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MARK E. CONSTANTINE, ESQ.
106 NORTH BROADWAY
IRVINGTON, NEW YORK 10533
PHONE (914) 631-0410 FAX (914) 631-0440
February 26, 2019
VIA E-FILE
Supreme Court of the State of New York
Westchester County
111 Martin Luther King Jr,Boulevard
White Plains, New York 10601
Attn..: Hon. Lawrence Ecker, JSC
Re: CDC v. AIP, et al,Index No.: 51573-2015
Compliance with So Ordered Stipulation re CDC Surety Bond
Your Honour:
Greetings. I write in response to CDC's counsel's letter dated February 25, 2019
in the above referenced matter and to raise some important points. At the outset AIP and
its counsel acknowledge CDC's counsel's efforts to structure and obtain a proper Bond
pursuant to the so ordered stipulation. However, what has been presented to date does not
serve that purpose for the following important reasons.
- is the deadline for CDC to put the proper Bond in place.
Today
- CDC has known about its need to to post such a Bond since at least the
end of January 2019.
- AIP has been and continues to be and able to fund such an
ready, willing
appropriate Bond from the security deposit held in my escrow account.
- For the firsttime on 2019 at 1030 am the Bond and Invoice
February 22,
dated February 20, 2019 (exhibit "A") were forwarded to the undersigned to commence
the 48 hour review pursuant to the so ordered stipulation (exhibit "B").
- AIP's review and diligence to take place on
Thereby requiring
non-business days. This was done and ATP's valid concerns were communicated to CDC
in a timely maññct on February 24, 2019 only two (2) days before the deadline.
- In addition to the general and lack of of the
informality particularity
proposed Bond dated February 20, 2019 AIP also noted that the language afterthe words
of"
"reason istoo narrow as, pursuant to the so ordered stipubtion, the bond must pay to
cover any damages awarded to AIP as a result of the captioned lawsuit in addition to any
damages resulting if CDC's TRO is ultimately deemed wrongful. The Bond presented
does not satisfy that requirement.
- "statute"
Additionally, AIP has requested a specific reference to the
referred to in the bond as the Surety is limiting their liabilityto the provisions of same. It
is undeniable that there is no way to evaluate the propriety of this proposed Surety
without being clear on itsterms including the Statute in question.
- One other concern is the duration of the Bond as the invoice you
Surety by
provided itappears that itis only valid for one year until February 2020. The Court will
please recall that CDC has repeatedly maintained that: "according to CDC's appellate
counsel it will take two (2) years to complete the appeal process". Accordingly, by
CDC's own admission the Bond should be in place for a minimum of two (2) years. Of
course, AIP is prepared to advance the premium for both years from the security deposit
ifa proper two (2) year Bond is put in place.
- the Court will please recallthat thepurpose of the so ordered stipulation
Lastly,
is toprovide both parties a readily accessible source to satisfyany judgment in theirfavor. While
CDC will have the protection of $600,000.00 in escrow to be released upon court order AIP will
have to contend with a thirdparty surety that can and will likelytake steps to avoid or minimize
itsobligation to pay. Accordingly, itis necessary for AIP to see the ultimate Bond issued by the
surety to be sure that itcontains the broadest language possible.
It is respectfully submitted that the form submitted by CDC is not the ultimate
Bond that Traveler's Insurance Company will issue.
Notwithstanding the foregoing, AIP and the undersigned stand ready willing and
able to fund the appropriate Bond in accordance with the so ordered stipulation.
However, as in every matter before the Court, there must be finality herein so the parties
and this matter can move on to a conclusion on themerits. Thank you for your continued
thoughtful consideration in this regard.
Very truly yours,
Mark E. Constantine, Esq.
cc: John Blumenstock, Esq., Via efile
EXHIBIT A
..
SUPREME COURT
OF THE STATE OF NEW YORK
COUNTY OF WESTCHESTER
CDC DEVELOPMENT PROPERTIES, INC
BOND NO. 107049621
Plaintiffs,
-against- INDEXNO. 51 573 /2015
TEMBORARY UNDERTAKING
AMERICAN INDEPENDENT PAPER MILLS SUPPLY ON SO-ORDERED STIPULATION
CO. , INC. ,
. .
Defendants,
the CDC DEVELOPMENT PROPERTIES, INc
WHEREAS, Plaintiffs, have
applied for a TEMPORARY RESTRAINING ORDER in the above entitled action, restraining the
Defendants, ATnM can Tndanandant Paper W11m mmniv On . Tn e frOM doing
things as more fully set forth iå the order about to be signed
therefore Travelers Casualty and Surety Company of America
Now,
an office and principal place of business for the State of CONNECTICUT , at
having
One Tower Square Hartford, CT 06183 as does
Surety, hereby,
pursuant to the Statute in such case made and provided, undertake that the Plaintiff, willpay to the
Defendants, American Tndepen rl an tPaper Mills Rupply Co.. Tnc.
so enjoined, such damages and costs not exceeding the sum of $200,000.00 Two Hundred Thousand
( )
DOLLARS as Defendants sustain reason of so-ordered stipulation the
may by , if Court shall
finally decide that the Plaintiffs were not entitled thereto; such damages and costs to be ascertained by
.a reference, or otherwise as the Court may direct.
Dated: February 20, 2019 Travelers Casualtyand Surety Company of America
. .
By:
Angela Chiodo Attorney-In-Fact
Producer Name
(RequiredinArizonaOnly)
Duffy & Posillico Agency, Inc.
1 Birchwood Court, Suite 1L Amount Paid
P.O. Box 749
INVOICE #47165
Mineela, NY 11501-0749
Account Number . InvoiceDate
Phone: (516) 741-3730
Fax: (516) 741-6311 GALLKLA-01 2/20/2019
E-mail: boñds@daffybc,ñds.com
Gallo Klar LLP Remit To:
John U.H. Blu==etock Duffy & PosillicoAgency, Inc.
Bridge Suite 140 ***PAYMENTS TO***
One Street,
Irvington, NY 10533 660 College Road
Farmiñgville, NY 11738
Invoice#: 47165 Date Paid: Check #: Amount Paid:
Client:.CDC Development Inc
Porperties, . Policy#: 107049621-TRO 2/20/2019
Effective: to 2/20/2Ò20
Company: USF&G-StPaul-Travelers
Item # Trans EffDate Due Date Trans Description Amount
93120 2/20/2019 3/7/2019 NEWB $200,000.Undertaking on Temp TRO S 4,000. 00
Anniversaryp-±r remains due and payable
untilproperdischargeevidenceis furnished,
Any questions,please call
our office.
Thank you.
TotalInvoiceBalance: $4 , 000. 00
2/20/2019
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EXHIBIT B
FILED : WESTCHESTER COUNTY CLERK 02/ O 6/ 2019 11:37 W INDEX ÑO. 51573/2015
NYSCEF DGiC. NO. 374 RECEIVED NYSCEF: 02/06/2019
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF WESTCHESTER
..----.-------X
CDC DEVELOPMENT PROPERTIES, INC.,
Plaintiff, Index No.: 51573/2015
- against -
SO-ORDERED
AMERICAN INDEPENDENT PAPER MILLS SUPPLY STIPULATION
CO., INC.,
Defendant,
----X
WHEREAS, plaintiff CDC DEVELOPMENT PROPERTIES, INC. ("CDC'i) having
moved this Court by Order to Show Cause dated December 21, 2018, for an Order enjêining the
ddaadant AMERICAN INDEPENDENT PAPER MILLS SUPPLY CO., INC. ("A.I.P.") from
selling itsreal property at 15 South Depot Plaza, Tarrytown, New York, until such time as the
above entitled action may be tried and judgment entered; and
WHEREAS, defendant A.I.P. having opposed said motion, and having cross-moved for
an Order ejoining either plaintiff CDC or itsprincipal and lease guarantor, Kevin Khostewshahi
from selling or tansfming any real property, until the final disposition of this matter; and
WHEREAS, plaintiff CDC having submitted papers appasing the cross-motion, and
defandant A.I.P. having submitted further papers, and said setics and cross-motion having come
on tobe heard on January 16, 2019; and
WHEREAS, the parties are desircue of resolving theirmonen and cross-metier, they
have stipulated and agreed, and
WHEREAS, the Court is aware of said stipulation and agreement, itis
ORDERED: that the Taparary Restraining Order contained within theOrderto‰w
Cause dated December 21, 2018, enjoining defendant from selling realty located at 15 South
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(F ILED : W STCHESTER COUNTY CLERK 02/06/2019 11:37 M INDEX NO. 51573/2015
NYSCEF DP NO . 374 . . RECEIVED NYSCEF: 02/ O6 / 2 0 19
Depot Plaza, Tarrytown, New York, iscontiñüéd, except that defendant A.I.P. may sell the
property located at 15 South Depot Plaza, Tarrytown, New Vork, provided six hundred thousand
dollars ($600,000.00) of the proceeds of sale are paid directly to Mark E. Constantine, Esq.,
defendant's attorney of record, as escrow agent, said funds to be held in escrow pending further
order of the Court; and itis e4 20
ORDERED: that withi
CDC (or itsguarantor, Kevin Khosrowshahi) shall post a surety bond in
the scst of two hundred thousand dollars ($200,000.00) in favor of defendant A.I.P., pending
further order of the.Court; and itis
OkDERED: upon demand and presentation of the Bond offering terms to
A.I.P,'s attorney of record, to enable him to determine if said Bond will be for the approprists .
. .
amount ($200,000.00) and has the appropriate beneficiary (A.I.P.), the plainti+Y CDC's (or it
guarantar's) surety bond shall be paid directly to the issuer of the Bond ut of the plainMtenant
CDC's security deposit currently held in Mr. Constantine's escrow account, up to the mount of
seven thousand five hundred ($7,500.00) dollars subject to reallocation; and itis .
Q4Lean-. fa#) olw ya
ORDERED: that.after exp on of as above mentioned, ifplaintiff CDC
(or itsguarantor) has not posted a surety bond for two hundred thousand dollars ($200,000.00),
the sum held in escrow by defendent's attorney of record, k E. C ( 0 00), on
notice to the plaintiff and the Court, shall be released and distribute and itis
ORDERED: de½dent A.I.P.'s counsel shall advise plaintiff CDC's counsel of the name
and contact infor=a+ion for the prospective purchaser of 15 South Depot Plaza, purchaser's title
company, and itsattorney within 24 hours of this stipulation being "so ordered"; and itis
INDEX NO. 51573/2015
FILED : WESTCHESTER COUNTY CLERK 02/06/2019 11:37 AM|
NYS€EF D . NO. 374 RECE1VED NYSCEF: 02/06/2019
ORDERED: upon the signing of thisOrder, counsel forplai=*iECDC shall serve this
Order upon the purchaser's titlecompany, the purchaser, and the purchaser's attorney, allof
whom shall thereupon be on notice of this Order; and itis further
ORDERED: upon the signing of thisOrder, plaintiff CDC's motion and defendant
A.I.P.'s cross-motion are Withdrawn.
Dated: White Plains, New York
January 30, 2019
ALLO VITUCCI KLAR LLP MAR . CONSfÁ INE,ESQ.
By: John U. H. Blumen•tock By: Mark E. Constantine
Attorneys for plaintsf CDC Attorneys for defendant A.LP.
One Bridge Street,Suite 140 106 North Broadway
Irvington, New York 10533. Irvington, New York 10533
683 - 7100 (ext . 631 - 0410
(212) 394) (914)
SO -ORDERED·
E N T E R:
Hon. NCE H. E J.S.C.
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