each and every allegation set forth in the preceding paragraphs as if set forth fully herein. 34. Under Paragraph 1.14 of the Agreement, Merchant agreed to pay LCF’s reasonable attorneys’ fees in the event of default. The parties agreed that reasonable attorneys’ fees would be liquidated as 33.33% of the Purchased Amount balance outstanding upon the occurrence of an event of default. 35. Accordingly, pursuant to the Agreement, Merchant owes LCF $5,519.95 as liquidated damages and not as a penalty. 1 See Generally https://www.actumprocessing.com/understanding-ach-return-codes/ 7 of 12 FILED: NASSAU COUNTY CLERK 06/18/2024 05:56 PM INDEX NO. 610644/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 06/18/2024 36. LCF is entitled to judgment against Merchant in the amount of $5,519.95, together with such other and further relief as this Court deems just and proper. AS AND FOR A THIRD CAUSE OF ACTION 37. LCF repeats and realleges each and every allegation set forth in the preceding paragraphs as if set forth fully herein. 38. Guarantors executed guarantees of performance of all the representations, warranties, and covenants made by Merchant under the Agreement. 39. By reason of those guarantees, Guarantors are obligated to LCF in the sum of $19,236.51. AS AND FOR A FOURTH CAUSE OF ACTION 40. LCF repeats and realleges each and every allegation set forth in the preceding paragraphs as if set forth fully herein. 41. By reason of the guarantees, Guarantors are obligated to pay LCF’s reasonable attorneys’ fees. The parties agreed that reasonable attorneys’ fees would be liquidated as 33.33% of the Purchased Amount balance outstanding upon the occurrence of an event of default by Merchant. 42. Accordingly, Guarantors owe LCF $5,519.95 as liquidated damages and not as a penalty. 43. LCF is entitled to judgment against Guarantors in the amount of $5,519.95, together with such other and further relief as this Court deems just and proper. WHEREFORE, LCF demands judgment in the amount of: 1) $19,236.51 against Merchant upon the first cause of action; 2) $5,519.95 against Merchant upon the second cause of action; 3) $19,236.51 against Guarantors upon the third cause of action; 4) $5,519.95 against Guarantors upon the fourth cause of action; and 8 of 12 FILED: NASSAU COUNTY CLERK 06/18/2024 05:56 PM INDEX NO. 610644/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 06/18/2024 5) Statutory interest from June 4, 2024, costs, and disbursements upon all causes of action, together with such other and further relief as this Court deems just and proper. Dated: Lake Success, New York June 18, 2024 The Feldman Law Firm, P.C. By: Adam J. Feldman, Esq. Attorneys for PLAINTIFF, C/O The LCF Group 3000 Marcus Ave, Suite 2W15, Lake Success, NY 11042 212-244-4422 / ajf@feldmanlegal.com 9 of 12 FILED: NASSAU COUNTY CLERK 06/18/2024 05:56 PM INDEX NO. 610644/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 06/18/2024 SUPREME COURT OF THE STATE OF NEW YORK Index No. COUNTY OF NASSAU ----------------------------------------------------------------------X VERIFICATION THE LCF GROUP, INC., Plaintiff, -against- Monahans Donuts LLC d/b/a Monahans Donuts, and Christopher Adams, Defendants. ----------------------------------------------------------------------X STATE OF NEW YORK } } ss: COUNTY OF NASSAU } ROBERT KLEIBER, being duly sworn, deposes, and says: I am the Chief Operating Officer and Chief Financial Officer for the plaintiff in this action, The LCF Group, Inc., and I have read the within Verified Complaint and know the contents thereof to be true to my own knowledge, with the exception of those matters therein stated to be alleged upon information and belief, and as to those matters, I believe them to be true. So sworn before me on June 18, 2024 ______________________ Notary Public Robert Kleiber Adam Jason Feldman, Notary Public State of New York No. 02FE6001199 Qualified in Nassau County Commission Expires 01/05/2026 10 of 12 FILED: NASSAU COUNTY CLERK 06/18/2024 05:56 PM INDEX NO. 610644/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 06/18/2024 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NASSAU -----------------------------------------------------------------------x THE LCF GROUP, INC., Plaintiff, Index No. -against- Monahans Donuts LLC d/b/a Monahans Donuts, and Christopher Adams, Defendants. -----------------------------------------------------------------------x NOTICE OF ELECTRONIC FILING (Consensual Case) (Uniform Rule § 202.5-b) You have received this Notice because: 1) The Plaintiff/Petitioner, whose name is listed above, has filed this case using the New York State Courts E-filing system (“NYSCEF”), and 2) You are a Defendant/Respondent (a party) in this case. If you are represented by an attorney: Give this Notice to your attorney. (Attorneys: see “Information for Attorneys” pg.2). If you are not represented by an attorney: You will be served with all documents in paper and you must serve and file your documents in paper, unless you choose to participate in e-filing. If you choose to participate in e-filing, you must have access to a computer and a scanner or other devise to convert documents into electronic format, a connection to the internet, and an e-mail address to receive service of documents. The benefits of participating in e-filing include: serving and filing your documents electronically free access to view and print your e-filed documents limiting your number of trips to the courthouse paying any court fees on-line (credit card needed) To register for e-filing or for more information about how e-filing works: visit: www.nycourts.gov/efile-unrepresented or contact the Clerk’s Office or Help Center at the court where the case was filed. Court contact information can be found at www.nycourts.gov To find legal information to help you represent yourself visit www.nycourthelp.gov 11 of 12 FILED: NASSAU COUNTY CLERK 06/18/2024 05:56 PM INDEX NO. 610644/2024 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 06/18/2024 Information for Attorneys An attorney representing a party who is served with this notice must either consent or decline to electronic filing and service through NYSCEF for this case. Attorneys registered with NYSCEF may record their consent electronically in the manner provided at the NYSCEF site. Attorneys not registered with NYSCEF but intending to participate in e-filing must first create a NYSCEF account and obtain a user ID and password prior to recording their consent by going to www.nycourts.gov/efile Attorneys declining to consent must file with the court and serve on all parties of record a declination of consent. For additional information about electronic filing and to create a NYSCEF account, visit the NYSCEF website at www.nycourts.gov/efile or contact the NYSCEF Resource Center (phone: 646-386-3033; e-mail: efile@nycourts.gov). Dated: June 18, 2024 3000 Marcus Ave #2W15 Adam J. Feldman Lake Success, NY 11042 Name Address The Feldman Law Firm, P.C. 212.244.4422 Firm Name Phone ajf@feldmanlegal.com E-Mail To: Monahans Donuts LLC d/b/a Monahans Donuts 301 West Sealy Avenue, Monahans, Texas 79756 Christopher Adams 301 West Sealy Avenue, Monahans, Texas 79756 12 of 12