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® e 45 222
COMMONWEALTH OF MASSACHUSETTS
DEPARTMENT OF THE TRIAL COURT
HAMPSHIRE, ss. SUPERIOR COURT
C.A. No.
RICHARD M. MADOWITZ,
Plaintiff
v.
BENEDICT KOHL AND RACHEL
MERRELL AS CO-EXECUTORS OF THE
ESTATE OF DOUGLAS KOHL,
Defendants
COMPLAINT FOR DECLARATORY JUDGMENT AND REFORMATION
Plaintiff, Richard Madowitz, for his Complaint for Declaratory Judgment and
Reformation against the Defendants, states as follows:
1. Plaintiff Richard M. Madowitz is a resident of Amherst, Hampshire County,
Massachusetts.
2. Defendant Benedict Kohl is a resident of New Jersey and at all times pertinent
hereto has been a co-executor of the Estate of Douglas Kohl.
3. Defendant Rachel Merrell is a resident of Northampton, Hampshire County,
Massachusetts and at all times pertinent hereto has been a co-executor of the Estate of
Douglas Kohl.
FACTUAL BACKGROUND
4. Richard Madowitz and Douglas Kohl were longtime friends and business
associates who were two of three shareholders in Trident Realty Corp. (“Trident”).
ne SUPERIOR COURT
5. Trident owns commercial properties in Hampshire County. HAMPSHIRE SUPER co
Nov 06201
HARRY
CLERS6. Richard Madowitz had a 20% interest in Trident and Douglas Kohl had a 40%
interest.
7. In 2008, Messrs. Madowitz and Kohl executed a Stock Purchase Agreement (the
“SPA”) providing that, in the event of either of their deaths, the survivor would purchase
the deceased shareholder’s stock in Trident.
8. Douglas Kohl died unexpectedly in September, 2010. His father, Benedict Kohl,
and his wife, Rachel Merrell, were appointed co-executors of his Estate.
9. A dispute arose between Mr. Madowitz and the co-executors concerning the
nature and extent, if any, of his obligation to purchase the Estate’s stock in Trident.
10. The matter was referred to arbitration. After hearing and briefing, the arbitration
panel issued its decision.
11. In a decision dated February 12, 2015, the arbitration panel ordered that “the
shares of stock of [Trident] to be purchased by Madowitz hereunder that were previously
owned by the Estate shall be pledged to the Estate to secure payment of the Note, as
provided in Article 3 Section C of the SPA.”
12. Article 3 Section C of the SPA provided, in pertinent part, that
All of the stock in the Corporation [Trident] being purchased shall be
pledged as collateral security to the person from whom it was purchased to
secure the full payment of the principal and interest on the negotiable
promissory note which is given by the purchaser to evidence any unpaid
part of the purchase price. So long as the purchaser is not in default, the
purchaser _shall have all rights of ownership in the _purchased_stock.
including the right to vote and receive dividends on the same (emphasis
supplied).
13. In June, 2015, Mr. Madowitz proceeded in accordance with the decision of the
arbitration panel and purchased the Estate’s stock in Trident.14. As part of the purchase, Mr. Madowitz executed and delivered to the co-executors
a promissory note in the amount of $2,634,500.20 (the “Note”), together with a Pledge
Agreement securing payment of the Note (the “Pledge Agreement”), along with stock
certificates representing 200 shares of Trident capital stock (the “Pledged Securities”).
15. The Pledge Agreement is attached hereto as Exhibit A.
16. The Pledge Agreement was drafted by counsel who was familiar with both Mr.
Madowitz and the Estate.
17. In Paragraph 1(a) of the Pledge Agreement as written, Mr. Madowitz pledged to
the Estate “all proceeds of the Pledged Securities, including, without limitation, all cash,
securities or other property distributed in respect of or in exchange for any or all such
Pledged Securities...” (emphasis supplied).
18. Since it was formed, Trident from time to time has made distributions to its
shareholders.
19. Since his purchase of the Estate’s interest, Mr. Madowitz has received
distributions from Trident and has used them to help pay the amounts due under the Note.
20. On or about September 16, 2015, counsel for the Estate wrote Mr. Madowitz and
demanded that all Trident distributions be paid over to the Estate, which would hold them
in escrow pending payment in full of all obligations under the Note. A copy of that letter
is attached as Exhibit B.
21. On September 30, counsel for Mr. Madowitz responded and pointed out the
difference in the Pledge Agreement between distributions and “proceeds.” He further
pointed out the failure to include in the Pledge Agreement the language of the SPA as
incorporated by the arbitration panel (see paragraphs 11 & 12, above) was inadvertent.He offered to revise the Agreement to include this language for the sake of clarity. A
copy of the letter, with the proposed revision, is attached as Exhibit C.
22. Counsel for the Estate stated he did not agree with either point and insisted on the
escrowing of any distributions by Trident to Mr. Madowitz.
COUNT I
DECLARATORY JUDGMENT
23. Plaintiff incorporates herein as if set forth in full the allegations set forth above in
Paragraph nos. | through 22.
24. An actual controversy has arisen which requires this Court to determine the rights
and duties of the parties under the above-referenced agreement.
WHEREFORE, Plaintiff, Richard Madowitz, requests this Court to enter a decree
declaring his right to receive distributions from Trident without any need to escrow such
funds and for such other and further relief as this Court deems just and proper.
COUNT IE
REFORMATION
25. Plaintiff incorporates herein as if set forth in full the allegations set forth above in
Paragraph nos. 1 through 24.
26. To the extent the Pledge Agreement is deemed to have omitted a term required by
the award of the Arbitrators, such omission was due to a scrivener’s error and/or a
mistake, which Defendants knew or should have known had been made.
27. Equity requires that the Pledge Agreement be reformed to include the language of
Article 3 Section C of the SPA.
WHEREFORE, Plaintiff Richard Madowitz requests this Court to reform the Pledge
Agreement as required by Article 3, Section C of the SPA in the manner set forth in theproposed revision in Exhibit C, attached, and for such other and further relief as this
Court deems just and proper.
pweinberg@w-g-law.com
Weinberg & Garber, P.C.
71 King Street
Northampton, MA 01060
(413) 582-6886
fax (413) 582-6881
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® e 45 222 COMMONWEALTH OF MASSACHUSETTS DEPARTMENT OF THE TRIAL COURT HAMPSHIRE, ss. SUPERIOR COURT C.A. No. RICHARD M. MADOWITZ, Plaintiff v. BENEDICT KOHL AND RACHEL MERRELL AS CO-EXECUTORS OF THE ESTATE OF DOUGLAS KOHL, Defendants COMPLAINT FOR DECLARATORY JUDGMENT AND REFORMATION Plaintiff, Richard Madowitz, for his Complaint for Declaratory Judgment and Reformation against the Defendants, states as follows: 1. Plaintiff Richard M. Madowitz is a resident of Amherst, Hampshire County, Massachusetts. 2. Defendant Benedict Kohl is a resident of New Jersey and at all times pertinent hereto has been a co-executor of the Estate of Douglas Kohl. 3. Defendant Rachel Merrell is a resident of Northampton, Hampshire County, Massachusetts and at all times pertinent hereto has been a co-executor of the Estate of Douglas Kohl. FACTUAL BACKGROUND 4. Richard Madowitz and Douglas Kohl were longtime friends and business associates who were two of three shareholders in Trident Realty Corp. (“Trident”). ne SUPERIOR COURT 5. Trident owns commercial properties in Hampshire County. HAMPSHIRE SUPER co Nov 06201 HARRY CLERS6. Richard Madowitz had a 20% interest in Trident and Douglas Kohl had a 40% interest. 7. In 2008, Messrs. Madowitz and Kohl executed a Stock Purchase Agreement (the “SPA”) providing that, in the event of either of their deaths, the survivor would purchase the deceased shareholder’s stock in Trident. 8. Douglas Kohl died unexpectedly in September, 2010. His father, Benedict Kohl, and his wife, Rachel Merrell, were appointed co-executors of his Estate. 9. A dispute arose between Mr. Madowitz and the co-executors concerning the nature and extent, if any, of his obligation to purchase the Estate’s stock in Trident. 10. The matter was referred to arbitration. After hearing and briefing, the arbitration panel issued its decision. 11. In a decision dated February 12, 2015, the arbitration panel ordered that “the shares of stock of [Trident] to be purchased by Madowitz hereunder that were previously owned by the Estate shall be pledged to the Estate to secure payment of the Note, as provided in Article 3 Section C of the SPA.” 12. Article 3 Section C of the SPA provided, in pertinent part, that All of the stock in the Corporation [Trident] being purchased shall be pledged as collateral security to the person from whom it was purchased to secure the full payment of the principal and interest on the negotiable promissory note which is given by the purchaser to evidence any unpaid part of the purchase price. So long as the purchaser is not in default, the purchaser _shall have all rights of ownership in the _purchased_stock. including the right to vote and receive dividends on the same (emphasis supplied). 13. In June, 2015, Mr. Madowitz proceeded in accordance with the decision of the arbitration panel and purchased the Estate’s stock in Trident.14. As part of the purchase, Mr. Madowitz executed and delivered to the co-executors a promissory note in the amount of $2,634,500.20 (the “Note”), together with a Pledge Agreement securing payment of the Note (the “Pledge Agreement”), along with stock certificates representing 200 shares of Trident capital stock (the “Pledged Securities”). 15. The Pledge Agreement is attached hereto as Exhibit A. 16. The Pledge Agreement was drafted by counsel who was familiar with both Mr. Madowitz and the Estate. 17. In Paragraph 1(a) of the Pledge Agreement as written, Mr. Madowitz pledged to the Estate “all proceeds of the Pledged Securities, including, without limitation, all cash, securities or other property distributed in respect of or in exchange for any or all such Pledged Securities...” (emphasis supplied). 18. Since it was formed, Trident from time to time has made distributions to its shareholders. 19. Since his purchase of the Estate’s interest, Mr. Madowitz has received distributions from Trident and has used them to help pay the amounts due under the Note. 20. On or about September 16, 2015, counsel for the Estate wrote Mr. Madowitz and demanded that all Trident distributions be paid over to the Estate, which would hold them in escrow pending payment in full of all obligations under the Note. A copy of that letter is attached as Exhibit B. 21. On September 30, counsel for Mr. Madowitz responded and pointed out the difference in the Pledge Agreement between distributions and “proceeds.” He further pointed out the failure to include in the Pledge Agreement the language of the SPA as incorporated by the arbitration panel (see paragraphs 11 & 12, above) was inadvertent.He offered to revise the Agreement to include this language for the sake of clarity. A copy of the letter, with the proposed revision, is attached as Exhibit C. 22. Counsel for the Estate stated he did not agree with either point and insisted on the escrowing of any distributions by Trident to Mr. Madowitz. COUNT I DECLARATORY JUDGMENT 23. Plaintiff incorporates herein as if set forth in full the allegations set forth above in Paragraph nos. | through 22. 24. An actual controversy has arisen which requires this Court to determine the rights and duties of the parties under the above-referenced agreement. WHEREFORE, Plaintiff, Richard Madowitz, requests this Court to enter a decree declaring his right to receive distributions from Trident without any need to escrow such funds and for such other and further relief as this Court deems just and proper. COUNT IE REFORMATION 25. Plaintiff incorporates herein as if set forth in full the allegations set forth above in Paragraph nos. 1 through 24. 26. To the extent the Pledge Agreement is deemed to have omitted a term required by the award of the Arbitrators, such omission was due to a scrivener’s error and/or a mistake, which Defendants knew or should have known had been made. 27. Equity requires that the Pledge Agreement be reformed to include the language of Article 3 Section C of the SPA. WHEREFORE, Plaintiff Richard Madowitz requests this Court to reform the Pledge Agreement as required by Article 3, Section C of the SPA in the manner set forth in theproposed revision in Exhibit C, attached, and for such other and further relief as this Court deems just and proper. pweinberg@w-g-law.com Weinberg & Garber, P.C. 71 King Street Northampton, MA 01060 (413) 582-6886 fax (413) 582-6881