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FILED: NEW YORK COUNTY CLERK 06/11/2014 INDEX NO. 652637/2013
NYSCEF DOC. NO. 172 RECEIVED NYSCEF: 06/11/2014
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
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BRANDSWAY HOSPITALITY, LLC a/k/a
BRANDSWAY HOSPITALITY, INDIEFORK LLC Index No. 652637/2013
and MATTHEW LEVINE,
Plaintiffs,
SECOND AMENDED
-against- VERIFIED COMPLAINT
DELSHAH CAPITAL, LLC, DELSHAH MANAGEMENT,
LLC, MICHAEL K. SHAH, VICTOR JUNG, V GLOBAL
HOLDINGS INC., 133 ESSEX RESTAURANT LLC a/k/a
SONS OF ESSEX, BLACK LABEL RESIDENTIAL LLC, 19
STANTON STREET, LLC, 19 STANTON STREET, LLC, 19
STANTON RESTAURANT LLC a/k/a COCKTAIL BODEGA
a/k/a COCKTAIL BODEGA UNDERGROUND, 61 GANS
RESTAURANT LLC, GRIFFON GANSEVOORT HOLDINGS
LLC, GRIFFON 1356 LLC, 1356 RESTAURANT LLC a/k/a
PETALUMA RESTAURANT, 170 MERCER RESTAURANT
LLC, MOON 170 MERCER, INC., 58-60 NINTH REALTY
LLC, DELSHAH 60 NINTH LLC a/k/a POP BURGER,
DELSHAH 60 NINTH MANAGER, LLC, DELSHAH
GANSEVOORT 69, LLC, 69 GANSEVOORT RESTAURANT,
INC.,INDIEFORK HOSPITALITY LLC, JAMES CHOUNG,
JCNY, LLC and JP MORGAN CHASE & CO.,
Defendants.
JOHN DOE #1 through #10 are fictitious and unknown to the
plaintiffs, the person or parties intended being the persons or
parties, if any, having or claiming an ownership interest in any of
the defendant companies or the real property in which they are
situated but whose identity is not yet known.
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Plaintiffs Brandsway Hospitality, LLC a/k/a Brandsway Hospitality, IndieFORK, LLC
and Matthew Levine (together “Plaintiffs”), by and through their attorneys, Fishman & Decea, as
and for their second amended verified complaint allege as follows:
Preliminary Statement
1. Plaintiff Brandsway Hospitality, LLC a/k/a Brandsway Hospitality
(“Brandsway”), is a full service food and beverage hospitality and operations firm based in New
York City.
2. Pursuant to a written contract with defendant 133 Essex Restaurant, LLC (“133
Essex”), Brandsway was the managing partner and co-owner of certain New York City
restaurants and lounges including Sons of Essex, Cocktail Bodega, Cocktail Bodega
Underground, 61 Gans Restaurant, LLC and Petaluma (collectively the “Restaurants”).
3. On April 23, 2013, Brandsway was terminated by defendant 133 Essex which
declared unilaterally that Brandsway’s ownership interest conferred under the contract was
rescinded.
4. At the time of its termination Brandsway was a partner in the concept, selection and
development of additional restaurant venues including 53-61 Gansevoort Street located in the
Meatpacking District (the “Meatpacking Space”), and the development and marketing of 170
Mercer Street located in Soho (the “Soho Space”) and of 58-60th Ninth Avenue (collectively the
Meatpacking Space and the Soho Space shall be referred to herein as the “Catering Venues”).
5. Plaintiff Matthew Levine (“Levine”) is the principal of Brandsway. Levine is a
highly regarded food and beverage industry insider.
6. Defendant Michael K. Shah (“Shah”), the principal of defendants DelShah Capital,
LLC (“Delshah Capital”) and DelShah Management, LLC, a real estate firm, (collectively,
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DelShah Capital and DelShah Management shall be referred to as the “DelShah Entities”)
solicited Levine to create, market, manage and operate a restaurant to be opened at 133 Essex
Street, New York, New York (“Essex Property”). The restaurant was later named by Levine as
Sons of Essex (“Sons of Essex”).
7. Levine was the creator and the face of the operations at Sons of Essex.
8. Due to Levine’s community support, perfect track record and stellar reputation,
Levine was responsible for obtaining and the transferring of the liquor licenses for the
Restaurants.
9. Defendants DelShah Capital and Shah were only able to obtain favorable
financing for various real estate ventures using Levine’s biography and food and beverage
success since their financing was contingent upon the involvement of a proven restaurant
operator, such as Levine
10. In addition to investing his time and money, in many cases Levine personally
guaranteed the liabilities associated with those real estate ventures as one of the owners thereof.
11. Plaintiff IndieFORK, LLC (“IndieFORK”), was formed by Levine to provide
innovative food and beverage options in an alternative environment to the mainstream restaurant
and food industry. Levine is the sole member of IndieFORK.
12. IndieFORK attempted to undertake, by necessity, the handling of certain aspects
of the Sons of Essex business including managing its payroll after Levine discovered that
employees of Sons of Essex were providing services to other projects of Shah and his employee
Victor Jung (“Jung”) using, upon information and belief, all of the defendants named in this
action, among others, in violation of State and Federal law.
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13. Defendants Shah and DelShah Capital, DelShah Management, LLC (“DelShah
Management”), in conspiracy with defendant Jung, and, upon information and belief, Jung and
his company V Global Holdings, Inc. (“V Global”), have undertaken to divert all of the work,
good will and assets belonging to Brandsway and IndieFORK to themselves and to the exclusion
of Plaintiffs.
14. By using the assets and profits of Sons of Essex on unrelated projects and for
political lobbying, Shah and Jung intended to disguise such profits as legitimate business
expenses to avoid paying income and sales tax.
15. When Plaintiffs inquired about or challenged any of the foregoing acts of Jung
which appeared questionable, Shah and Jung told Levine that any modifications made to the
revenue of Sons of Essex or its staff were legitimate, were being booked properly and would be
reconciled by the accountants at year end.
16. In an effort to build the business which Levine believed he and Shah were
establishing as 50/50 partners through IndieFORK, Levine allowed certain events he coordinated
to be booked through the Catering Venues and Restaurants rather than Sons of Essex, because
Sons of Essex was exceeding financial projections, and Levine was not under pressure to bring
events to Sons of Essex to maximize sales.
17. In addition, Jung has gone so far as to authorize employees of Sons of Essex,
including James Choung (“Choung”), to forge the names of Shah and Levine on documents; to
date it is not clear what documents were forged and/or when by Jung and/or Choung.
18. DelShah Capital terminated Brandsway and declared that neither Levine,
Brandsway nor IndieFORK had any interest in the Restaurants and Catering Venues.
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19. Defendants Shah and Jung wanted Brandsway and Levine to be partners when it
suited their agenda; to obtain or transfer liquor licenses, bank financing, money from the
promotional activities orchestrated by Levine and Levine’s signature as a guarantor.
20. When the fruits of Levine’s labor were realized, and Brandsway’s brand made the
Restaurants successful, the contract with Brandsway and Levine was terminated.
21. Absent the relief requested herein, defendants will succeed and all of Plaintiffs’
hard work will be taken by defendants.
22. Levine’s reputation in the industry will be destroyed by Jung, who has continued
to date to defame Levine via social media sites such as Twitter and Instagram as well as in
emails to third parties, including creditors.
The Parties
23. Brandsway is a company organized and existing pursuant to the laws of the State
of New York with its principal office in the State of New York, New York County.
24. IndieFORK is a company organized and existing pursuant to the laws of the State
of New York with its principal office in the State of New York, New York County.
25. Levine is a resident of the State of New York, New York County.
26. DelShah Capital is a company organized and existing pursuant to the laws of the
State of New York with its principal office in the State of New York.
27. DelShah Management is a company organized and existing pursuant to the laws
of the State of New York with its principal office in the State of New York.
28. Shah is a resident of the State of New York, residing in New York City.
29. Jung is, upon information and belief, a resident of the State of New Jersey and
the: (i) executive vice president of DelShah Capital; and (ii) Chairman & CEO of V Global.
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30. V Global is a corporation organized and existing under the laws of the State of
New York with its principal place of business in the State of New York. Upon information and
belief Jung is the principal of V Global.
31. 133 Essex d/b/a Sons of Essex is a company organized and existing pursuant to
the laws of the State of New York with its principal place of business in the State of New York.
Brandsway is a member of Sons of Essex.
32. Black Label Residential LLC (“Black Label”) is a company organized and
existing pursuant to the laws of the State of New York with its principal place of business in the
State of New York. Black Label is an entity who is, upon information and belief, owned by
Shah; Black Label is the landlord of the Essex Property. Black Label owns the first floor and
basement of the building located at 133 Essex Street where Sons of Essex is situated.
33. 19 Stanton Street, LLC is a company organized and existing pursuant to the
laws of the State of New York with its principal place of business in the State of New York.
Upon information and belief DelShah Capital and/or Shah is the principal of 19 Stanton Street,
LLC. Further, 19 Stanton Street, LLC is, upon information and belief, the owner of real property
at 19 Stanton Street, New York, New York (“19 Stanton Street Building”).
34. 19 Stanton Street, LLC is a company organized and existing pursuant to the laws
of the State of Delaware with its principal place of business in the State of New York. Upon
information and belief DelShah Capital and/or Shah is the principal of 19 Stanton Street, LLC.
35. 19 Stanton Restaurant, LLC, a/k/a Cocktail Bodega, a/k/a Cocktail Bodega
Underground (collectively “Cocktail Bodega”), is a company organized and existing pursuant to
the laws of the State of New York with its principal place of business in the State of New York.
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Brandsway is a member of Cocktail Bodega. Levine is listed as a 50% owner of 19 Stanton
Restaurant, LLC on all SLA documents filed with New York State.
36. 61 Gans Restaurant LLC is a company organized and existing pursuant to the
laws of the State of New York with its principal place of business in the State of New York.
Brandsway is a member of 61 Gans Restaurant LLC. Levine is listed as a 50% owner of 61 Gans
Restaurant LLC on all SLA documents filed with New York State.
37. Griffon Gansevoort Holdings, LLC (“Gansevoort Holdings”) is a company
organized and existing pursuant to the laws of the State of New York with its principal place of
business in the State of New York. Gansevoort Holdings is, upon information and belief, the
owner of real property at the Meatpacking Space. Upon information and belief DelShah Capital
and/or Shah is the principal of Gansevoort Holdings.
38. Griffon 1356 LLC is a company organized and existing pursuant to the laws of
the State of New York with a principal place of business in the State of New York. Griffon 1356
LLC is, upon information and belief, the owner of real property at 1356 1st Ave #2D, known as
Petaluma Restaurant. Upon information and belief DelShah and/or Shah is the principal of
Griffon 1356 LLC. Brandsway is a member of Griffon 1356 LLC.
39. 1356 Restaurant LLC a/k/a Petaluma Restaurant (“Petaluma”) is a company
organized and existing pursuant to the laws of the State of New York with a principal place of
business in the State of New York. Upon information and belief Del Shah and/or Shah is the
principal of 1356 Restaurant LLC.
40. 170 Mercer Restaurant LLC (“170 Mercer”) is a company organized and existing
pursuant to the laws of the State of New York with its principal place of business in the State of
New York. 170 Mercer Restaurant LLC, upon information and belief, holds a leasehold interest
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in the real property and building located at 170 Mercer Street, which is the future site of a
restaurant to be located on the first floor of the building. Brandsway is a member of 170 Mercer.
41. Moon 170 Mercer, Inc. is a company organized and existing pursuant to the laws
of the State of Delaware with its principal place of business in the State of New York. Upon
information and belief DelShah Capital and/or Shah is the principal of Moon 170 Mercer, Inc.
42. 58-60 Ninth Realty LLC is a company organized and existing pursuant to the laws
of the State of New York with its principal place of business in the State of New York. 58-60
Ninth LLC is, upon information and belief, the owner of the real property and building located at
58-60 Ninth Avenue, known as Pop Burger restaurant (referred to herein as “Pop Burger”). Upon
information and belief DelShah Capital and/or Shah is the principal of 58-60 Ninth Realty LLC.
43. Delshah 60 Ninth LLC a/k/a Pop Burger is a company organized and existing
pursuant to the laws of the State of New York with its principal place of business in the State of
New York. Delshah 60 Ninth LLC is, upon information and belief, the owner of the real
property and building located at 60 Ninth Street, and is the site of a restaurant to be located on
the first floor of the building.
44. DelShah 60 Ninth Manager, LLC is a company organized and existing pursuant to
the laws of the State of Delaware with its principal place of business in the State of New York.
Upon information and belief DelShah Capital and/or Shah is the principal of DelShah 60 Ninth,
LLC. Upon information and belief, Shah created this company secretly to facilitate and
perpetrate his scheme of fraud against Levine by possessing a company of which Levine had no
knowledge in order to secret partnership assets.
45. DelShah Gansevoort 69, LLC is a company organized and existing pursuant to the
laws of the State of New York with its principal place of business in the State of New York.
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46. DelShah Gansevoort 69, LLC is, upon information and belief, the owner of the
real property and building located at 69 Gansevoort Street, and is the site of a restaurant to be
located on the first floor of the building.
47. IndieFORK Hospitality LLC (“IF Hospitality”) is a company organized and
existing pursuant to the laws of the State of New York with its principal place of business in the
State of New York. Upon information and belief, IF Hospitality is owned by Jung and/or Shah.
48. Choung is, upon information and belief, the director of operations of Sons of
Essex, 61 Gans Restaurant LLC, 19 Stanton Restaurant LLC and Petaluma. Choung is, upon
information and belief, a resident of the State of New York.
49. JCNY, LLC is a company organized and existing pursuant to the laws of the State
of New York with its principal place of business in the State of New York. Upon information
and belief, Choung is the principal of JCNY, LLC.
50. JPMorgan Chase & Co., (“Chase Bank”), is a corporation organized and existing
under the laws of the Delaware with its principal place of business in the State of New York.
51. Defendants named “John Doe # 1 through John Doe # 10" are persons or parties
in possession of, having or claiming an ownership interest in any of the defendant companies or
the real property in which they are situated but whose identity is not yet known.
AS AND FOR A FIRST CAUSE OF ACTION
FOR BREACH OF CONTRACT AGAINST DELSHAH CAPITAL
52. Plaintiffs repeat and reallege all allegations contained in all the foregoing
paragraphs of this complaint as if they were fully stated herein.
53. On or about March 9, 2011, DelShah Capital and Brandsway entered into an
agreement for the management and operation of Sons of Essex, a restaurant located at the Essex
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Property (the “Management and Operations Agreement”), a copy of which is annexed hereto as
Exhibit A
54. Under the Management and Operations Agreement, Brandsway and its principal,
Levine, were to run the day to day operations of Sons of Essex
55. Under the Management and Operations Agreement, Brandsway was a thirty-five
(35%) percent owner of Sons of Essex, which ownership interest would vest upon the repayment
of a loan as follows:
(i) Within the first three calendar quarters, $125,000; and
(ii) Within the first five calendar quarters, $350,000.
(Exhibit A, Schedule A Term Sheet).
56. Pursuant to paragraph 4.2 of the Management and Operations Agreement, the
parties were to enter into an operating agreement for Sons of Essex.
57. The Management and Operations Agreement is a valid and binding contract
between Brandsway and DelShah Capital in which DelShah Capital agreed to provide financing
for the construction and operation of Sons of Essex.
58. Brandsway in all respects performed its duties under the Management and
Operations Agreement.
59. DelShah Capital breached the Management and Operations Agreement in
numerous and substantial ways.
60. DelShah Capital made no effort to confirm how Jung was using the proceeds and
capital generated by Sons of Essex or that such proceeds were being commingled with other
projects.
61. DelShah Capital refused to discuss the terms of the net profits of Sons of Essex
with Levine as required under the Management and Operations Agreement.
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62. DelShah Capital refused to enter into the operating agreement for Sons of Essex
as required under the Management and Operations Agreement.
63. DelShah Capital refused to issue the shares to Brandsway required under the
Management and Operations Agreement.
64. DelShah Capital refused to issue the monthly management fees for each and every
project it undertook on behalf of DelShah Capital including for Cocktail Bodega, Sons of Essex,
the Meatpacking Space, the Soho Space and Petaluma.
65. Plaintiffs Levine and Brandsway obtained in excess of $500,000 in brand
partnerships, special events, promotions, and sponsorship dollars for the Meatpacking Space, 19
Stanton and Petaluma. To date none of these funds have been accounted for.
66. As a result of Shah’s and DelShah Capital’s breaches of the Management and
Operations Agreement, Brandsway has been damaged.
67. Brandsway is entitled to its share of Sons of Essex’s monthly management fees
for each and every project it undertook on behalf of DelShah Capital including Cocktail Bodega,
Sons of Essex, the Meatpacking Space, the Soho Space and Petaluma.
68. At the time of Brandsway’s wrongful termination, Levine had not been paid his
full management fee for April 2013 for Sons of Essex, or his full amounts from Cocktail Bodega,
and absolutely no management fees to date from the Catering Spaces, Meatpacking Space or
Petaluma despite his numerous requests for same; it has not been paid to date
69. Brandsway was also never paid any of the equity payments due to it.
70. By reason of the foregoing, DelShah Capital is indebted to Brandsway in an
amount to be determined upon the trial of this action but currently believed to be in excess of
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$20,000,000, together with interest and attorneys’ fees as provided for under the Management
and Operations Agreement.
AS AND FOR A SECOND CAUSE OF ACTION
FOR WRONGFUL TERMINATION AGAINST DELSHAH CAPITAL
71. Plaintiffs repeat and reallege all allegations contained in all the foregoing
paragraphs of this complaint as if they were fully stated herein.
72. The Management and Operations Agreement is a valid and binding contract
governing the relationship between DelShah Capital and Brandsway.
73. Levine is a named and intended third-party beneficiary of the Management and
Operations Agreement.
74. On or about April 23, 2013, the Management and Operations Agreement was
wrongfully terminated by DelShah Capital in contravention of the express terms of the
Management and Operations Agreement.
75. DelShah Capital purported to terminate the Management and Operations
Agreement “for cause” under two false premises that Brandsway and Levine: (i) failed to meet
the metrics outlined in the Management and Operations Agreement; and (ii) were guilty of fraud
and other bad acts.
76. Upon information and belief, Levine was wrongfully removed from Sons of Essex
due predominantly for his acts to prevent ongoing theft and fraud by Shah and Jung.
77. Levine and Jung held weekly manager meetings every Tuesday. Not once was
Levine’s purported failure to meet metrics ever discussed.
78. Levine, Jung and Shah held bi-weekly owners meetings on Wednesdays, and
there too, not once were the finances of Sons of Essex or the repayment by Levine of any loan
owed to DelShah Capital discussed.
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79. Sons of Essex discussions consisted of praise and the growing group portfolio that
Levine and Shah shared. Prior to most of the owners meetings, agendas were sent out; Levine’s
metrics were never an issue on the agendas or in the meetings.
80. Accordingly, Brandsway and Levine were terminated ostensibly “for cause” from
the business Levine had spent years building and cultivating.
81. In point of fact, Brandsway’s performance was exemplary as Sons of Essex was a
smash hit.
82. Jung and Shah wanted Levine out in order to gain unfettered access to Sons of
Essex so that they could continue to steal from it, commingle funds with the other Restaurants
and Shah’s other businesses and take advantage of the tax benefits of their commingling of
funds.
83. By virtue of the wrongful termination, DelShah Capital avoided having to provide
to Brandsway the right of first refusal to any future deal as required by the Management and
Operations Agreement.
84. The termination was pretextual and an effort to steal from Brandsway and Levine
the brand and good will they had built under the terms of the Management and Operations
Agreement.
85. As a result of the wrongful termination of Brandsway and Levine, they have been
damaged in an amount to be determined upon the trial of this action, but currently believed to be
in excess of $20,000,000, together with interest and attorneys’ fees as provided for under the
Management and Operations Agreement.
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AS AND FOR A THIRD CAUSE OF ACTION
FOR FRAUD AGAINST THE DELSHAH ENTITIES, SHAH AND JUNG
86. Plaintiffs repeat and reallege all allegations contained in all the foregoing
paragraphs of this complaint as if they were fully stated herein.
87. Starting in or about Spring, 2012, in an effort to induce Levine to work on various
projects for the Restaurants and Catering Venues, defendants Shah and Jung represented to
Levine that Shah and Levine were to become partners in a new umbrella entity under the
IndieFORK name in which Shah and Levine would be 50/50 partners for all of the Restaurants
and Catering Venues.
88. As a result of the representations of Shah and Jung, Levine pushed more and more
business from Sons of Essex to the other venues such as Cocktail Bodega, Petaluma, 61
Gansevoort, the Meatpacking Space, and to conceptualize and market 69 Gansevoort and the
Soho Space.
89. Unbeknownst to Levine, at the time Shah and Levine were supposedly 50%
partners, the money earned by Brandsway and Levine at the Restaurants and Catering Venues
was being commingled by the DelShah Entities with various other projects.
90. Jung constantly directed the Sons of Essex staff to direct business to Cocktail
Bodega, the Soho Space, the Meatpacking Space, and Petaluma.
91. Payments made by Plaintiffs to reduce and ultimately pay-off the loan for Sons of
Essex under the Management and Operations Agreement were never credited by DelShah
Capital against the loan balance due and owing under the Management and Operations
Agreement.
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92. Instead, upon information and belief, the revenue generated by Brandsway and
Levine was used to purchase other properties and pay off various mortgages and other debts for
the Restaurants and Catering Venues.
93. The hourly pay and tips for the staff working (bartenders, bussers, runners,
servers, kitchen staff, etc.) at all of these events at the Meatpacking Space would eventually be
added to the employee Sons of Essex checks. Clearly, Sons of Essex was paying for staff across
the entire portfolio.
94. Jung, who constantly boasted about his 17 years of accounting experience, altered
the profits and expenses that were to be recorded into the profit and loss statements, by
reclassifying and recoding expenses to disguise any misappropriations.
95. Jung’s acts continuously took money away from Sons of Essex, although he
regularly discussed them within the “global strategy for the portfolio” essentially taking money
out of Sons of Essex.
96. The extensive revenue generated by Sons of Essex and the other events that
Levine obtained for the “umbrella company” were used to finance and fund all of the other
restaurants including ones Levine had not conceptualized or developed yet, such as Pop Burger,
including funding the personnel at these restaurants, to purchase the liquor, and to pay off
commercial mortgages for other properties. Yet these expenses were booked as expenses of Sons
of Essex which clearly they were not. None of these acts were authorized by Brandsway or
Levine; they were solely perpetrated by Jung and Shah through the DelShah Entities.
97. Upon information and belief, Gansevoort Holdings, an entity controlled by Jung
and Shah, purchased the Meatpacking Space and assumed $1.3 Million in debt as part of the
purchase.
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98. Over the course of several months, during all partner meetings, salary allocations
were discussed, but never approved, as it is believed that Jung and Shah continued to steal
money from the other assets, while Sons of Essex continued to pay all the salaries and avoid
accounting for the moneys due to Brandsway and Levine.
99. Despite various requests by Levine, the IndieFORK compensation structure was
never finalized.
100. Levine did not have access to payroll or QuickBooks; this fraud eventually came
to Levine's attention after his false termination.
101. At the time such material representations were made, the representations were
false and defendants the Delshah Entities, Shah and Jung knew they were false.
102. These material representations contained above were intended to and did deceive
Brandsway and Levine into, inter alia, accepting various management and promotional roles and
believing Levine would be provided an ownership interest in the umbrella company the parties
were establishing.
103. Upon information and belief, the umbrella company concept appears to be a plan
by DelShah Entities, Shah and Jung to manipulate the books and collaterally to contend that
Levine did not meet the metrics set forth in the Management and Operations Agreement.
104. Plaintiffs were unaware of the falsity of the representations when they were made
by Shah, Jung and relied upon those representations in accepting additional assignments from the
DelShah Entities, Shah and Jung without compensation.
105. As a result of defendants DelShah Entities, Shah, Jung’s fraud and deceit as
aforesaid, Brandsway and Levine are entitled to a money judgment against Shah and Jung,
jointly and severally, in an amount to be determined upon the trial of this action but presently
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believed to be in excess of $20,000,000. Brandsway and Levine’s damages will continue to
accrue during the pendency of this action.
AS AND FOR A FOURTH CAUSE OF ACTION
FOR FRAUD AGAINST CHOUNG
106. Plaintiffs repeat and reallege all allegations contained in all the foregoing
paragraphs of this complaint as if they were fully stated herein.
107. Choung at the direction of Jung forged the signature of Levine on various
documents including checks and credit card applications for Cocktail Bodega and Sons of Essex.
108. At the time such material representations were made, the representations were
false and defendant Choung knew they were false.
109. Choung was not authorized by Levine to sign his name on any document nor to
obtain credit under Levine’s name.
110. The extent of Choung’s misappropriation of Levine’s name and likeness in order
to obtain unauthorized credit is unclear to date.
111. The material representations were intended to and did deceive third parties into
issuing credit to defendants Shah, Jung and Choung under Levine’s name.
112. Upon information and belief these credit transactions have and will impact Levine
and Brandsway’s credit rating and reputation in the industry.
113. Moreover, although the extent of the misappropriation of funds by Jung and
Choung under Brandsway and Levine is unknown, it is believed that this contributed to the
overall reduction in profits of Sons of Essex.
114. Plaintiffs were unaware of the falsity of the representations when they were made
by Shah, Jung and Choung and relied upon those representations in accepting additional
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assignments from DelShah Capital, DelShah Management, Shah and Jung without
compensation.
115. As a result of defendant Choung’s fraud and deceit as aforesaid, Brandsway and
Levine are entitled to a money judgment against Choung, in an amount to be determined upon
the trial of this action but presently believed to be in excess of $20,000,000. Plaintiffs’ damages
will continue to accrue during the pendency of this action.
AS AND FOR A FIFTH CAUSE OF ACTION
FOR AIDING AND ABETTING FRAUD
116. Plaintiffs repeat and reallege all allegations contained in all the foregoing
paragraphs of this complaint as if they were fully stated herein.
117. As set forth above, Shah, Jung and Choung committed multiple acts of fraud
against Plaintiffs.
118. All of the other named defendants against whom this claim for relief is brought,
V Global, 133 Essex, Black Label , 19 Stanton Street, LLC (NY), 19 Stanton Street, LLC (DE),
19 Stanton Restaurant LLC a/k/a Cocktail Bodega a/k/a Cocktail Bodega Underground, 61 Gans
Restaurant, LLC, Gansevoort Holdings, Griffon 1356, LLC, Petaluma, 170 Mercer, Moon 170
Mercer, Inc., 58-60 Ninth Realty LLC, Delshah 60 Ninth LLC a/k/a Pop Burger, DelShah 60
Ninth Manager, LLC, DelShah Gansevoort 69, LLC, IF Hospitality, JCNY, LLC and Chase
Bank (collectively, the “Aiders and Abettors”) had actual knowledge of these frauds.
119. The Aiders and Abettors had constructive knowledge of these frauds.
120. All Aiders and Abettors provided substantial assistance to advance the
commission of the frauds.
121. Shah’s personal knowledge of the fraud is imputed to all entities he owns,
operates or controls, including 133 Essex, Black Label, 19 Stanton LLC (NY), 19 Restaurant
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LLC (DE), 19 Stanton Restaurant LLC a/k/a Cocktail Bodega a/k/a Cocktail Bodega
Underground, 61 Gans Restaurant, LLC, Gansevoort Holdings, Griffon 1356, LLC, Petaluma,
170 Mercer, Moon 170 Mercer, Inc., 58-60 Ninth Realty LLC, Delshah 60 Ninth LLC a/k/a Pop
Burger, DelShah 60 Ninth Manager, LLC, DelShah Gansevoort 69, LLC and IF Hospitality.
122. Jung’s personal knowledge of the fraud is imputed to all entities he owns,
operates or controls, including V Global Holdings, Inc. and IF Hospitality.
123. Choung’s personal knowledge of the fraud is imputed to all entities he owns,
operates or controls including JCNY LLC.
124. Shah, Jung and Choung used these entities in the course of defrauding Plaintiffs
by transferring, food, liquor, personnel and monies through these entities or for their benefit.
125. Upon information and belief, the Aiders and Abettors all knowingly received
fraudulent transfers of ill-gotten amounts.
126. By reason of the foregoing, the Aiders and Abettors are indebted to Plaintiffs in
amount to be determined upon the trial of this action but presently believed to be in excess of
$20,000,000. Plaintiffs’ damages will continue to accrue during the pendency of this action.
AS AND FOR A SIXTH CAUSE OF ACTION
FOR CONVERSION AGAINST SHAH, JUNG AND CHOUNG
127. Plaintiffs repeat and reallege all allegations contained in all the foregoing
paragraphs of this complaint as if they were fully stated herein.
128. Upon information and belief, profits of Sons of Essex were converted by
defendants Shah, Jung and Choung to pay for the debt service of the Meatpacking Space and the
Catering Spaces, among other spaces referenced herein
129. Shah, Jung and Choung converted monies from Plaintiffs.
19
130. Shah, Jung and Choung failed and refused to repay these amounts, despite
demand being made.
131. Defendants Shah, Jung and Choung have no legal right or titleto the converted
amounts.
132. Plaintiffs have been damaged as a result of Shah, Jung and Choung’s conversions.
133. By reason of the foregoing, defendants Shah, Jung and Choung are indebted to
Plaintiffs in an amount to be determined upon the trial of this action but presently believed to be
Preview
FILED: NEW YORK COUNTY CLERK 06/11/2014 INDEX NO. 652637/2013 NYSCEF DOC. NO. 172 RECEIVED NYSCEF: 06/11/2014 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK ----------------------------------------------------------------------------------X BRANDSWAY HOSPITALITY, LLC a/k/a BRANDSWAY HOSPITALITY, INDIEFORK LLC Index No. 652637/2013 and MATTHEW LEVINE, Plaintiffs, SECOND AMENDED -against- VERIFIED COMPLAINT DELSHAH CAPITAL, LLC, DELSHAH MANAGEMENT, LLC, MICHAEL K. SHAH, VICTOR JUNG, V GLOBAL HOLDINGS INC., 133 ESSEX RESTAURANT LLC a/k/a SONS OF ESSEX, BLACK LABEL RESIDENTIAL LLC, 19 STANTON STREET, LLC, 19 STANTON STREET, LLC, 19 STANTON RESTAURANT LLC a/k/a COCKTAIL BODEGA a/k/a COCKTAIL BODEGA UNDERGROUND, 61 GANS RESTAURANT LLC, GRIFFON GANSEVOORT HOLDINGS LLC, GRIFFON 1356 LLC, 1356 RESTAURANT LLC a/k/a PETALUMA RESTAURANT, 170 MERCER RESTAURANT LLC, MOON 170 MERCER, INC., 58-60 NINTH REALTY LLC, DELSHAH 60 NINTH LLC a/k/a POP BURGER, DELSHAH 60 NINTH MANAGER, LLC, DELSHAH GANSEVOORT 69, LLC, 69 GANSEVOORT RESTAURANT, INC.,INDIEFORK HOSPITALITY LLC, JAMES CHOUNG, JCNY, LLC and JP MORGAN CHASE & CO., Defendants. JOHN DOE #1 through #10 are fictitious and unknown to the plaintiffs, the person or parties intended being the persons or parties, if any, having or claiming an ownership interest in any of the defendant companies or the real property in which they are situated but whose identity is not yet known. -------------------------------------------------------------------------------------X Plaintiffs Brandsway Hospitality, LLC a/k/a Brandsway Hospitality, IndieFORK, LLC and Matthew Levine (together “Plaintiffs”), by and through their attorneys, Fishman & Decea, as and for their second amended verified complaint allege as follows: Preliminary Statement 1. Plaintiff Brandsway Hospitality, LLC a/k/a Brandsway Hospitality (“Brandsway”), is a full service food and beverage hospitality and operations firm based in New York City. 2. Pursuant to a written contract with defendant 133 Essex Restaurant, LLC (“133 Essex”), Brandsway was the managing partner and co-owner of certain New York City restaurants and lounges including Sons of Essex, Cocktail Bodega, Cocktail Bodega Underground, 61 Gans Restaurant, LLC and Petaluma (collectively the “Restaurants”). 3. On April 23, 2013, Brandsway was terminated by defendant 133 Essex which declared unilaterally that Brandsway’s ownership interest conferred under the contract was rescinded. 4. At the time of its termination Brandsway was a partner in the concept, selection and development of additional restaurant venues including 53-61 Gansevoort Street located in the Meatpacking District (the “Meatpacking Space”), and the development and marketing of 170 Mercer Street located in Soho (the “Soho Space”) and of 58-60th Ninth Avenue (collectively the Meatpacking Space and the Soho Space shall be referred to herein as the “Catering Venues”). 5. Plaintiff Matthew Levine (“Levine”) is the principal of Brandsway. Levine is a highly regarded food and beverage industry insider. 6. Defendant Michael K. Shah (“Shah”), the principal of defendants DelShah Capital, LLC (“Delshah Capital”) and DelShah Management, LLC, a real estate firm, (collectively, 2 DelShah Capital and DelShah Management shall be referred to as the “DelShah Entities”) solicited Levine to create, market, manage and operate a restaurant to be opened at 133 Essex Street, New York, New York (“Essex Property”). The restaurant was later named by Levine as Sons of Essex (“Sons of Essex”). 7. Levine was the creator and the face of the operations at Sons of Essex. 8. Due to Levine’s community support, perfect track record and stellar reputation, Levine was responsible for obtaining and the transferring of the liquor licenses for the Restaurants. 9. Defendants DelShah Capital and Shah were only able to obtain favorable financing for various real estate ventures using Levine’s biography and food and beverage success since their financing was contingent upon the involvement of a proven restaurant operator, such as Levine 10. In addition to investing his time and money, in many cases Levine personally guaranteed the liabilities associated with those real estate ventures as one of the owners thereof. 11. Plaintiff IndieFORK, LLC (“IndieFORK”), was formed by Levine to provide innovative food and beverage options in an alternative environment to the mainstream restaurant and food industry. Levine is the sole member of IndieFORK. 12. IndieFORK attempted to undertake, by necessity, the handling of certain aspects of the Sons of Essex business including managing its payroll after Levine discovered that employees of Sons of Essex were providing services to other projects of Shah and his employee Victor Jung (“Jung”) using, upon information and belief, all of the defendants named in this action, among others, in violation of State and Federal law. 3 13. Defendants Shah and DelShah Capital, DelShah Management, LLC (“DelShah Management”), in conspiracy with defendant Jung, and, upon information and belief, Jung and his company V Global Holdings, Inc. (“V Global”), have undertaken to divert all of the work, good will and assets belonging to Brandsway and IndieFORK to themselves and to the exclusion of Plaintiffs. 14. By using the assets and profits of Sons of Essex on unrelated projects and for political lobbying, Shah and Jung intended to disguise such profits as legitimate business expenses to avoid paying income and sales tax. 15. When Plaintiffs inquired about or challenged any of the foregoing acts of Jung which appeared questionable, Shah and Jung told Levine that any modifications made to the revenue of Sons of Essex or its staff were legitimate, were being booked properly and would be reconciled by the accountants at year end. 16. In an effort to build the business which Levine believed he and Shah were establishing as 50/50 partners through IndieFORK, Levine allowed certain events he coordinated to be booked through the Catering Venues and Restaurants rather than Sons of Essex, because Sons of Essex was exceeding financial projections, and Levine was not under pressure to bring events to Sons of Essex to maximize sales. 17. In addition, Jung has gone so far as to authorize employees of Sons of Essex, including James Choung (“Choung”), to forge the names of Shah and Levine on documents; to date it is not clear what documents were forged and/or when by Jung and/or Choung. 18. DelShah Capital terminated Brandsway and declared that neither Levine, Brandsway nor IndieFORK had any interest in the Restaurants and Catering Venues. 4 19. Defendants Shah and Jung wanted Brandsway and Levine to be partners when it suited their agenda; to obtain or transfer liquor licenses, bank financing, money from the promotional activities orchestrated by Levine and Levine’s signature as a guarantor. 20. When the fruits of Levine’s labor were realized, and Brandsway’s brand made the Restaurants successful, the contract with Brandsway and Levine was terminated. 21. Absent the relief requested herein, defendants will succeed and all of Plaintiffs’ hard work will be taken by defendants. 22. Levine’s reputation in the industry will be destroyed by Jung, who has continued to date to defame Levine via social media sites such as Twitter and Instagram as well as in emails to third parties, including creditors. The Parties 23. Brandsway is a company organized and existing pursuant to the laws of the State of New York with its principal office in the State of New York, New York County. 24. IndieFORK is a company organized and existing pursuant to the laws of the State of New York with its principal office in the State of New York, New York County. 25. Levine is a resident of the State of New York, New York County. 26. DelShah Capital is a company organized and existing pursuant to the laws of the State of New York with its principal office in the State of New York. 27. DelShah Management is a company organized and existing pursuant to the laws of the State of New York with its principal office in the State of New York. 28. Shah is a resident of the State of New York, residing in New York City. 29. Jung is, upon information and belief, a resident of the State of New Jersey and the: (i) executive vice president of DelShah Capital; and (ii) Chairman & CEO of V Global. 5 30. V Global is a corporation organized and existing under the laws of the State of New York with its principal place of business in the State of New York. Upon information and belief Jung is the principal of V Global. 31. 133 Essex d/b/a Sons of Essex is a company organized and existing pursuant to the laws of the State of New York with its principal place of business in the State of New York. Brandsway is a member of Sons of Essex. 32. Black Label Residential LLC (“Black Label”) is a company organized and existing pursuant to the laws of the State of New York with its principal place of business in the State of New York. Black Label is an entity who is, upon information and belief, owned by Shah; Black Label is the landlord of the Essex Property. Black Label owns the first floor and basement of the building located at 133 Essex Street where Sons of Essex is situated. 33. 19 Stanton Street, LLC is a company organized and existing pursuant to the laws of the State of New York with its principal place of business in the State of New York. Upon information and belief DelShah Capital and/or Shah is the principal of 19 Stanton Street, LLC. Further, 19 Stanton Street, LLC is, upon information and belief, the owner of real property at 19 Stanton Street, New York, New York (“19 Stanton Street Building”). 34. 19 Stanton Street, LLC is a company organized and existing pursuant to the laws of the State of Delaware with its principal place of business in the State of New York. Upon information and belief DelShah Capital and/or Shah is the principal of 19 Stanton Street, LLC. 35. 19 Stanton Restaurant, LLC, a/k/a Cocktail Bodega, a/k/a Cocktail Bodega Underground (collectively “Cocktail Bodega”), is a company organized and existing pursuant to the laws of the State of New York with its principal place of business in the State of New York. 6 Brandsway is a member of Cocktail Bodega. Levine is listed as a 50% owner of 19 Stanton Restaurant, LLC on all SLA documents filed with New York State. 36. 61 Gans Restaurant LLC is a company organized and existing pursuant to the laws of the State of New York with its principal place of business in the State of New York. Brandsway is a member of 61 Gans Restaurant LLC. Levine is listed as a 50% owner of 61 Gans Restaurant LLC on all SLA documents filed with New York State. 37. Griffon Gansevoort Holdings, LLC (“Gansevoort Holdings”) is a company organized and existing pursuant to the laws of the State of New York with its principal place of business in the State of New York. Gansevoort Holdings is, upon information and belief, the owner of real property at the Meatpacking Space. Upon information and belief DelShah Capital and/or Shah is the principal of Gansevoort Holdings. 38. Griffon 1356 LLC is a company organized and existing pursuant to the laws of the State of New York with a principal place of business in the State of New York. Griffon 1356 LLC is, upon information and belief, the owner of real property at 1356 1st Ave #2D, known as Petaluma Restaurant. Upon information and belief DelShah and/or Shah is the principal of Griffon 1356 LLC. Brandsway is a member of Griffon 1356 LLC. 39. 1356 Restaurant LLC a/k/a Petaluma Restaurant (“Petaluma”) is a company organized and existing pursuant to the laws of the State of New York with a principal place of business in the State of New York. Upon information and belief Del Shah and/or Shah is the principal of 1356 Restaurant LLC. 40. 170 Mercer Restaurant LLC (“170 Mercer”) is a company organized and existing pursuant to the laws of the State of New York with its principal place of business in the State of New York. 170 Mercer Restaurant LLC, upon information and belief, holds a leasehold interest 7 in the real property and building located at 170 Mercer Street, which is the future site of a restaurant to be located on the first floor of the building. Brandsway is a member of 170 Mercer. 41. Moon 170 Mercer, Inc. is a company organized and existing pursuant to the laws of the State of Delaware with its principal place of business in the State of New York. Upon information and belief DelShah Capital and/or Shah is the principal of Moon 170 Mercer, Inc. 42. 58-60 Ninth Realty LLC is a company organized and existing pursuant to the laws of the State of New York with its principal place of business in the State of New York. 58-60 Ninth LLC is, upon information and belief, the owner of the real property and building located at 58-60 Ninth Avenue, known as Pop Burger restaurant (referred to herein as “Pop Burger”). Upon information and belief DelShah Capital and/or Shah is the principal of 58-60 Ninth Realty LLC. 43. Delshah 60 Ninth LLC a/k/a Pop Burger is a company organized and existing pursuant to the laws of the State of New York with its principal place of business in the State of New York. Delshah 60 Ninth LLC is, upon information and belief, the owner of the real property and building located at 60 Ninth Street, and is the site of a restaurant to be located on the first floor of the building. 44. DelShah 60 Ninth Manager, LLC is a company organized and existing pursuant to the laws of the State of Delaware with its principal place of business in the State of New York. Upon information and belief DelShah Capital and/or Shah is the principal of DelShah 60 Ninth, LLC. Upon information and belief, Shah created this company secretly to facilitate and perpetrate his scheme of fraud against Levine by possessing a company of which Levine had no knowledge in order to secret partnership assets. 45. DelShah Gansevoort 69, LLC is a company organized and existing pursuant to the laws of the State of New York with its principal place of business in the State of New York. 8 46. DelShah Gansevoort 69, LLC is, upon information and belief, the owner of the real property and building located at 69 Gansevoort Street, and is the site of a restaurant to be located on the first floor of the building. 47. IndieFORK Hospitality LLC (“IF Hospitality”) is a company organized and existing pursuant to the laws of the State of New York with its principal place of business in the State of New York. Upon information and belief, IF Hospitality is owned by Jung and/or Shah. 48. Choung is, upon information and belief, the director of operations of Sons of Essex, 61 Gans Restaurant LLC, 19 Stanton Restaurant LLC and Petaluma. Choung is, upon information and belief, a resident of the State of New York. 49. JCNY, LLC is a company organized and existing pursuant to the laws of the State of New York with its principal place of business in the State of New York. Upon information and belief, Choung is the principal of JCNY, LLC. 50. JPMorgan Chase & Co., (“Chase Bank”), is a corporation organized and existing under the laws of the Delaware with its principal place of business in the State of New York. 51. Defendants named “John Doe # 1 through John Doe # 10" are persons or parties in possession of, having or claiming an ownership interest in any of the defendant companies or the real property in which they are situated but whose identity is not yet known. AS AND FOR A FIRST CAUSE OF ACTION FOR BREACH OF CONTRACT AGAINST DELSHAH CAPITAL 52. Plaintiffs repeat and reallege all allegations contained in all the foregoing paragraphs of this complaint as if they were fully stated herein. 53. On or about March 9, 2011, DelShah Capital and Brandsway entered into an agreement for the management and operation of Sons of Essex, a restaurant located at the Essex 9 Property (the “Management and Operations Agreement”), a copy of which is annexed hereto as Exhibit A 54. Under the Management and Operations Agreement, Brandsway and its principal, Levine, were to run the day to day operations of Sons of Essex 55. Under the Management and Operations Agreement, Brandsway was a thirty-five (35%) percent owner of Sons of Essex, which ownership interest would vest upon the repayment of a loan as follows: (i) Within the first three calendar quarters, $125,000; and (ii) Within the first five calendar quarters, $350,000. (Exhibit A, Schedule A Term Sheet). 56. Pursuant to paragraph 4.2 of the Management and Operations Agreement, the parties were to enter into an operating agreement for Sons of Essex. 57. The Management and Operations Agreement is a valid and binding contract between Brandsway and DelShah Capital in which DelShah Capital agreed to provide financing for the construction and operation of Sons of Essex. 58. Brandsway in all respects performed its duties under the Management and Operations Agreement. 59. DelShah Capital breached the Management and Operations Agreement in numerous and substantial ways. 60. DelShah Capital made no effort to confirm how Jung was using the proceeds and capital generated by Sons of Essex or that such proceeds were being commingled with other projects. 61. DelShah Capital refused to discuss the terms of the net profits of Sons of Essex with Levine as required under the Management and Operations Agreement. 10 62. DelShah Capital refused to enter into the operating agreement for Sons of Essex as required under the Management and Operations Agreement. 63. DelShah Capital refused to issue the shares to Brandsway required under the Management and Operations Agreement. 64. DelShah Capital refused to issue the monthly management fees for each and every project it undertook on behalf of DelShah Capital including for Cocktail Bodega, Sons of Essex, the Meatpacking Space, the Soho Space and Petaluma. 65. Plaintiffs Levine and Brandsway obtained in excess of $500,000 in brand partnerships, special events, promotions, and sponsorship dollars for the Meatpacking Space, 19 Stanton and Petaluma. To date none of these funds have been accounted for. 66. As a result of Shah’s and DelShah Capital’s breaches of the Management and Operations Agreement, Brandsway has been damaged. 67. Brandsway is entitled to its share of Sons of Essex’s monthly management fees for each and every project it undertook on behalf of DelShah Capital including Cocktail Bodega, Sons of Essex, the Meatpacking Space, the Soho Space and Petaluma. 68. At the time of Brandsway’s wrongful termination, Levine had not been paid his full management fee for April 2013 for Sons of Essex, or his full amounts from Cocktail Bodega, and absolutely no management fees to date from the Catering Spaces, Meatpacking Space or Petaluma despite his numerous requests for same; it has not been paid to date 69. Brandsway was also never paid any of the equity payments due to it. 70. By reason of the foregoing, DelShah Capital is indebted to Brandsway in an amount to be determined upon the trial of this action but currently believed to be in excess of 11 $20,000,000, together with interest and attorneys’ fees as provided for under the Management and Operations Agreement. AS AND FOR A SECOND CAUSE OF ACTION FOR WRONGFUL TERMINATION AGAINST DELSHAH CAPITAL 71. Plaintiffs repeat and reallege all allegations contained in all the foregoing paragraphs of this complaint as if they were fully stated herein. 72. The Management and Operations Agreement is a valid and binding contract governing the relationship between DelShah Capital and Brandsway. 73. Levine is a named and intended third-party beneficiary of the Management and Operations Agreement. 74. On or about April 23, 2013, the Management and Operations Agreement was wrongfully terminated by DelShah Capital in contravention of the express terms of the Management and Operations Agreement. 75. DelShah Capital purported to terminate the Management and Operations Agreement “for cause” under two false premises that Brandsway and Levine: (i) failed to meet the metrics outlined in the Management and Operations Agreement; and (ii) were guilty of fraud and other bad acts. 76. Upon information and belief, Levine was wrongfully removed from Sons of Essex due predominantly for his acts to prevent ongoing theft and fraud by Shah and Jung. 77. Levine and Jung held weekly manager meetings every Tuesday. Not once was Levine’s purported failure to meet metrics ever discussed. 78. Levine, Jung and Shah held bi-weekly owners meetings on Wednesdays, and there too, not once were the finances of Sons of Essex or the repayment by Levine of any loan owed to DelShah Capital discussed. 12 79. Sons of Essex discussions consisted of praise and the growing group portfolio that Levine and Shah shared. Prior to most of the owners meetings, agendas were sent out; Levine’s metrics were never an issue on the agendas or in the meetings. 80. Accordingly, Brandsway and Levine were terminated ostensibly “for cause” from the business Levine had spent years building and cultivating. 81. In point of fact, Brandsway’s performance was exemplary as Sons of Essex was a smash hit. 82. Jung and Shah wanted Levine out in order to gain unfettered access to Sons of Essex so that they could continue to steal from it, commingle funds with the other Restaurants and Shah’s other businesses and take advantage of the tax benefits of their commingling of funds. 83. By virtue of the wrongful termination, DelShah Capital avoided having to provide to Brandsway the right of first refusal to any future deal as required by the Management and Operations Agreement. 84. The termination was pretextual and an effort to steal from Brandsway and Levine the brand and good will they had built under the terms of the Management and Operations Agreement. 85. As a result of the wrongful termination of Brandsway and Levine, they have been damaged in an amount to be determined upon the trial of this action, but currently believed to be in excess of $20,000,000, together with interest and attorneys’ fees as provided for under the Management and Operations Agreement. 13 AS AND FOR A THIRD CAUSE OF ACTION FOR FRAUD AGAINST THE DELSHAH ENTITIES, SHAH AND JUNG 86. Plaintiffs repeat and reallege all allegations contained in all the foregoing paragraphs of this complaint as if they were fully stated herein. 87. Starting in or about Spring, 2012, in an effort to induce Levine to work on various projects for the Restaurants and Catering Venues, defendants Shah and Jung represented to Levine that Shah and Levine were to become partners in a new umbrella entity under the IndieFORK name in which Shah and Levine would be 50/50 partners for all of the Restaurants and Catering Venues. 88. As a result of the representations of Shah and Jung, Levine pushed more and more business from Sons of Essex to the other venues such as Cocktail Bodega, Petaluma, 61 Gansevoort, the Meatpacking Space, and to conceptualize and market 69 Gansevoort and the Soho Space. 89. Unbeknownst to Levine, at the time Shah and Levine were supposedly 50% partners, the money earned by Brandsway and Levine at the Restaurants and Catering Venues was being commingled by the DelShah Entities with various other projects. 90. Jung constantly directed the Sons of Essex staff to direct business to Cocktail Bodega, the Soho Space, the Meatpacking Space, and Petaluma. 91. Payments made by Plaintiffs to reduce and ultimately pay-off the loan for Sons of Essex under the Management and Operations Agreement were never credited by DelShah Capital against the loan balance due and owing under the Management and Operations Agreement. 14 92. Instead, upon information and belief, the revenue generated by Brandsway and Levine was used to purchase other properties and pay off various mortgages and other debts for the Restaurants and Catering Venues. 93. The hourly pay and tips for the staff working (bartenders, bussers, runners, servers, kitchen staff, etc.) at all of these events at the Meatpacking Space would eventually be added to the employee Sons of Essex checks. Clearly, Sons of Essex was paying for staff across the entire portfolio. 94. Jung, who constantly boasted about his 17 years of accounting experience, altered the profits and expenses that were to be recorded into the profit and loss statements, by reclassifying and recoding expenses to disguise any misappropriations. 95. Jung’s acts continuously took money away from Sons of Essex, although he regularly discussed them within the “global strategy for the portfolio” essentially taking money out of Sons of Essex. 96. The extensive revenue generated by Sons of Essex and the other events that Levine obtained for the “umbrella company” were used to finance and fund all of the other restaurants including ones Levine had not conceptualized or developed yet, such as Pop Burger, including funding the personnel at these restaurants, to purchase the liquor, and to pay off commercial mortgages for other properties. Yet these expenses were booked as expenses of Sons of Essex which clearly they were not. None of these acts were authorized by Brandsway or Levine; they were solely perpetrated by Jung and Shah through the DelShah Entities. 97. Upon information and belief, Gansevoort Holdings, an entity controlled by Jung and Shah, purchased the Meatpacking Space and assumed $1.3 Million in debt as part of the purchase. 15 98. Over the course of several months, during all partner meetings, salary allocations were discussed, but never approved, as it is believed that Jung and Shah continued to steal money from the other assets, while Sons of Essex continued to pay all the salaries and avoid accounting for the moneys due to Brandsway and Levine. 99. Despite various requests by Levine, the IndieFORK compensation structure was never finalized. 100. Levine did not have access to payroll or QuickBooks; this fraud eventually came to Levine's attention after his false termination. 101. At the time such material representations were made, the representations were false and defendants the Delshah Entities, Shah and Jung knew they were false. 102. These material representations contained above were intended to and did deceive Brandsway and Levine into, inter alia, accepting various management and promotional roles and believing Levine would be provided an ownership interest in the umbrella company the parties were establishing. 103. Upon information and belief, the umbrella company concept appears to be a plan by DelShah Entities, Shah and Jung to manipulate the books and collaterally to contend that Levine did not meet the metrics set forth in the Management and Operations Agreement. 104. Plaintiffs were unaware of the falsity of the representations when they were made by Shah, Jung and relied upon those representations in accepting additional assignments from the DelShah Entities, Shah and Jung without compensation. 105. As a result of defendants DelShah Entities, Shah, Jung’s fraud and deceit as aforesaid, Brandsway and Levine are entitled to a money judgment against Shah and Jung, jointly and severally, in an amount to be determined upon the trial of this action but presently 16 believed to be in excess of $20,000,000. Brandsway and Levine’s damages will continue to accrue during the pendency of this action. AS AND FOR A FOURTH CAUSE OF ACTION FOR FRAUD AGAINST CHOUNG 106. Plaintiffs repeat and reallege all allegations contained in all the foregoing paragraphs of this complaint as if they were fully stated herein. 107. Choung at the direction of Jung forged the signature of Levine on various documents including checks and credit card applications for Cocktail Bodega and Sons of Essex. 108. At the time such material representations were made, the representations were false and defendant Choung knew they were false. 109. Choung was not authorized by Levine to sign his name on any document nor to obtain credit under Levine’s name. 110. The extent of Choung’s misappropriation of Levine’s name and likeness in order to obtain unauthorized credit is unclear to date. 111. The material representations were intended to and did deceive third parties into issuing credit to defendants Shah, Jung and Choung under Levine’s name. 112. Upon information and belief these credit transactions have and will impact Levine and Brandsway’s credit rating and reputation in the industry. 113. Moreover, although the extent of the misappropriation of funds by Jung and Choung under Brandsway and Levine is unknown, it is believed that this contributed to the overall reduction in profits of Sons of Essex. 114. Plaintiffs were unaware of the falsity of the representations when they were made by Shah, Jung and Choung and relied upon those representations in accepting additional 17 assignments from DelShah Capital, DelShah Management, Shah and Jung without compensation. 115. As a result of defendant Choung’s fraud and deceit as aforesaid, Brandsway and Levine are entitled to a money judgment against Choung, in an amount to be determined upon the trial of this action but presently believed to be in excess of $20,000,000. Plaintiffs’ damages will continue to accrue during the pendency of this action. AS AND FOR A FIFTH CAUSE OF ACTION FOR AIDING AND ABETTING FRAUD 116. Plaintiffs repeat and reallege all allegations contained in all the foregoing paragraphs of this complaint as if they were fully stated herein. 117. As set forth above, Shah, Jung and Choung committed multiple acts of fraud against Plaintiffs. 118. All of the other named defendants against whom this claim for relief is brought, V Global, 133 Essex, Black Label , 19 Stanton Street, LLC (NY), 19 Stanton Street, LLC (DE), 19 Stanton Restaurant LLC a/k/a Cocktail Bodega a/k/a Cocktail Bodega Underground, 61 Gans Restaurant, LLC, Gansevoort Holdings, Griffon 1356, LLC, Petaluma, 170 Mercer, Moon 170 Mercer, Inc., 58-60 Ninth Realty LLC, Delshah 60 Ninth LLC a/k/a Pop Burger, DelShah 60 Ninth Manager, LLC, DelShah Gansevoort 69, LLC, IF Hospitality, JCNY, LLC and Chase Bank (collectively, the “Aiders and Abettors”) had actual knowledge of these frauds. 119. The Aiders and Abettors had constructive knowledge of these frauds. 120. All Aiders and Abettors provided substantial assistance to advance the commission of the frauds. 121. Shah’s personal knowledge of the fraud is imputed to all entities he owns, operates or controls, including 133 Essex, Black Label, 19 Stanton LLC (NY), 19 Restaurant 18 LLC (DE), 19 Stanton Restaurant LLC a/k/a Cocktail Bodega a/k/a Cocktail Bodega Underground, 61 Gans Restaurant, LLC, Gansevoort Holdings, Griffon 1356, LLC, Petaluma, 170 Mercer, Moon 170 Mercer, Inc., 58-60 Ninth Realty LLC, Delshah 60 Ninth LLC a/k/a Pop Burger, DelShah 60 Ninth Manager, LLC, DelShah Gansevoort 69, LLC and IF Hospitality. 122. Jung’s personal knowledge of the fraud is imputed to all entities he owns, operates or controls, including V Global Holdings, Inc. and IF Hospitality. 123. Choung’s personal knowledge of the fraud is imputed to all entities he owns, operates or controls including JCNY LLC. 124. Shah, Jung and Choung used these entities in the course of defrauding Plaintiffs by transferring, food, liquor, personnel and monies through these entities or for their benefit. 125. Upon information and belief, the Aiders and Abettors all knowingly received fraudulent transfers of ill-gotten amounts. 126. By reason of the foregoing, the Aiders and Abettors are indebted to Plaintiffs in amount to be determined upon the trial of this action but presently believed to be in excess of $20,000,000. Plaintiffs’ damages will continue to accrue during the pendency of this action. AS AND FOR A SIXTH CAUSE OF ACTION FOR CONVERSION AGAINST SHAH, JUNG AND CHOUNG 127. Plaintiffs repeat and reallege all allegations contained in all the foregoing paragraphs of this complaint as if they were fully stated herein. 128. Upon information and belief, profits of Sons of Essex were converted by defendants Shah, Jung and Choung to pay for the debt service of the Meatpacking Space and the Catering Spaces, among other spaces referenced herein 129. Shah, Jung and Choung converted monies from Plaintiffs. 19 130. Shah, Jung and Choung failed and refused to repay these amounts, despite demand being made. 131. Defendants Shah, Jung and Choung have no legal right or titleto the converted amounts. 132. Plaintiffs have been damaged as a result of Shah, Jung and Choung’s conversions. 133. By reason of the foregoing, defendants Shah, Jung and Choung are indebted to Plaintiffs in an amount to be determined upon the trial of this action but presently believed to be