EFTA01296884

NAME SEARCHED: Neptune, LLC PWM 81S-RESEARCH performed due diligence research in accordance with the standards set by AML Compliance for your business. We completed thorough searches on your subject name(s) in the required databases and have attached the search results under the correct heading below. Significant negative media results may require escalation to senior business, Legal and Compliance management. Also, all accounts invoMng PEPs must be escalated. Search: Result: Click here for results: Reviewer Comments (as necessary): RDC * No Hit O Not Required Hit I. RDC Results No RDC alert (Please co: attached) ■ PCR No Hit O Not Required Hit II. PCR Results No PCR alert (Please sec attached) O BIS IS Yes O No Ill. Negative Media Result found(Plcase sec attached) IV. !Von-Negative Media Result found(Plcase sec attached) M Not Required V. Other Language Media There was no information found D&B Results? VI. D&H Result found(Platsc see attached) Yes • No • Not Required Smartlinx Results? 0 Yes O No VII. Smartlinx Result found(Please see attached) NI Not Required Court Cast% Review by Legal May VIII. Court Cases Result found(Plcasc sec attached) be Required O No Results O Search not requiral Prepared by: Shanu Gujaria Research Analyst Instructions: 1. Review and confirm that all results are returned for your client. 2. Please note that you are still required to perform any Martindale-Hubbell search (if applicable) on each search subject. We have attached the web link below for your convenicnce:Martindale-Ilubbellhttp://www.martindale.comisp/Martindakihome.xml 3. As needed, provide comment for any negative results. 4. If applicable, please obtain clearance from Compliance for all alerts. 5. Save any changes you make to this document and attach file to your KYC. Please note: Submission of a signed KYC is your confirmation that you have fully reviewed the research documents. Date: 06/16/2017 CONFIDENTIAL — PURSUANT TO FED. R. CRIM. P. 6(e) For internal use only CONFIDENTIAL SbNY_GM_00059700 DB-SDNY-0022524 EFTA_00170250 EFTA01296884 OFAC RESULTS RDC: 11602687 Not Alerted KYC 1790748 11602692 Not Alerted KYC 1790748 Neptune, LLC aa: Neptune, LLC Cc, J.Ir.:•. .vIRGIN ISLANDS, U.S. 'NIIi E:1' EFATE'S, PCR: C20170637909090 Neptune, LLC 62012 15544 NCA customised Closed - No Hit 16/06/2017 C20170637909089 Neptune, LLC 6201215544 NCA customised Closed - No Hit 16/06/2017 BIS RESULTS Negative Media: The Santa Fe New Mexican (New Mexico) Distributed by McClatchy-Tribune Business News September 9, 2014 Tuesday King donors' address linked to sex offender BYLINE: Steve Terrell, The Santa Fe New Mexican SECTION: STATE AND REGIONAL NEWS LENGTH: 383 words Sept. 09—Democratic gubernatorial candidate Gary King has received more than $35,000 in campaign contributions from an address in the U.S. Virgin Islands that also is listed as For internal use only CONFIDENTIAL - PURSUANT TO FED. R.CON(F IDENTIAL DB-SDNY-0022525 EFTA_00I 7025 I SDNY_GM_00059701 EFTA01296885 Page 2 King donors' address linked to sex offender The Santa Fe New Mexican (New Mexico) September 9, 2014 Tuesday the address of a convicted sex offender who years ago bought property near Stanley from King's family. Jeffrey Epstein is listed in the New York state sex offender registry as currently residing at 6100 Red Hook Quarter B3, St. Thomas Virgin Islands. He was convicted in 2008 of soliciting sex from girls as young as 14. Police said Epstein had sex with five teenagers he hired to give him massages at his Florida home. More than $30,000 in contributions listed in King's latest campaign finance report, filed Monday, came from several businesses using Epstein's address. These include $10,200 from JEGE LLC: $5,200 from Maple Inc.; and $5,000 each from FT Real Estate, Laurel Inc. and Nautilus Inc. Earlier this year, King received another contribution from a business at the same address — $5,200 from Neptune LLC. A spokesman for the King campaign said Monday, "If anything is found to be improper about any contribution, they will be returned or donated to charity." If so, it wouldn't be the first time King returned campaign money linked to Epstein. In 2006, following Epstein's arrest, Democratic politicians from Bill Richardson down to the Santa Fe County sheriff returned Epstein campaign contributions. King gave back $15,000 that an Epstein company called The Zorro Trust had contributed to his campaign for attorney general. At the time, King said, "I don't think I've ever met him personally. He knows other members of my family better." Epstein had purchased his 10,000-acre Zorro Ranch in Stanley from King's father, former Gov. Bruce King, in 1993. Then-Gov. Bill Richardson donated $50,000 in Epstein campaign contributions to charity. Epstein's 23,000-square-foot hilltop mansion, which was twice the size of the second largest home in Santa Fe County, was thought at that time to be the biggest house in the state. Contact Steve Terrell at Read his political blog at www.santafenewmexican.com/news/blogs/politics. (c)2014 The Santa Fe New Mexican (Santa Fe, N.M.) Visit The Santa Fe New Mexican (Santa Fe, N.M.) at www.santafenewmexican.com Distributed by MCT Information Services LOAD-DATE: September 9, 2014 LANGUAGE: ENGLISH ACC-NO: 20140909-SF-King-donors-address-linked-to-sex-offender-0909-20140909 PUBLICATION-TYPE: Newspaper JOURNAL-CODE: SF For internal use only SDNY_GM_00059702 CONFIDENTIAL - PURSUANT TO FED. R.QQN(F IDENTIAL DB-SDNY-0022526 EFTA_00I 70252 EFTA01296886 Page 3 King donors' address linked to sex offender The Santa Fe New Mexican (New Mexico) September 9, 2014 Tuesday Copyright 2014 The Santa Fe New Mexican Non-Negative Media: The Santa Fe New Mexican (New Mexico) Distributed by McClatchy-Tribune Business News July 4, 2014 Friday Reports show Martinez still has lopsided lead in race for campaign cash BYLINE: Steve Terrell, The Santa Fe New Mexican SECTION: NATIONAL POLITICAL NEWS LENGTH: 977 words July 04--Gov. Susana Martinez's campaign has more than 37 times more money in the bank than her Democratic opponent, Gary King, according to campaign finance reports filed Thursday. According to the reports, filed with the Secretary of State's Office, the incumbent Republican governor raised more than $869,000 in the past month and spent $860,054, which left her with more than $4.3 million in cash on hand. King, who won the five-person Democratic primary in early June, raised $320,665 - of which $200,000 came from his own pocket. He spent a little over $280,000, mostly on two television commercials, which left him with slightly more than $116,000 in the bank. While the person with the most money doesn't always win the election, the lopsided figures give Martinez a huge advantage for carrying her message to voters. And such a wide spread could discourage large out-of-state donors from contributing to King. The head of the Democratic Governors Association already has said that group won't be spending money in New Mexico. The television battle has been intense since the primary, with the Martinez campaign as well as the Republican Governors Association releasing ads bashing King, who is the state attorney general and the son of a former governor. For internal use only SDNY_GM_00059703 CONFIDENTIAL - PURSUANT TO FED. R.QQN(F IDENTIAL DB-SONY-0022527 EFTA_OOI 70253 EFTA01296887 Page 2 Reports show Martinez still has lopsided lead in race for campaign cash The Santa Fe New Mexican (New Mexico) July 4, 2014 Friday According to Martinez's reports, the campaign bought television and radio time totaling $475,327. The campaign also paid consultant Jay McCleskey's company more than $64,000 to produce the ads. In addition, a report filed Thursday by RGA New Mexico PAC, a political action committee of the Republican Governors Association, shows that group spent a total of $571,290 on ads attacking King. That's $12,650 to produce the spots and $548,040 for buying the TV time. King paid Canal Partners Media, a Georgia company, $200,000 to produce and place his ads. As has been the case in past Martinez reports, a large share of her money came from Texas. Eleven of her 15 largest contributors were from the Lone Star State. New Mexico election law limits individual campaign contributions to $5,200 for the primary and $5,200 for the general election. So this is the last report in this cycle in which contributors could give as much as $10,400 -- as long as $5,200 of it was made on or before June 3. Martinez's largest contributors all contributed on that date. Those who gave $10,400 were the Republican National Committee; Associations Inc of Dallas, a media services company; Noble Royalties, an oil and gas royalties company of Addison, Texas; Compass Royalty Management of Addison; Jay Adair of Dallas; Marcus Hiles, Chairman & CEO of Western Rim/Mansions Custom Homes in Grand Prairie, Texas, and his wife, Nancy Hiles, who listed her occupation as homemaker; George Ryan of Dallas, CEO of Ryan Separate Partnership, which is involved in real estate; the National Shooting Sports Foundation of Newton, Conn.; and Diane Wilsey, a San Francisco socialite and philanthropist. Martinez also had several $10,000 contributors: Lee Roy Mitchell of Dallas, founder of Cinemark Theaters; Eloisa Hendric, an educator in El Paso; the Border Livestock Co. of El Paso; someone listed as "Director of Mural Technologies" of El Paso; and Edgar Medina, an account executive in Glendale, Ariz. Many of the top contributors to Martinez's campaign also contributed to Susana PAC, a separate political committee run by the governors political team. Among those contributors were Hendric, Medina and the Border Livestock Co. All gave $10,000 to Susana PAC. The PAC raised $70,811, spent $20,764 and has $120,814 cash on hand. Susana PAC contributed $5,200 to Susan Riedel, the Republican candidate for attorney general; $2,700 to Secretary of State Diana Duran; and $2,575 to GOP Land Commissioner candidate Aubrey Dunn Jr. In 2012, there was a rift between the governor and Dunn because she didn't support him in his Senate race against Democrat Phil Griego. Apparently, that wound has healed. King had two $10,400 donors, rancher Ed Healy and his wife, Trudy Healy, of Taos. However, their contribution was made June 25, after the deadline. Ken Ortiz, chief of staff for the Secretary of State's Office, said Thursday, "If someone made two contributions of $5,200 after the primary, that would be $5,200 over the general election limit." For internal use only SDNY_GM_00059704 CONFIDENTIAL - PURSUANT TO FED. R.CON(F IDENTIAL DB-SDNY-0022528 EFTA_00 170254 EFTA01296888 Page 3 Reports show Martinez still has lopsided lead in race for campaign cash The Santa Fe New Mexican (New Mexico) July 4, 2014 Friday King campaign manager Keith Breitbach told The Associated Press on Thursday that he thinks the contributions are permissible because $5,200 from each went for retirement of King's debt from the primary election. King has more than $535,000 in unpaid campaign debt. King's $5,200 contributors included retired publisher Alan Webber of Santa Fe, who came in second to King in the primary. Others who gave King $5,200 were Pojoaque Gaming Inc.; the Buffalo Thunder Resort & Casino in Pojoaque Pueblo; Amelia Carson of Santa Fe; Bill King of Moriarty; HBRK Associates, a New York investment company; Neptune LLC, a Virgin Islands investment company; and Darren Indyke, a New York lawyer. King's report shows that the campaign paid Steve Verzwyvelt — his former campaign manager who only lasted two days - $7,538. Verzwyvelt was fired after a right-wing publication discovered several juvenile tweets that some women found offensive. Webber reported raising $41,263 in the last days of the primary. He spent $140,471 since the last report, leaving just over $71,00 in the bank. He still has $150,000 in unpaid campaign debt, but that is from loans from himself and his wife. Another also-ran, Lawrence Rael, raised $14,520 since the last report, spent $95,911 and has $28,094. Rael has $176,950 in unpaid debt. Contact Steve Terrell at Read his political blog at www.santafenewmexican.com/news/blogs/politics. (c)2014 The Santa Fe New Mexican (Santa Fe, N.M.) Visit The Santa Fe New Mexican (Santa Fe, N.M.) at www.santafenewmexican.com Distributed by MCT Information Services LOAD-DATE: July 7, 2014 LANGUAGE: ENGLISH ACC-NO: 20140704-SF-Reports-show-Martinez-still-has-lopsided-lead-in-race-for- campaign-cash-20140704 PUBLICATION-TYPE: Newspaper JOURNAL-CODE: SF Copyright 2014 The Santa Fe New Mexican For internal use only SDNY_GM_00059705 CONFIDENTIAL - PURSUANT TO FED. R.CON(F IDENTIAL DB-SONY-0022529 EFTA_00 170255 EFTA01296889 Page 4 United States Courts Opinions: Supreme Court of New York: Neary v Burns US Official News April 1, 2014 Tuesday Plus Media Solutions US Official News April 1, 2014 Tuesday United States Courts Opinions: Supreme Court of New York: Neary v Burns LENGTH: 6047 words DATELINE: Albany Supreme Court of New York has issued the following order: Neary v Burns 2014 NY Slip Op 24083 Decided on March 28, 2014 Supreme Court, Kings County Demarest, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and subject to revision before publication in the printed Official Reports. Decided on March 28, 2014 Supreme Court, Kings County Thomas J. Neary and Salvatore Benevento, Plaintiffs, against Arthur Burns and 2784 West 15th Street, LLC, Defendants. 6290/2011 Attorneys for Plaintiff: Thomas Torto, Esq. 419 Park Avenue South, Suite 406 New York, NY 10016 Attorney for Defendants: Michele Forzley, Esq. For internal use only SDNY_GM_00059706 CONFIDENTIAL - PURSUANT TO FED. R.CON(F IDENTIAL DB-SONY-0022530 EFTA_00 170256 EFTA01296890 Page 5 United States Courts Opinions: Supreme Court of New York: Neary v Burns US Official News April 1, 2014 Tuesday 5405 Tuckerman Lane #231 N. Bethesda, MD 20852 Carolyn E. Demarest, J. In this action by plaintiffs Thomas J. Neary (Neary) and Salvatore Benevento (Benevento) (collectively, plaintiffs) against defendants 2784 West 15th Street, LLC (2784 LLC) and Arthur Burns (Burns), Burns moves for an order, pursuant to CPLR 3211, dismissing plaintiffs' complaint in its entirety, and awarding him full reimbursement of his legal fees and costs. BACKGROUND Salvatore Judice (Mr. Judice) was the owner of two parcels of real property. One of these parcels is located at 2776, 2778, and 2784 West 15th Street, in Brooklyn (Block 8996, Lots 89, 91, and 92) (the 2784 premises), and the other parcel is at located at 363-367 Neptune Avenue, in Brooklyn (the Neptune Avenue premises). The Neptune Avenue premises consists of two buildings with six units in each of them. When Mr. Judice died in 1973, he left the 2784 premises and the Neptune Avenue premises to his five children, i.e., Grace Burns (Grace), Anna Neary (Anna), Lucy Judice (Lucy), John E. Judice (John), and Julia J. Benevento (Julia), and, by subsequent deeds, both of these premises were conveyed to them as tenants in common. Plaintiffs Neary and Benevento have resided virtually their entire lives in residential apartments in the building at 367 Neptune Avenue within the Neptune Avenue premises as rent-stabilized tenants. Anna died in 1987, and she left her estate to her husband, Thomas J. Neary, Sr. (Thomas), who died on August 2, 2004. Thomas' estate passed to plaintiff Thomas Neary, Salvatore Neary (Salvatore), and Mary Ann Peraccio (Mary Ann), who thereby inherited Thomas' ownership interest both in the 2784 premises and the Neptune Avenue premises. In 2006, the family members that held interests in the 2784 premises and the Neptune Avenue premises agreed to form two limited liability companies (LLCs), i.e., 2784 LLC and 363-367 Neptune Avenue. LLC (Neptune LLC), to which their respective interests in these properties would be transferred, with Ray McRory, Esq. acting as their attorney. On November 10, 2006, the Operating Agreement of 2784 LLC was executed by its initial members, who were listed as: Grace (by Burns, as her attorney-in-fact), Julia (by Benevento, as her attorney-in-fact), Neary, Salvatore, and Mary Ann. An almost identical Operating Agreement of Neptune LLC was also executed by these members on the same date. The members conveyed their interests in the 2784 premises to 2784 LLC and their interests in the Neptune Avenue premises to Neptune LLC. Pursuant to the Operating Agreements, Burns was named the manager of both LLCs. Thereafter, John died on March 28, 2007 and his estate passed to Carmel Salerno, Patricia Judice, Joanne Judice Rafaella, and Salvatore Judice (Judice). The Estate of John ['2]conveyed its interests in the 2784 premises and the Neptune Avenue premises to the two LLCs. Lucy Judice died without having children, and her estate conveyed its interest in the 2784 premises and the Neptune Avenue premises to the two LLCs. To reflect these changes, on November 1, 2007, an Amended and Restated Operating Agreement for 2784 LLC was executed by all of the initial members, and by the Estate of John (by Judice, as the executor), as a new member. Schedule A to 2784 LLC's Operating Agreement For internal use only SDNY_GM_00059707 CONFIDENTIAL - PURSUANT TO FED. R.CON(F IDENTIAL DB-SDNY-0022531 EFTA_00I 70257 EFTA01296891 Page 6 United States Courts Opinions: Supreme Court of New York: Neary v Burns US Official News April 1, 2014 Tuesday (annexed as exhibit 2 to Burns' motion papers) lists the voting percentage interests of its members as being: 44.8% for the Estate of John, 18.4% for Grace, 18.4% for Julia, and 18.4% for the Neary Group, consisting of three listed members, i.e., Neary, Salvatore, and Mary Ann. At some time prior to 2011, Julia died, and her estate passed to her two sons, Benevento and Anthony Bevent (Anthony), in equal shares, pursuant to a will which also named them as co-executors. In April 2009, members of Neptune LLC were requested to vote on a proposal to sell the Neptune Avenue premises. Benevento (on behalf of the Estate of Julia) and Neary voted no to this proposal. By a letter dated April 21, 2009, the members of Neptune LLC were informed that on April 20, 2009, 73.3% of the Neptune LLC's membership had voted in favor of this proposal, and that, as a result, Burns was authorized to sell the Neptune Avenue premises at the highest and best price possible and to take any necessary steps to do so, including vacating all tenants from such premises. In September 2009, Burns, on behalf of 2784 LLC, executed a purchase agreement to sell the 2784 premises to M & A Realty Services, LLC for a sales price of $1,050,000. In 2010, the 2784 premises were sold with the purchase price for this sale paid in cash and by a purchase money mortgage. Prior to the sale, 2784 LLC's members signed a Certificate of Members of 2784 LLC Resolution to Sell Real Property (the Certificate) in accordance with section 3.4 of the Operating Agreement, which required that the manager have prior written approval of a majority vote of all members in order to sell the 2784 premises. The Certificate was signed by the Estate of John (by Judice), Grace (by Burns, as her attorney- in-fact), the Estate of Julia (by Anthony), and the Neary Group (by Mary Ann, as the authorized representative), and reflected their respective interests in 2784 LLC of 44.8% for the Estate of John, 18.4% for Grace, 18.4% for the Estate of Julia, and 18.4% collectively for the Neary Group. Using the funds obtained from this sale of the 2784 LLC premises, Burns, as the manager of 2784 LLC, gave a mortgage and loan from it to Neptune LLC for $250,000 at five percent interest with a mortgage on the Neptune Avenue premises to be paid when these premises are sold. These monies were allegedly used to buy out the non-family tenants of the Neptune Avenue premises so as to have them vacate their apartments there. On August 13, 2010, an action was filed by Neptune LLC against Neary, Benevento, Carmel Salerno (Carmel), and the Estate of Julia (363-367 Neptune Avenue, LLC v Neary, Sup Ct, Kings County, index No. 9282/10) (the Neptune Avenue action) for a judgment requiring Neary, Benevento, and Carmel to vacate their apartments, requiring (*3]the Estate of Julia to take action to remove Neary, Benevento, and Carmel from such apartments, and awarding damages in the sum of $108,000 against Neary, $216,000 against Benevento, and $324,000 against Carmel due to their failure to vacate. In the Neptune Avenue action, Neary and Benevento asserted that Burns had harassed them, refused to make repairs to the building, and denied them essential services in an effort to make the building uninhabitable so that they would be forced to vacate it. Neptune LLC, in that action, contended that it was entitled to sell and vacate the Neptune Avenue premises pursuant to the Operating Agreement for Neptune LLC. By a decision and order dated December 15, 2010. Justice Mark I. Partnow denied a motion by Neptune LLC to require Neary, Benevento, and Carmel to vacate the Neptune Avenue premises, finding that while For internal use only SDNY_GM_00059708 CONFIDENTIAL - PURSUANT TO FED. R.CON(F IDENTIAL DB-SDNY-0022532 EFTA_00I 70258 EFTA01296892 Page 7 United States Courts Opinions: Supreme Court of New York: Neary v Burns US Official News April 1, 2014 Tuesday Neptune LLC could elect to dissolve and sell the premises pursuant to the majority vote of its members, it could not evict Neary, Benevento, and Carmel and was required to sell the Neptune Avenue premises subject to their rent-stabilized leases. In December 2010, Burns resigned as the manager of 2784 LLC, and Judice is now its current manager. Burns claims that he and now Judice have been distributing 2784 LLC funds from the sale of the 2784 premises pro rata to the members after enough cash is accumulated and obligations paid, and that plaintiffs admit that they received distributions as members. The Neptune Avenue premises have not yet been sold and Benevento and Neary remain in occupancy as tenants there. On March 18, 2011, plaintiffs filed the instant action, which initially named 2784 LLC and Burns, along with McRory and McRory, PLLC and Raymond McRory, Esq. (collectively, the McRory defendants), as defendants. On May 2, 2011, plaintiffs served a complaint, and, on May 16, 2011, plaintiffs served an amended verified complaint as of right pursuant to CPLR 3025 (a). Plaintiffs' amended complaint alleged that Burns, acting on behalf of 2784 LLC and his own personal interests, unilaterally and improperly diverted funds belonging to 2784 LLC for purposes unrelated to it, including making payments in excess of $200,000 to buy out the tenants who resided in the building at the Neptune Avenue premises, and making payments of legal fees to the McRory defendants unrelated to 2784 LLC. It further alleged that Burns, acting on behalf of 2784 LLC and his own personal interests, unilaterally and improperly withheld from the net proceeds realized from the sale of the 2784 premises distributions due to them because they had not vacated their rent- stabilized apartments at the Neptune Avenue premises. Specifically, plaintiffs alleged that Burns withheld the sum of approximately $40,000 (as of the date of the amended complaint) in partial distributions due to them from the sale of the 2784 premises. Plaintiffs asserted that Burns, as the manager of 2784 LLC, owed them a fiduciary duty as members of 2784 LLC. Plaintiffs' amended complaint alleged three causes of action. Plaintiffs' first cause of action against Burns and 2784 LLC sought an accounting of the affairs and monies of 2784 LLC. Plaintiffs' second cause of action against Burns alleged that Burns diverted monies belonging to 2784 LLC and withheld distributions due to them from the sale of rtlithe 2784 premises, which constituted a breach of his fiduciary duties to them. It sought a judgment surcharging Bums in the amounts which are determined to be improperly diverted, converted, and/or misappropriated. Plaintiffs' third cause of action against the McRory defendants sought a judgment requiring them to disgorge all legal fees paid to them by 2784 LLC which were unrelated to 2784 LLC. On September 15, 2011, Burns served an answer to plaintiffs' amended complaint, which denied its material allegations and raised four affirmative defenses. Burns' first affirmative defense alleged that plaintiffs' amended complaint fails to state a cause of action. Burns' second affirmative defense alleged that the court should not proceed in the absence of persons who should be parties. Burns' third affirmative defense alleged that Benevento has no standing and is not a proper party to this action as he is a co-executor acting without authority in relation to the Estate of Julia, who was the member of 2784 LLC, and that Neary has no standing and is not a proper party to this action as he is a member of a group called the Neary Group that is the member of 2784 LLC. Bums' third affirmative For internal use only SDNY_GM_00059709 CONFIDENTIAL - PURSUANT TO FED. R.QQN(F IDENTIAL DB-SDNY-0022533 EFTA_00 170259 EFTA01296893 Page 8 United States Courts Opinions: Supreme Court of New York: Neary v Burns US Official News April 1, 2014 Tuesday defense further alleged that plaintiffs' amended complaint should be dismissed for failure to join indispensable parties. Burns' fourth affirmative defense alleged that the court lacks subject matter jurisdiction over plaintiffs' claims. Following discussions with the attorneys for the McRory defendants and limited document production by them, plaintiffs, by a Stipulation of Discontinuance dated January 27, 2012, discontinued this action as against the McRory defendants. On February 23, 2012, Grace (who, as noted above, was Burns' mother and a member of 2784 LLC) died at the age of 99 years. By notice of motion dated March 6, 2013, plaintiffs moved for a default judgment, pursuant to CPLR 3215, against 2784 LLC. On April 4, 2013, plaintiffs withdrew that motion and extended the time for 2784 LLC to serve an answer to their amended complaint in exchange for its production of bank statements for its checking account, which 2784 LLC produced in or about the end of May 2013. 2784 LLC has not yet interposed an answer to plaintiffs' amended complaint. On June 28, 2013, Burns produced some documents in response to a February 25, 2013 notice to produce for discovery and inspection which was served by plaintiffs. Plaintiffs assert that their review of 2784 LLC's bank statements and other documents produced in this action have revealed that they have direct claims against Burns and 2784 LLC for the alleged wrongful withholding from them of over $80,000 in distributions due to them from the net sale proceeds from the 2784 premises. On September 11, 2013, plaintiffs moved for leave to serve an amended summons and second amended verified complaint. Plaintiffs sought to amend the summons and first amended complaint to delete the McRory defendants from the caption and to remove the cause of action asserted as against them to reflect their voluntary discontinuance of all claims against them. Plaintiffs further sought to amend the first amended complaint in order to limit it to direct claims against 2784 LLC and Burns solely for wrongfully ["5]withholding from them over $80,000 in distributions due to them from the net sale proceeds from the 2784 premises. Plaintiffs' second amended verified complaint (annexed as exhibit A to plaintiffs' motion papers in motion sequence number 2) alleges that Neary is a member of 2784 LLC, having a 6.133% ownership interest therein. It further alleges that Benevento has a 9.2% beneficial interest in 2784 LLC through the Estate of Julia, who was a member of 2784 LLC, having a 18.4% ownership interest therein, and that Benevento was and is the co- executor of the Estate of Julia and is entitled to 50% of Julia's estate. Plaintiffs' second amended complaint sets forth that on January 20, 2010, 2784 LLC, under the sole and exclusive management of Burns, sold the 2784 premises to M & A Realty Services, LLC for the sum of $1,050,000. It alleges that as of January 22, 2010, the sum of $544,018.29 was available for distribution to 2784 LLC members from the net proceeds of the sale of the 2784 premises, and that, as of March 9, 2010, distributions of the net proceeds from the sale of the 2784 premises were made to 2784 LLC members, including distributions paid directly to Neary and Benevento, as members. It asserts that Burns, in breach of independent fiduciary duties he owed to Neary and Benevento in their own, individual capacities, unilaterally and wrongfully withheld from them their fair share of For internal use only SDNY_GM_00059710 CONFIDENTIAL - PURSUANT TO FED. R.QQN(F IDENTIAL DB-SDNY-0022534 EFTA_OOI 70260 EFTA01296894 Page 9 United States Courts Opinions: Supreme Court of New York: Neary v Burns US Official News April 1, 2014 Tuesday distributions due to them from the net proceeds of this sale in violation of the Operating Agreement and applicable Limited Liability Company Law. Specifically, it alleges that Burns withheld from these sale proceeds the sum of $35,745.83 from Neary and the sum of $44,831.58 from Benevento. Plaintiffs' second amended complaint alleges three causes of action. Plaintiffs' first cause of action against 2784 LLC alleges that 2784 LLC is in possession and control of the funds wrongfully withheld from them by Burns from their share of distributions of the net sale proceeds of the 2784 premises in violation of the Operating Agreement and applicable law, and that they have been damaged in the total sum of $80,577.41, plus interest from March 9, 2010. Plaintiffs' second cause of action alleges a direct claim by Neary against Bums, which asserts that Burns owed an independent fiduciary duty to Neary, as a member of 2784 with a 6.133% ownership interest, that Burns wrongfully withheld the sum of $35,745.83 from his share of distributions from the net proceeds of the sale of the 2784 premises, and that he is entitled to a judgment in this sum. Plaintiffs' third cause of action alleges a direct claim by Benevento against Burns, which asserts that Burns owed an independent fiduciary duty to Benevento as a member of 2784 LLC with a 9.2% ownership interest and/or as the holder of a 9.2% beneficial interest in 2784 LLC through the Estate of Julia, that Burns wrongfully withheld the sum of $44,831.58 from his share of distributions from the net proceeds of the sale of the 2784 premises, and that he is entitled to a judgment in this sum. On October 24, 2013, Burns filed his instant motion for an order dismissing plaintiffs' amended verified complaint. In his motion papers, Bums opposed plaintiffs' r6]motion to amend and sought an order denying plaintiffs' motion.[FN1] 2784 LLC has not submitted any papers with respect to Burns' motion, and it took no position at oral argument In support of their motion to amend, plaintiffs maintained that their proposed amendment was meritorious since they were entitled to their full share of distributions from these sale proceeds and that the withholding of over $80,000 from their distributions was wrongful and improper. Moreover, no prejudice was demonstrated by Burns with respect to the proposed amendment since it simply streamlines plaintiffs' amended complaint and does not assert any new facts or causes of action against Bums. In addition, there could be no prejudice to 2784 LLC since, as noted above, it has not as yet served an answer in this action, and prejudice to warrant denial of leave to amend requires some indication that the defendants were hindered in the preparation of their case or were prevented from taking some measure in support of their position (see McGhee v Odell, 96 AD3d 449, 450 [1st Dept 2012]; Kocourek v Booz Allen Hamilton Inc., 85 AD3d 502, 504 [1st Dept 2011]). Furthermore, while there was a two-year delay by plaintiffs in seeking such leave, discovery is ongoing, and depositions have not yet been held (see Rosicki, Rosicki & Assoc., P.C. v Cochems, 59 AD3d 512, 514 [2d Dept 2009]). Thus, since a motion for leave to amend a complaint should be freely granted, absent prejudice or surprise directly resulting from the delay in seeking leave, unless the proposed amendment is palpably insufficient or patently devoid of merit (see CPLR 3025 [b]; Aurora Loan Servs., LLC v Thomas, 70 AD3d 986, 987 [2d Dept 2010]; Lucido v Mancuso, 49 AD3d 220, 222 [2d Dept 2008], appeal withdrawn 13 NY3d 813 [2009]), and, here, the proposed amendment was not palpably insufficient or patently devoid of merit and there For internal use only SDNY_GM_00059711 CONFIDENTIAL - PURSUANT TO FED. R.CON(F IDENTIAL DB-SONY-0022535 EFTA_00170261 EFTA01296895 Page 10 United States Courts Opinions: Supreme Court of New York: Neary v Burns US Official News April 1, 2014 Tuesday was also no showing of prejudice or surprise resulting directly from plaintiffs' delay in seeking leave, the court, at oral argument held on November 20, 2013, granted plaintiffs' motion for leave to file their second amended verified complaint. While Burns' motion was originally directed as against plaintiffs' first amended complaint, since the court has granted plaintiffs' motion to amend their first amended complaint during the pendency of Burns' motion, the court will address this motion as against plaintiffs' second amended complaint (see 49 W. 12 Tenants Corp. v Seidenberg, 6 AD3d 243, 243 [1st Dept 2004]; Livadiotakis v Tzitzikalakis, 302 AD2d 369, 370 [2d Dept 2003]; Sage Realty Corp. v Proskauer Rose, 251 AD2d 35, 38 (1st Dept 1998]). DISCUSSION In support of his instant motion, Bums argues that this action must be dismissed based upon plaintiffs' lack of standing to sue. CPLR 3211 (a) (3) provides for dismissal [*7]of an action where "the party asserting the cause of action has not legal capacity to sue." CPLR 3211(a) (3) also embraces the ground of the lack of standing to sue, and this statute is, therefore, available to support a motion to dismiss on this ground (see Hecht v Andover Assocs. Mgt. Corp., 2014 NY Slip Op 0063, *2 (2d Dept 2014]). Burns, in arguing that plaintiffs lack standing to sue, relies upon the third affirmative defense in his answer to the first amended complaint and contends that plaintiffs are not proper parties and lack standing to sue 2784 LLC and him, as its former manager, because they are allegedly not members of 2784 LLC in their individual capacities. Burns argues that Neary is not a proper party and lacks standing to sue because the member of 2784 LLC is the Neary Group, as opposed to Neary. He points to Schedule A of the Operating Agreement (exhibit 2 to his motion papers), which lists the Neary Group as consisting of three members with a 18.4% voting percentage interest, and the footnote to that Schedule which states that the three Nearys (Weary, Salvatore, and Mary Ann) have each contributed 100% of their respective undivided interest as tenants in common in the 2784 premises to 2784 LLC, and that "[t]he Neary Group owns an 18.4% Member Interest as a group," and "has appointed Mary Ann . . . to represent them in voting their total 18.4% Voting Percentage Interest until otherwise notified in writing by them." Burns' argument must be rejected. The membership interest of the Nearys was referred to as the Neary Group simply because their interest in the 2784 premises derived from Anna and thereafter passed to Neary and his two siblings, which formed the Neary Group. The mere fact that Neary permitted Mary Ann to vote the collective 18.4% of the Neary Group does not negate Neary's status as an individual member of 2784 LLC in his own individual right with a 6.1333% (one-third of 18.4%) ownership interest. Indeed, Schedule A of the Operating Agreement lists Neary separately as a "Member" and sets forth his residence address and social security number. In fact, Neary was an initial member of 2784 LLC at the time of its formation in 2006, and he signed the initial Operating Agreement and the Amended and Restated Operating Agreement as an "Initial Member' (see exhibit A to plaintiffs' opposition papers). Additionally, Neary, by an e-mail dated February 24, 2010 (exhibit C to plaintiffs' opposition papers), gave Burns written notice of his intent to vote his own 6.133% membership interest separately. Thus, Neary has established that he is, in fact, an individual member of 2784 LLC and entitled to maintain this action in his own right without the joinder of the other members of the Neary Group. For internal use only SDNY_GM_00059712 CONFIDENTIAL - PURSUANT TO FED. R.QQN(F IDENTIAL DB-SDNY-0022536 EFTA_00 170262 EFTA01296896 Page 11 United States Courts Opinions: Supreme Court of New York: Neary v Burns US Official News April 1, 2014 Tuesday Burns further asserts that Benevento is not a member of 2784 LLC, but, rather, the member is the Estate of Julia. He argues that Benevento cannot claim a payment allegedly due to the Estate of Julia. He states that while Benevento is a co-executor of the Estate of Julia, he is not acting on behalf of the Estate with his brother, Anthony, who is the co- executor. This argument by Burns is unavailing since Benevento is not making a claim on ralbehaff of the Estate of Julia, but in his own right as the holder of a beneficial interest of 9.2% of 2784 LLC. Benevento does not seek to recover sums due to the Estate of Julia. Rather, he seeks to recover distributions from the sale of the 2784 premises owed to him individually which, he claims, Burns wrongfully withheld from him by making deductions to his share of such sale proceeds because he resides as a rent-stabilized tenant at the Neptune Avenue premises. This claim belongs to Benevento and is not shared by Anthony, the other beneficiary and the co-executor of the Estate of Julia, who is not a tenant at the Neptune Avenue premises and received his full share of such proceeds without any deductions. Thus, Benevento, and not the Estate of Julia, is the real party in interest in this litigation.Moreover, it is undisputed that Benevento is the transferee of one-half of the interest held by Julia, and, thus, the holder of a "beneficial interest" in 2784 LLC. Such a beneficial interest has been recognized as conferring standing upon a party to bring a derivative action on behalf of a corporation pursuant to Business Corporation Law § 626 (a) (see Bernfeld v Kurilenko, 91 AD3d 893, 894 [2d Dept 2012]; Shui Kam Chan v Louis, 303 AD2d 151, 152 [1st Dept 2003]), which has been held applicable to limited liability companies (see Tzolis v Wolff, 10 NY3d 100, 121 [2008]). While this is not a derivative action, this beneficial interest likewise furnishes a basis for Benevento's individual claims against 2784 LLC and Burns, and the fact that Benevento obtained his interest through the Estate of Julia does not deprive him of standing in this action (see Bernfeld, 91 AD3d at 894). Furthermore, Burns previously recognized and acknowledged both Neary and Benevento as members of 2784 LLC. An e-mail by Burns dated February 9, 2009 (exhibit B to plaintiffs' opposition papers) stated that "the three Nearys . . . are direct owners" of 2784 LLC. An e-mail by Burns dated February 22, 2010 (exhibit 6 to Burns' motion papers) regarding distributions sent to Neary and Benevento inquired as to "[h]ow do the Nearys want their checks" and whether they wanted "[o]ne to Mary Ann or 1/3 to each sib[ling]." Burns, in this e-mail, further inquired as to how he should distribute Julia's funds, noting that the checks would have to be made out to her Estate, and he asked whether he should issue two checks, or one each with the co-executors name also on the check. He additionally stated, in this e-mail, that he "only want[ed] to hear from members," that "title Nearys should elect if they want to vote as a group or individually," and that the Beneventos will have to decide themselves." By an e-mail dated February 24, 2010 (exhibit C to plaintiffs' opposition papers), Neary responded that he wanted the check issued to him. Significantly, plaintiffs point out that Bums has already issued separate checks to them in payment of their distributions of the net sale proceeds, and that they are now simply complaining that they did not receive the full amount due to them. Burns, in paragraph 17 of his attorney's affirmation in support of his motion, admits that plaintiffs have "received distributions." Thus, by such distributions, Bums has acknowledged Neary's membership For internal use only SDNY_GM_00059713 CONFIDENTIAL - PURSUANT TO FED. R.CON(F IDENTIAL DB-SONY-0022537 EFTA_00170263 EFTA01296897 Page 12 United States Courts Opinions: Supreme Court of New York: Neary v Burns US Official News April 1, 2014 Tuesday interest and Benevento's beneficial membership in 2784 LLC and [*9]their rights to receive such distributions. Notably, in the December 15, 2010 decision and order in the Neptune Avenue action, Justice Partnow previously acknowledged that Neary is a member of Neptune LLC and that Benevento has a beneficial interest in Neptune LLC. Burns. in his attorney's affirmation, has admitted that both Neptune LLC and 2784 LLC "have identical members with only a slight difference in percentage ownership." Therefore, it follows that Neary is a member of 2784 LLC in his own right in the same way that he is a member of Neptune LLC, and that Benevento holds a beneficial interest in 2784 LLC in his own right in the same way that he holds a beneficial interest in Neptune LLC. Thus, Neary and Benevento do not lack standing to maintain this action. Dismissal of this action, pursuant to CPLR 3211 (a) (3), must, therefore, be denied. Burns further contends that plaintiffs have failed to join the other members of 2784 LLC and that, therefore, this action must be dismissed, pursuant to CPLR 3211 (a) (10), which provides for the granting of dismissal of a claim against a party based upon the ground that "the court should not proceed in the absence of a person who should be a party." This contention by Burns is devoid of merit since plaintiffs' second amended complaint asserts direct claims by plaintiffs to recover for distinct injuries that they individually sustained by Burns' alleged wrongful withholding of their proportionate share of distributions of the net proceeds from the sale of the 2784 premises. Plaintiffs are thus alleging claims based upon the breach of a duty owed directly to them, independent of any duty owed to 2784 LLC or any of its other members (see generally Abrams v Donati, 66 NY2d 951, 953 [1985], rearg denied 67 NY2d 758 [1986]; Behrens v Metropolitan Opera Assn., Inc., 18 AD3d 47, 50 (1st Dept 2005]; Lawrence Ins. Group, Inc. v KPMG Peat Marwick LLP, 5 AD3d 918, 919 [3rd Dept 2004]). Plaintiffs do not seek to recover any sums that may be due to the other members of 2784 LLC or for any damage to 2784 LLC. Plaintiffs' claims relate only to their own direct claims as against Burns and 2784 LLC and, as a result, do not require the joinder of the other members of 2784 LLC. Consequently, dismissal of plaintiffs' action for failure to join necessary parties must be denied. Burns also contends that this action must be dismissed, pursuant to CPLR 3211 (a) (7), based upon plaintiffs' failure to state a cause of action. "It is well settled that, as a general rule, on a motion to dismiss the complaint for failure to state a cause of action under CPLR 3211 (a) (7), the complaint must be construed in the light most favorable to the plaintiff" (Gruen v County of Suffolk, 187 AD2d 560, 562 [2d Dept 1992]; see also Rosen v Watermill Dev. Corp., 1 AD3d 424, 425 [2d Dept 2003]), and the pleading is to be afforded a liberal construction (CPLR 3026). The court must also accept the facts as alleged in the complaint and submissions in opposition to the motion as true and accord the plaintiff "the benefit of every possible favorable inference" (Sokoloff v Harriman Estates Dev. Corp., 96 NY2d 409. 414 [2001]; see also Thomas v LaSalle Bank N.A., 79 [*10]AD3d 1015, 1017 [2d Dept 2010]). The court, in accepting the facts alleged in the complaint to be true, must " determine only whether the facts alleged fit within any cognizable legal theory"' (Ruffino v New York City Tr. Auth., 55 AD3d 817, 818 [2d Dept 2008], quoting Morris v Morris, 306 AD2d 449, 451 [2d Dept 2003]; see also Hurrell-Harring v State of New York, 15 NY3d 8, 20 [2010]; Goldman v Metropolitan Life Ins. Co., 5 NY3d 561, 570-571 [2005]). For internal use only SDNY_GM_00059714 CONFIDENTIAL - PURSUANT TO FED. R.QQN(F IDENTIAL DB-SDNY-0022538 EFTA_OOI 70264 EFTA01296898 Page 13 United States Courts Opinions: Supreme Court of New York: Neary v Burns US Official News April 1, 2014 Tuesday Burns argues that plaintiffs have failed to state a cause of action because there was no wrongdoing by him. Burns' attorney asserts that Bums sent e-mails discussing at length that 2784 LLC would give a loan to Neptune LLC and that this loan was authorized by the members. She further asserts that there is no damage to any member because the $250,000 loaned by 2784 LLC is earning interest at five percent and is secured by the real estate, and that when the Neptune Avenue premises are sold, the mortgage will be paid to 2784 LLC with interest and all of the members of both 2784 LLC and Neptune LLC will receive their pro rata shares. She also states that plaintiffs received payments at the same time and "in pro rata amounts as the other members." The second amended complaint, however, does not challenge the $250,000 loan made by 2784 LLC to Neptune LLC and does not allege that the sale of the 2784 premises was unauthorized. Rather, plaintiffs assert that Burns wrongfully deprived them of their fair share of the distributions from the net proceeds of the sale of these premises. Specifically, plaintiffs contend that Burns unilaterally and wrongfully withheld sums from their individual distributions because of their refusal to vacate their rent-stabilized apartments at the Neptune Avenue premises. Plaintiffs have annexed a letter by Burns dated March 9, 2010 (exhibit E to plaintiffs' opposition papers), which establishes that Burns, referring to Benevento and Neary's apartments at the Neptune Avenue premises, unilaterally deducted from their individual distributions of the net sale proceeds of the 2784 premises that were issued by 2784 LLC in March 2010, amounts for "disparate benefits" that Burns claims they received by virtue of their rent-stabilized tenancies at the Neptune Avenue premises. This letter shows that in contrast to the distributions to plaintiffs, these sums were not deducted from the distributions received by the other two Neary members (Salvatore and Mary Ann), Anthony (Benevento's brother), or Grace, who were paid their distributions in full. Burns further argues that he should be absolved from liability pursuant to article 4.5 of the Operating Agreement (exhibit 7 to Burns' motion papers), which provides as follows: "A Manager shall not be personally liable to the Company or its Members for damages for any breach of duty as a Manager, except for any matter in respect to which such Manager shall be liable by reason that, in addition to any and all other requirements for such liability, there shall have been a judgment or other final adjudication adverse to such ["11]Manager that establishes that such Manager's acts or omissions were in bad faith or involved intentional misconduct or a knowing violation of law or that such Manager personally gained in fact a financial profit or other advantage to which such Manager was not legally entitled or that with respect to a distribution the subject of Section 508 of the [Limited Liability Company Law], such Manager's acts were not performed in accordance with Section 409 of the [Limited Liability Company Law] . . ." Limited Liability Company Law § 508 refers to limitations on distributions to members. Limited Liability Company Law § 409 (a) provides that "[a] manager shall perform his or her duties as a manager, including his or her duties as a member of any class of managers, in good faith and with that degree of care that an ordinarily prudent person in a like position would use under similar circumstances." Burns contends that he did not act in bad faith or engage in intentional misconduct. However, plaintiffs' allegations, which must be deemed true for purposes of this motion, For internal use only SDNY_GM_00059715 CONFIDENTIAL - PURSUANT TO FED. R.CON(F IDENTIAL DB-SDNY-0022539 EFTA_00I 70265 EFTA01296899 Page 14 United States Courts Opinions: Supreme Court of New York: Neary v Burns US Official News April 1, 2014 Tuesday sufficiently allege such bad faith, asserting that Burns acted "maliciously, wrongfully, and unlawfully," and in breach of his fiduciary duties. Thus, despite Burns' attorney's argument that Burns acted properly, questions of fact are raised as to this issue. Burns additionally argues that he is entitled to be indemnified and reimbursed for the expenses which he has incurred related to this litigation pursuant to article 4.7 of the Operating Agreement (exhibit 7 to Burns' motion papers), which provides that "[t]he Company shall indemnify and hold harmless each Manager and the Members from and against all claims and demands to the maximum extent permitted under the [Limited Liability Company Law]." Burns requests that his motion "serve as a cross claim" against 2784 LLC for his legal fees and indemnification pursuant to article 4.7 of the Operating Agreement. Such a request is procedurally improper. Burns has not yet interposed an answer to plaintiffs' second amended complaint nor did he include a cross claim against 2784 LLC for indemnification in his answer to plaintiffs' first amended complaint. Moreover, there has been no final adjudication on the issue of whether Bums breached his duties under the Operating Agreement, and such a finding would defeat his claim for indemnification pursuant to Limited Liability Company Law § 420, which provides as follows: "Subject to the standards and restrictions, if any, set forth in its operating agreement, a limited liability company may, and shall have the power to, indemnify and hold harmless, and advance expenses to, any member, manager or other person, or any testator or intestate of such member, manager or other person, from and against any and all claims and demands r121whatsoever; provided, however, that no indemnification may be made to or on behalf of any member, manager or other person if a judgment or other final adjudication adverse to such member, manager or other person establishes (a) that his or her acts were committed in bad faith or were the result of active and deliberate dishonesty and were material to the cause of action so adjudicated or (b) that he or she personally gained in fact a financial profit or other advantage to which he or she was not legally entitled." Consequently, Burns' request for indemnification and reimbursement under the Operating Agreement must be denied as premature (see Limited Liability Company Law § 420). CONCLUSION Accordingly, Bums' motion is denied in its entirety. This constitutes the decision and order of the court. ENTER, J. S. C. Footnotes Footnote 1:Subsequent to oral argument, the court received a purported "reply" to Bums' motion to dismiss which included further opposition to plaintiffs' proposed amendment to their amended complaint. These papers have been rejected by the court and have not been considered (see CPLR 2214 [b], [c]). For internal use only SDNY_GM_00059716 CONFIDENTIAL - PURSUANT TO FED. R.CON(F IDENTIAL DB-SDNY-0022540 EFTA_00 170266 EFTA01296900 Page 15 United States Courts Opinions: Supreme Court of New York: Neary v Burns US Official News April 1, 2014 Tuesday For further information please visit: http://www.nycourts.gov/ LOAD-DATE: April 2, 2014 LANGUAGE: ENGLISH PUBLICATION-TYPE: Newswire Copyright 2014 Plus Media Solutions Private Limited All Rights Reserved Other Language Media: There was no information found Public Records: 1 OF 4 RECORD(S) Comprehensive Business Report Report Created:6-15-2017 6.30 PM EST I FOR INFORMATIONAL PURPOSES ONLY I Copyright O 2017 LexisNexis, All rights reserved. Search Terms - company(Neptune, LLC)tin(45-4093384) radius(15) Executives - Current (7) Incorporation/SOS (3) Operations/Sites (12) Sales (0) Licenses (1) URLs (1) Real Property - Current (1) Real Property • Prior (7) MVRs - Current (0) MVRs - Prior (0) Watercraft - Current (0) Watercraft - Prior (0) Aircraft - Current (0) Aircraft • Prior (0) Bankruptcy Filings (0) Judgments 8 Liens Filings (0) UCC Filings (5) Executives • Prior (3) Registered Agents (3) Name Variations (6) Possible Employees (1) Person Associates (I) Business Associates (5) TINs (3) Possible Connected Parent Company (0) Industry Information (1) Business (45) View All Sources (131) Business Summary Name Address Phone NEPTUNE. LLC 608 S 19th St West Des Moines, IA 50265-5505 Polk County 813-645-6815 'II (Most Recent Listing) 01/01/2014 • 06/13/201? © (Business) LexID Established TIN 0001-0323-9036 1968 (49 Years in Business) 42-1610539 At a Glance Real Property 1 UCC Debtor 3 Personal Property 0 Bankruptcy 0 For internal use only SDNY_GM_00059717 CONFIDENTIAL - PURSUANT TO FED. R.CON(F IDENTIAL DB-SDNY-0022541 EFTA_00 170267 EFTA01296901 Page 2 Secured Assets 0 Judgments/Liens 0 Executives 7 Foreclosure/Notice of Default 0 Name Variations - 6 name variations found NO. NAME 1. NEPTUNE. LLC 2. NEPTUNE CYCLERY 3. NEPTUNE CYCLERY AND NEPTUNE LOUNGE 4. NEPTUNE HOLDING CORP 5. NEPTUNE HOLDINGS CORP 6. NEPTUNE LOUNGE INC TINs - 3 TINs found NO. TIN NAME 1. 42-1610539 NEPTUNE CYCLERY INC NEPTUNE LLC 2. 59-1230185 NEPTUNE LOUNGE INC 3. 59-3260260 NEPTUNE NEPTUNE CYCLERY INC NEPTUNE HOLDINGS CORP NEPTUNE LOUNGE Business Profile Executives. Current - 7 executive(s) found NO. NAME TITLE 1. Bowen, Katherine H th Associated with Other Companies ADeceased PRESIDENT (03/31/2008 - 12/05/2016) 2. Callison, Wesley D - MEMBER (03/31/2008 - 04/27/2016) - MANAGER (12/01/2003) 3. Charpie, David S / Moderate Risk it Associated with Other Companies - SECRETARY (03/31/2008 - 0427/2016) - PRINCIPAL 4. Griffis. Jesse G VICE PRESIDENT (12/14/1982 - 12/05/2016) 5. Mchose, Richard R MEMBER (01/24/2014 - 04/27/2016) 6. Moore, Aixa it Associated with Other Companies - MEMBER (03/31/2008 - 04/27/2016) - MANAGER (12/012003) 7. Mullally, Edward R / Moderate Risk - PRESIDENT (03/31/2008 - 04/27/2016) - OWNER (02/1998) Inco • oration/SOS 2 active, 1 other NO. NAME FILING TYPE STATUS FILING DATE FILING NO. STATE 1 NEPTUNE, LLC LIMITED LIABILITY CORPORATION ACTIVE 12/01/2003 L0300005020 FL Additional Details Business Type: LIMITED LIABILITY CORPORATION Business Status: ACTIVE For Profit: Unknown Foreign/Domestic: Domestic For internal use only SDNY_GM_00059718 CONFIDENTIAL - PURSUANT TO FED. R.CON(F IDENTIAL DB-SDNY-0022542 EFTA_00 170268 EFTA01296902 Page 3 Origin: State of FL 2. NEPTUNE HOLDINGS CORP. CORPORATION- BUSINESS ACTIVE 08/01/1994 P9400005715 3 FL Additional Details Business Type: CORPORATION-BUSINESS Business Status: ACTIVE For Profit: Yes Foreign/Domestic: Domestic Origin: State of FL 3. NEPTUNE LOUNGE INC CORPORATION- BUSINESS INACTIVE 12/10/1968 338721 FL Additional Details Business Type: CORPORATION-BUSINESS Business Status: INACTIVE For Profit: Yes Foreign/Domestic: Domestic Origin: State of FL OperatingLocations - Showing 12 location(s) NO. ADDRESS METRO AREA PHONE 1. 10522 Scott Mill Rd Jacksonvile, FL 32257-6263 Duval County Jacksonville, FL 2. 103 Atlantic Blvd Neptune Beach, FL 32266-5251 Duval County Jacksonville, FL 3. 6601 Blackfin Way Apollo Beach, FL 33572-3029 Hillsborough County Tampa-St. Petersburg- Clearwater, FL 727-943-5805 4. (Most Recent Listing) 07/012013.06/132017 8 (Business) 813-645-6815 tid (Most Recent Listing) Of/01/2014 - 06/ t 32017 ®(Business) 4. 1112 Neptune Dr Ruskin. FL 33570-2768 Hillsborough County Tampa-St. Petersburg- Clearwater, FL 5. 13 S Safford Ave Tarpon Spnngs, FL 34689-3456 Pinellas County Tampa-St. Petersburg- Clearwater, FL 727-943-5805 # (Most Recent Listing) 07/012013.06/132017 (Business) 727-943-5713 / (Phone Ds-Listed in Electronic Directory Assistance) 813-943-5805 6. 1721 Sunset Dr Tarpon Springs, FL 34689-2239 Pinellas County Tampa-St. Petersburg- Clearwater, FL 7. 232 Butler Dr Satsuma. FL 32189-2103 PUTNAM COUNTY For internal use only SDNY_GM_00059719 CONFIDENTIAL - PURSUANT TO FED. R.ctQN(F IDENTIAL DB-SDNY-0022543 EFTA_00 170269 EFTA01296903 Page 4 Putnam County 8. 445-26 Sr 13 445 27 N Jacksonville, FL 32259 St. Johns County Jacksonville. FL 9. 445-26 Sr 13 445-27 N Jacksonville, FL 32259 St. Johns County Jacksonville, FL 10. 24168 140th St Spirit Lake, IA 51360-7045 Dickinson County DICKINSON COUNTY 11. 608 S 19th St West Des Moines, IA 50265-5505 Polk County Des Moines. IA 12. Rr 1 Cambridge. IA 50046 Story County STORY COUNTY Sales - 0 record(s) found Parent Company - 0 record(s) found Industry Information SIC NAIC 3751 Motorcycles, Bicycles, And Parts 336991 Motorcycle. Bicycle, and Parts Manufacturing 5813 Drinking Places 45111 Spoiling Goods Stores 5941 Sporting Goods And Bicycle Shops 451110 Sporting Goods Stores 7699 Repair Services. Nec 722410 Drinking Places (Alcoholic Beverages) 9999 Nonclassifiable Establishments Industry Description: BICYCLES REPAIR Business Description: MOTORCYCLES, BICYCLES & PARTS Licenses -1 licenses found NO. LICENSE NO. DESCRIPTION ISSUER ISSUED/EXPIRED 1. BEV6209000 FL Expired: 09/30/2004 URLs -1 URLs found THENEPTUNELOUNGE.CCM Bankruptcy (0 active, 0 closed) Judgments/Liens (0 filings) UCC Filings (5 debtor, 0 credito NO. ROLE STATUS ORIG. FILING DATE ORIG. FILE NUMBER JURISDICTI ON FILE TYPE 1. Debtor Active 12/02/1996 960000252858 FL Initial Filing Filing Office Information SECRETARY OF STATE/UCC DIVISION State Capitol For internal use only SDNY_GM_00059720 CONFIDENTIAL - PURSUANT TO FED. R.CON(F IDENTIAL DB-SDNY-0022544 EFTA_00 I 70270 EFTA01296904 Page 5 Tallahassee, FL 32314 Filing 1 Filing Number 960000252858 Filing Date: 12/02/1996 Filing Type: INITIAL FILING Debtor 1 NEPTUNE CYCLERY AND NEPTUNE LOUNGE 13 S Safford Ave Tarpon Springs. FL 34689-3456 Secured Party Info 1 MERCANTILE BANK 28100 Us Highway 19 N Clearwater. FL 33761-2635 Collateral ACCOUNT(S) AND PROCEEDS;BUILDING MATERIALS AND PROCEEDS:FIXTURES AND PROCEEDS:COMMUNICATIONS EQUIPMENT AND PROCEEDS;INVENTORY AND PROCEEDS;BUILDING(S) AND PROCEEDS:TIMBER AND PROCEEDS:FARM PRODUCTS/CROPS AND PROCEEDS:OIL, GAS AND MINERALS AND PROCEEDS;CONTRACT RIGHTS AND PROCEEDS;MACHINERY AND PROCEEDS;EQUIPMENT AND PROCEEDS 2. I Debtor I Active 111/22/1996 [960000245697 FL Continuation Filing Office Information SECRETARY OF STATE/UCC DIVISION State Capitol Tallahassee, FL 32314 Filing 2 Filing Number 200100146806 Filing Date: 07/03/2001 Filing Type: CONTINUATION Debtor 1 Cyclery, Neptune 13 S Safford Ave Tarpon Springs. FL 34689-3456 Secured Party Info 1 IFS FUNDING CORP 801 W Madison St Waterloo, WI 53594-1379 Filing 1 Filing Number 960000245697 Filing Date: 11/22J1996 Filing Type: INITIAL FILING Debtor 1 For internal use only SDNY_GM_00059721 CONFIDENTIAL - PURSUANT TO FED. R.CON(F IDENTIAL DB-SONY-0022545 EFTA_00 170271 EFTA01296905 Page 6 Cyclery, Neptune 13 S Safford Ave Tarpon Springs. FL 34689-3456 Secured Party Info 1 IFS FUNDING CORP. 801 W Madison St Waterloo. WI 53594-1379 Collateral INVENTORY INCLUDING PROCEEDS AND PRODUCTS 3. [Debtor lAcbve 110/28/1996 j960000227777 FL Initial Filing Filing Office Information SECRETARY OF STATE/UGC DIVISION State Capitol Tallahassee, FL 32314 Filing 1 Filing Number 960000227777 Filing Date: 10/28/1996 Filing Type: INITIAL FILING Debtor 1 NEPTUNE CYCLERY AND NEPTUNE LOUNGE 13 S Safford Ave Tarpon Springs, FL 34689-3456 Secured Party Info 1 MERCANTILE BANK 28100 Us Highway 19 N Clearwater, FL 33761-2635 Collateral INVENTORY INCLUDING PROCEEDS AND PRODUCTS:EQUIPMENT INCLUDING PROCEEDS AND PRODUCTS:FIXTURES INCLUDING PROCEEDS AND PRODUCTS:GENERAL INTANGIBLE(S) INCLUDING PROCEEDS AND PRODUCTS;CHATTEL PAPER INCLUDING PROCEEDS AND PRODUCTS:ACCOUNTS RECEIVABLE INCLUDING PROCEEDS AND PRODUCTS:MACHINERY INCLUDING PROCEEDS AND PRODUCTS;ACCOUNT(S) INCLUDING PROCEEDS AND PRODUCTS 4. !Debtor 'Closed 112/03/1996 1960000252858 FL Termination Filing Office Information SECRETARY OF STATE/UCC DIVISION State Capitol Tallahassee, FL 32314 Filing 2 Filing Number 200190658175 Filing Date: 12/28/2001 Filing Type: TERMINATION For internal use only SDNY_GM_000 59722 CONFIDENTIAL - PURSUANT TO FED. R.ctit;IFNIF IDENTIAL DB-SDNY-0022546 EFTA_00 170272 EFTA01296906 Page 7 Debtor 1 Cyclery, Neptune 13 S Safford Ave Tarpon Springs, FL 34689-3456 Secured Party Info 1 MERCANTILE BANK 28100 Us Highway 19 N Clearwater, FL 33761-2635 Filing 1 Filing Number 200100127822 Filing Date: 06/11/2001 Filing Type: CONTINUATION Debtor 1 NEPTUNE CYCLERY AND NEPTUNE LOUNGE 13 S Safford Ave Tarpon Springs, FL 34689-3456 Secured Party Info 1 MERCANTILE BANK 28100 Us Highway 19 N Clearwater, FL 33761-2635 5. I Debtor I Closed l 10/30/1996 1960000227777 FL Termination Filing Office Information SECRETARY OF STATEIUCC DIVISION State Capitol Tallahassee, FL 32314 Filing 2 Filing Number 200190658183 Filing Date: 12/28/2001 Filing Type: TERMINATION Debtor 1 Cyclery, Neptune 13 S Safford Ave Tarpon Springs, FL 34689-3456 Secured Party Info 1 MERCANTILE BANK 28100 Us Highway 19 N Clearwater, FL 33761-2635 Filing 1 Filing Number 200100125404 Filing Date: 06/08/2001 Filing Type: CONTINUATION Debtor 1 Cyclery, Neptune For internal use only SDNY_GM_000 59723 CONFIDENTIAL - PURSUANT TO FED. R.CON(F IDENTIAL DB-SDNY-0022547 EFTA_00 I 70273 EFTA01296907 Page 8 13 S Safford Ave Tarpon Springs, FL 34689-3456 Secured Party Info 1 MERCANTILE BANK 28100 Us Highway 19 N Clearwater, FL 33761-2635 Real Property (1 current, 7 prior NO. ADDRESS STATUS PURCHASE PRICE SALE PRICE STATE 1. 1110 Neptune Dr Ruskin, FL 33570-2768 Hillsborough County Source: B Current $622,000.00 FL Owner 1 Information LEHIGH CLAY PROPERTIES LTD 608 S 19th St West Des Moines, IA 50265-5505 Polk County Legal Information Parcel Number U123218Z7_Z000001094400 Assessment Year: 2016 Recording Date: 12102/2003 Document Type: ASSESSOR Assessed Value: $641,575.00 Market Land Value: $285,079.00 Total Market Value: $643.533.00 Type of Address: SINGLE FAMILY RESIDENTIAL 2. FL Hillsborough County Source: B Prior FL Owner 1 Information NEPTUNE LLC 6601 Blackfin Way Apollo Beach, FL 33572-3029 Hillsborough County Seller 1 Information Farrington, Michael 6520 Santiago Ct Apollo Beach, FL 33572-2112 Hillsborough County Seller 2 Information Farrington, Mike 6520 Santiago Ct Apollo Beach, FL 33572-2112 Hillsborough County For internal use only SDNY_GM_00059724 CONFIDENTIAL - PURSUANT TO FED. R.QQN(F IDENTIAL DB-SDNY-0022548 EFTA_00 170274 EFTA01296908 Pa-c () Legal Information Recording Date: 01/11/2006 Document Type: DEED Mortgage 1 Information Recording Date: 01/11/2006 Contract Date: 12/21/2005 Description. CORRECTION DEED Mortgage 2 Information Recording Date: 09/24/2004 Contract Date: 08/31/2004 Loan Amount $145,000.00 Lender Name: MICHAEL FARRINGTON Description: WARRANTY DEED 3. 1007 Neptune Dr Ruskin, FL 33570-2706 Hillsborough County Source: B Prior FL Owner 1 Information NEPTUNE LLC 608 S 19th St West Des Moines, IA 50265-5505 Polk County Legal Information Parcel Number U123218ZZZ000001093800 Assessment Year 2008 Recording Date: 12212005 Document Type: ASSESSOR Assessed Value: $92,045.00 Market Land Value: $39.960.00 Total Market Value: $92,045.00 Type of Address. SINGLE FAMILY RESIDENTIAL 4. Ruskin, FL 33570 Hillsborough County Source: B Prior FL Owner 1 Information NEPTUNE LLC 608 S 19th St West Des Moines, IA 50265-5505 Polk County Legal Information Parcel Number. U123218ZZ2000001093700 Assessment Year: 2009 Recording Date: 12/21/2005 Document Type: ASSESSOR Assessed Value: $74:025.00 For internal use only SDNY_GM_00059725 CONFIDENTIAL - PURSUANT TO FED. R.CON(F IDENTIAL DB-SDNY-0022549 EFTA 00170275 EFTA01296909 Pace lu Market Land Value: $74,025.00 Total Market Value: $74.025.00 Type of Address: VACANT (GENERAL) 5. 1016 Neptune Dr Ruskin, FL 33570-2705 Hillsborough County Source: B Prior $622,000.00 FL Owner 1 Information LEHIGH CLAY PROPERTIES LIMITED 608 S 19th St West Des Moines, IA 50265-5505 Polk County Legal Information Parcel Number U123218272000001094400 Assessment Year. 2008 Sale Price: $622,000.00 Recording Date: 12/02/2003 Document Type: ASSESSOR Assessed Value: $951,246.00 Market Land Value: $540,100.00 Total Market Value: $951,246.00 Type of Address: MOBILE HOME 6. FL Pinellas County Source: B Prior FL Owner 1 Information NEPTUNE HOLDINGS CORPORATION 1721 Sunset Dr Tarpon Springs, FL 34689-2239 Pinellas County Legal Information Recording Date: 01/04/1995 Document Type: DEED Mortgage 1 Information Recording Date: 01/04/1995 Contract Date: 11/08/1994 7. 13 Safford Ave Tarpon Springs, FL 34689 Pinellas County Source: B Prior $100,000.00 FL Owner 1 Information NEPTUNE HOLDINGS CORP 1721 Sunset Dr Tarpon Springs, FL 34689-2239 Pinellas County For internal use only SDNY_GM_000 59726 CONFIDENTIAL - PURSUANT TO FED. R.CON(F IDENTIAL DB-SDNY-0022550 EFTA_00I 70276 EFTA01296910 l'atrn I I Legal Information Parcel Number 12-27-15-77778-401.0150 Assessment Year: 2016 Sale Price: $100,000.00 Recording Date: 09/02/1994 Document Type: ASSESSOR Assessed Value: $187,000.00 Market Land Value: $44,545.00 Total Market Value: $187,000.00 Type of Address: SHOPPING CENTER (NEIGHBORHOOD - STRIP) 8. 13 Safford Ave Prior FL FL Pinellas County Source: B Owner 1 Information NEPTUNE HOLDINGS CORPORATION 1721 Sunset Dr Tarpon Springs, FL 34689-2239 Pinellas County Legal Information Parcel Number 12-27-15-77778-401-0150 Assessment Year: 2008 Document Type: ASSESSOR Assessed Value: $185,000.00 Market Land Value: $48,100.00 Total Market Value: $185,000.00 Type of Address: SHOPPING CENTER (NEIGHBORHOOD - STRIP) Personal Property (0 current, 0 prior) Associates Executives. Prior - 3 prior executives) found NO. NAME TITLE 1. Callison, Wesley D OFFICER 2. Halve. Loren i Moderate Risk It Associated with Other Companies ADeceased MEMBER (03/3112008 - 01/302009) 3. Pearey, Elwin MEMBER (03/31/2008 - 01/30/2009) Registered Agents - 3 registered agent(s) found NO. NAME ADDRESS STATE DATE(S) 1. Bowen, Katherine H Florida 12/14/1982 - 12/052016 2. Callison, Wesley D Florida 12/05/2016 For internal use only SDNY_GM_00059727 CONFIDENTIAL - PURSUANT TO FED. R.CON(F IDENTIAL DB-SONY-0022551 EFTA_00 I 70277 EFTA01296911 Page 12 3. Charpie, David S Florida 09/27/1995 - 12/052016 Possible Employees - 0 current, 1 prior employees found NO. NAME ADDRESS STATUS DATE S 1. Callison, D MANAGER Prior 12/01(2003 Person Associates - 1 other person associates found NO. NAME ADDRESS ROLE 1. Farrington. Michael / Moderate Risk Real Property Possible Connected Business - 45 businesses found NO. NAME ADDRESS 1. NEP TUEN RECORDS 1501 S Dale Mabry Hwy Tampa, FL 33629-5837 Hillsborough County 2. NEPTUNE Tampa, FL 3. NEPTUNE 160 Live Oak Woods Ct Deltona, FL 32725-8926 4. NEPTUNE 2088 Central Ave Fort Myers. FL 33901-3917 Lee County 5. NEPTUNE 2310 Estero Blvd Fort Myers Beach. FL 33931-3221 Lee County 6. NEPTUNE 4401 Westown Pkwy Ste 226 West Des Moines, IA 50266-6721 7. NEPTUNE 782750 O/5 Hwy Islamorada. FL 33036 Monroe County 8. NEPTUNE 796 NW 57th St Fort Lauderdale, FL 33309-2825 Broward County 9. NEPTUNE 850 NW 155th Ln Apt 301 Miami, FL 33169.6166 Miami-Dade County 10. NEPTUNE 1 LLC PO Box 25177 Miami, FL 33102.5177 Miami-Dade County 11. NEPTUNE CORP PO Box 398570 Miami Beach, FL 33239-8570 Miami-Dade County 12. NEPTUNE CORP 1058 SE Port St Lude Blvd Port Saint Lucie, FL 34952-5377 St. Lucie County 13. NEPTUNE CORP 1910 SE Port St Lude Blvd Port Saint Lucie, FL 34952-5581 St. Lucie County 14. NEPTUNE CORP 610 SW Bayshore Blvd Port Saint Lucie, FL 34983.1864 St. Lucie County 15. NEPTUNE CORPORATION 139 N County Rd Palm Beach. FL 33480-3908 For internal use only SDNY_GM_00059728 CONFIDENTIAL - PURSUANT TO FED. R.CON(F IDENTIAL DB-SONY-0022552 EFTA_00170278 EFTA01296912 Page 13 Palm Beach County 16. NEPTUNE CORPORATION OF THE THE 1058 SE Pod St Lucie Blvd Port Saint Lucie, FL 34952-5377 St. Lucie County 17. NEPTUNE ENTERPRISES, INC. PO Box 6446 Key West, FL 33041-6446 Monroe County 18. NEPTUNE HOLDING CO INC PO Box 1938 Marco Island, FL 34146-1938 Collier County 19. NEPTUNE HOLDING CORP 2887 SW 69th Ct Miami. FL 33155-2816 Miami-Dade County 20. NEPTUNE HOLDING CORP. 3950 SW 136th Ave Miramar. FL 33027-2746 Broward County 21. NEPTUNE HOLDINGS 420 Lincoln Rd Ste 245 Miami Beach, FL 33139-3035 Miami-Dade County 22. NEPTUNE HOLDINGS LLC 1921 Trade Center Way Ste 1 Naples, FL 34109-6600 Collier County 23. NEPTUNE INC 12250 Hammock Creek Way Fort Myers, FL 33905-6247 Lee County 24. NEPTUNE INC 17320 NW 80th Ave Hialeah, FL 33015-3835 Miami-Dade County 25. NEPTUNE INC 3536 NE 168th St Apt 407 North Miami Beach, FL 33160-3576 Miami-Dade County 26. NEPTUNE LIMITED, INC. 1217 Cape Coral Pkwy E Cape Coral, FL 33904-9604 Lee County 27. NEPTUNE LLC PO Box 237237 Cocoa, FL 32923-7237 Brevard County 28. NEPTUNE LLC 1016 Neptune Dr Ruskin, FL 33570-2705 Hillsborough County 29. NEPTUNE LLC 1016 Neptune Dr Apt 10 Ruskin. FL 33570-2705 Hillsborough County 30. NEPTUNE LLC 358 El Brillo Way Palm Beach. FL 33480-4730 Palm Beach County 31. NEPTUNE LLC 405 2nd St S Ste C Safety Harbor, FL 34695-4054 Pinellas County 32. NEPTUNE LOUNGE PO Box 578 New Smyrna Beach, FL 32170-0578 Volusia County 33. NEPTUNE LOUNGE INC PO Box 122 Atlantic Beach, FL 32233 Duval County 34. NEPTUNE LOUNGE INC PO Box 122 Neptune Beach. FL 32266 Duval County 35. NEPTUNE LOUNGE INC 10911th St Atlantic Beach, FL 32233-5751 For internal use only SDNY_GM_00059729 CONFIDENTIAL - PURSUANT TO FED. R.CON(F IDENTIAL DB-SONY-0022553 EFTA_00 I 70279 EFTA01296913 Page 14 Duval County 36. NEPTUNE LOUNGE INC 109 11th St Neptune Beach, FL 32266-3374 Duval County 37. NEPTUNE LOUNGE LLC 918 Railroad Avenue A Avon Park, FL 33825 Highlands County 38. NEPTUNE LTD. 1543 SW 2nd St Miami, FL 33135-2106 Miami-Dade County 39. NEPTUNE PC 3061 NE 11th Ave Pompano Beach, FL 33064-6315 Broward County 40. NEPTUNE STEAK HOUSE AND LOUNGE 515 N Ridgewood Ave Edgewater. FL 32132-1621 Volusia County 41. NEPTUNE'S INVESTMENT HOLDING C 5640 Taylor Rd Ste 5 Naples, FL 34109-2300 Collier County 42. NEPTUNE, INC. PO Box 5153 Hialeah, FL 33014-1153 Miami-Dade County 43. THE NEPTUNE 1515 Broadway Fort Myers, FL 33901.3014 44. THE NEPTUNE CORPORATION 407 Lincoln Rd Miami Beach, FL 33139-3020 Miami-Dade County 45. ZEHM BROS. CONSTRUCTION INC. 380 Rivertown Dr Ste 200 Woodbury, MN 55125-7744 Washington County Business Associates - 5 business associates found NO. NAME ADDRESS ROLE 1. IFS FUNDING CORP 801 W Madison St Waterloo, WI 53594-1379 Jefferson County UCC 2. INTREPID FINANCIAL SERVICES 801 W Madison St Waterloo, WI 53594-1379 Jefferson County UCC 3. LEHIGH CLAY PROPERTIES LTD 1110 Neptune Dr Ruskin, FL 33570-2768 Hillsborough County Real Property 4. LEHIGH CLAY PROPERTIES LTD 608 5 19th St West Des Moines, IA 50265-5505 Polk County Real Property 5. MERCANTILE BANK 28100 Us Highway 19 N Clearwater, FL 33761-2635 Pinellas County UCC Sources All Sources 131 Source Documents Real Property 93 Source Documents Corporate Filings 3 Source Documents UCC 5 Source Documents Government Agency 1 Source Documents Other Directories 16 Source Documents Telco 8 Source Documents Experian FEIN 3 Source Documents For internal use only SDNY_GM_000 59730 CONFIDENTIAL - PURSUANT TO FED. R.CON(F IDENTIAL DB-SONY-0022554 EFTA 00170280 EFTA01296914 Page 15 Experian 2 Source Documents Key: /A•High Risk Indicator. These symbols may prompt you to investigate further. / Moderate Risk Indicator. These symbols may prompt you to investigate further. t General Information Indicator. These symbols inform you that additional information is provided. AO The most recent telephone listing as reported by Electronic Directory Assistance. 4ifl Wireless Phone Indicator. These symbols indicate a cell phone number. a) Residential Phone Indicator. These symbols indicate a residential phone number. ® Business Phone Indicator. These symbols indicate a business phone number. (i) Shared Phone Indicator. These symbols indicate the phone number may be shared between wireless and landline service. (E) FAX Indicator. These symbols indicate a FAX number. `%w Government Phone Indicator. These symbols indicate a government phone number. Important: The Pubic Records and commercially available data sources used on reports have ernes. Data is sometimes entered poorly. processed incorrectly and is generally not free horn defect. This system should not be relied upon as definitively accurate. Before relying co any data this system supplies, a should be Independently verified. For Secretary of Stale documents, the follonl ng data is for information purposes only and is not an official record. Codified copies may be obtained from that Individual MOWS Department of Stale. Your DPPA Permissible Use is: Debt Recovery/Fraud Your GLBA Permissible Use is: Legal Compliance Copyright 02017 LerisNexis, a division of Reed Elsevier Inc. All Rights Reserved 2 OF 4 RECORD(S) Comprehensive Business Report Report Created:6-15-2017 6:30 PM EST I FOR INFORMATIONAL PURPOSES ONLY I Copyright O 2017 LexisNexis, All rights reserved. Search Terms - company(Neptune, LLC)tin(45-4093384) radius(15) Executives - Current (0) IncorporatloniS0S (0) 0perationsISites (1) Sales (0) Licenses (0) URLs (0) Real Property - Current (0) Real Property - Prior (0) MVRs - Current (0) AAVRs - Prior (0) Watercraft - Current (0) Watercraft - Prior (0) Aircraft - Current (0) Aircraft - Prior (0) Bankruptcy Firings (0) Judgments 8 Liens Filings (0) UCC Filings (1) Executives - Prior (0) Registered Agents (0) Name Variations (1) Possible Employees (0) Person Associates (0) Business Associates (1) TINs (0) Possible Connected Parent Company (0) Industry Information (0) Business (4) View All Sources (2) Business Summa Name Address Phone NEPTUNE, LLC I (No recent public filings on file) 2700 S Ashland Ave Green Bay, WI 54304-5303 Brown County LexID Established TIN 0001-0353-4766 2006 (11 Years in Business) At a Glance Real Property 0 UCC Debtor For internal use only 0 SDNY_GM_00059731 CONFIDENTIAL - PURSUANT TO FED. R.CON(F IDENTIAL DB-SDNY-0022555 EFTA_00170281 EFTA01296915 Page 16 Personal Property 0 Bankruptcy 0 Secured Assets 0 Judgments/Liens 0 Executives 0 Foreclosure/Notice of Default 0 Name Variations -1 name variations found NO. 1. NAME NEPTUNE, LLC TINs - 0 TINs found Business Profile Executives: Current - 0 executive(s) found Incorporation/SOS (0 active, 0 other) OperatingLocations - Showing 1 location(s) NO. ADDRESS METRO AREA PHONE 1. 2700 S Ashland Ave Green Bay. WI 54304.5303 Brown County Green Bay. WI Sales - 0 record(s) found Parent Company - 0 record(s) found Industry Information - no information found Licenses - 0 licenses found URLs - 0 URLs found Bankruptcy (0 active, 0 closed) Judgments/Liens (0 filings) UCC Filings (1 debtor, 0 cred tor NO. ROLE STATUS ORIG. FILING DATE ORIG. FILE NUMBER JURISDICTI ON FILE TYPE 1. Debtor Closed 01/06/2003 030000304209 WI Termination Filing Office Information SECRETARY OF STATE/UCC DIVISION 30 W Mifflin Madison, WI 53702 Filing 2 Filing Number 040013506318 Filing Date: 08/24/2004 Filing Type: TERMINATION Debtor 1 NEPTUNE. LLC 2700 S Ashland Ave Green Bay, WI 54304-5303 For internal use only SDNY_GM_00059732 CONFIDENTIAL - PURSUANT TO FED. R.CON(F IDENTIAL DB-SONY-0022556 EFTA 00170282 EFTA01296916 Page 17 Secured Party Info 1 ASSOCIATED BANK, NATIONAL ASSOCIATION 200 N Adams St Green Bay, WI 54301-5142 Filing 1 Filing Number 030000304209 Filing Date: 01/06/2003 Filing Type: INITIAL FILING Expiration: 01/C6/2008 Debtor 1 NEPTUNE, LLC 2700 S Ashland Ave Green Bay. WI 54304-5303 Secured Party Info 1 ASSOCIATED BANK, NATIONAL ASSOCIATION 200 N Adams St Green Bay. WI 54301-5142 Collateral FIXTURES ALL INCLUDING PROCEEDS AND PRODUCTS:COMPUTER EQUIPMENT ALL INCLUDING PROCEEDS AND PRODUCTS;CHATTEL PAPER ALL INCLUDING PROCEEDS AND PRODUCTS:EQUIPMENT ALL INCLUDING PROCEEDS AND PRODUCTS:GENERAL INTANGIBLE(S) ALL INCLUDING PROCEEDS AND PRODUCTS:INVENTORY ALL INCLUDING PROCEEDS AND PRODUCTS;ACCOUNT(S) ALL INCLUDING PROCEEDS AND PRODUCTS Real Property (0 current, 0 prior) Personal Property (0 current, 0 prior) Associates Executives: Prior - 0 prior executive(s) found Registered Agents - 0 registered agent(s) found Possible Employees - 0 current, 0 prior employees found Person Associates - 0 other person associates found Possible Connected Business - 4 businesses found NO. NAME ADDRESS 1. NEPTUNE 928 Mason St Rhinelander, WI 54501-2323 Oneida County 2. NEPTUNE LLC Car Villa Subdivision Lot 13 Sturgeon Bay, WI 54235 For internal use only SDNY_GM_00059733 CONFIDENTIAL - PURSUANT TO FED. R.CON(F IDENTIAL DB-SONY-0022557 EFTA_00 170283 EFTA01296917 Page 18 Door County 3. NEPTUNE LLC 2101 Lake Point Dr Apt 2 Madison, WI 53713-3705 4 NEPTUNE, LLC PO Box 11971 Green Bay, WI 54307-1971 Brown County Business Associates -1 business associates found NO. NAME ADDRESS ROLE 1. ASSOCIATED BANK, NATIONAL ASSOCIATION 200 N Adams St Green Bay, WI 54301-5142 Brown County UCC Sources All Sources 2 Source Documents UCC 1 Source Documents Other Directories 1 Source Documents Key: SHigh Risk Indicator. These symbols may prompt you to investigate further. I Moderate Risk Indicator. These symbols may prompt you to investigate further. f ah General Information Indicator. These symbols inform you that additional information is provided.  The most recent telephone listing as reported by Electronic Directory Assistance. *Wireless Phone Indicator. These symbols indicate a cell phone number. • Residential Phone Indicator. These symbols indicate a residential phone number. 0 Business Phone Indicator. These symbols indicate a business phone number. (4) Shared Phone Indicator. These symbols indicate the phone number may be shared between wireless and landline service. FAX Indicator. These symbols indicate a FAX number. \W Government Phone Indicator. These symbols indicate a government phone number. Important: The Pubic Records and commercially available data sources used on reports have errors. Data is sometimes entered poaly, processed incorrectly and is generally not free from defect. This system should not be relied upon as delnilively accurate. Before relying on any data this system supplies. it should be independently verified. For Secretary of State documents. the (dittoing data is for information purposes only and is nol an official record. Certified copies may be obtained from that individual state's Deportment of State. Your °PPP Permissible Use is: Debt Recovery/Fraud Your GLBA Permissible Use is: Legal Compliance Copyright C 2017 LexisNexis, a division of Reed Elsevier Inc. All Rights Reserved. 3 OF 4 RECORD(S) Comprehensive Business Report Report Created:6-15-2017 6.30 PM EST I FOR INFORMATIONAL PURPOSES ONLY I Copyright 2017 LexisNexis, All rights reserved. Search Terms - company(Neptune, LLC) tin(45-4093384) radius(15) Executives Current (0) Licenses (0) MVRs - Current (0) Aircraft - Current (0) Incorporation/SOS (1) URLs (0) MVRs Prior (0) Aircraft - Prior (0) OperationsiSites (1) Real Property - Current (0) Watercraft - Current (0) Bankruptcy Filings (0) For internal use only Sales (0) Real Property - Prior (0) Watercraft - Pnor (0) Judgments 8. Liens Filings (0) SDNY_GM_000 59734 CONFIDENTIAL - PURSUANT TO FED. R.CON(F IDENTIAL DB-SONY-0022558 EFTA_00170284 EFTA01296918 Page 19 UCC Filings (1) Possible Employees (1) Possible Connected Business (6) View All Sources (6) Business Summary Name Address Phone NEPTUNE. LLC 2142 NW Robin Hood St Corvallis, OR 97330-1153 Benton County LexID Established TIN 0001.0357.4248 2011 (6 Years in Business) Executives • Prior (0) Person Associates (0) Parent Company (0) Registered Agents (1) Business Associates (4) Industry Information (0) Name Variations (1) TINs (0) At a Glance Real Property 0 UCC Debtor 1 Personal Property 0 Bankruptcy 0 Secured Assets 0 Judgments/Liens 0 Executives 0 Foreclosure/Notice of Default 0 Name Variations -1 name variations found NO. NAME NEPTUNE, LLC TINs - 0 TINs found Business Profile Executives: Current - 0 executive(s) found Incorporation/SOS (0 active, 1 other) NO. NAME FILING TYPE STATUS FILING DATE FILING NO. STATE 1. NEPTUNE, LLC LIMITED LIABILITY CORPORATION INACTIVE 05/19/2011 77332097 OR Additional Details Business Type: LIMITED LIABILITY CORPORATION Business Status: INACTIVE Filing Type: CURRENT ENTITY NAME For Profit: Unknown Foreign/Domestic: Domestic Origin: State of OR Filing History (most recent two years) Filing Date Description 07/19/2013 ADMINISTRATIVE DISSOLUTION OperatingLocations - Showing 1 location(s) NO. ADDRESS METRO AREA PHONE 1. 2142 NW Robin Hood St Corvallis, OR 97330-1153 Benton County Corvallis, OR Sales - 0 record(s) found For internal use only SDNY_GM_00059735 CONFIDENTIAL - PURSUANT TO FED. R.CON(F IDENTIAL DB-SONY-0022559 EFTA_00I 70285 EFTA01296919 Page 20 Parent Company - 0 record(s) found Industry Information - no information found Licenses - 0 licenses found URLs - 0 URLs found Bankruptcy (0 active, 0 closed) Judgments/Liens (0 filings) UCC Filings (1 debtor, 0 cred tor NO. ROLE STATUS ORIG. FILING DATE ORIG. FILE NUMBER JURISDICTI ON FILE TYPE 1. Debtor Active 09/15/2011 89002575 OR Continuation Filing Office Information SECRETARY OF STATE/UCC DIVISION 143 State Capitol Salem, OR 97310 Filing 2 Filing Number 89002575-1 Filing Date: 08/29/2016 Filing Type: CONTINUATION Expiration: 09/15/2021 Debtor 1 BULJAM 2, LLC 2925 43rd Ave SE Albany, OR 97322-6315 Secured Party Info 1 OSU FEDERAL CREDIT UNION 1980 NW 9th St Corvallis. OR 97330-2179 Filing 1 Filing Number 89002575 Filing Date: 09/15/2011 Filing Type: INITIAL FILING Expiration: 09/15/2016 Debtor 1 BULJAM 2. LLC 2925 43rd Ave SE Albany, OR 97322-6315 Secured Party Info 1 OSU FEDERAL CREDIT UNION 1980 MN 9th St For internal use only SDNY_GM_00059736 CONFIDENTIAL - PURSUANT TO FED. R.CDN(F IDENTIAL DB-SDNY-0022560 EFTA_00I 70286 EFTA01296920 Page 21 Corvallis. OR 97330-2179 Collateral FIXTURES AND PROCEEDS:GENERAL INTANGIBLE(S) AND PROCEEDS;ACCOUNT(S) AND PROCEEDS Real Property (0 current, 0 prior) Personal Property (0 current, 0 prior) Associates Executives: Prior - 0 prior executive(s) found Registered Agents -1 registered agent(s) found NO. NAME ADDRESS STATE DATE(S) 1 Cole. Darin F Oregon 05/19/2011 - 06/052017 Possible Employees -1 current, 0 prior employees found NO. NAME ADDRESS STATUS DATE S 1. Cole, Darin F MANAGER Current 05/10/2012 - 06/06/2016 Person Associates - 0 other person associates found Possible Connected Business - 6 businesses found NO NAME ADDRESS 1. NEPTUNE PO Box 18076 Portland. OR 97218-0076 Multnomah County 2. NEPTUNE 212 NE 20th Portland, OR 97232 Multnomah County 3. NEPTUNE AND CO INC 3425 Chevy Chase St Eugene. OR 97401-8011 Lane County 4. NEPTUNE LLC 2337 SE Taggart St Portland, OR 97202-1268 Multnomah County 5. NEPTUNE LLC 621 SW Morrison St Ste 1440 Portland, OR 97205-3811 6. NEPTUNE LLC 7250 NE Avalon Dr Corvallis, OR 97330-9431 Benton County Business Associates - 4 business associates found NO. NAME ADDRESS ROLE 1. BULJAM 2. LLC 2925 43rd Ave SE Albany, OR 97322.6315 Linn County UCC For internal use only SDNY_GM_00059737 CONFIDENTIAL - PURSUANT TO FED. R.CON(F IDENTIAL DB-SONY-0022561 EFTA_00 170287 EFTA01296921 Page 22 2. CLPWARRENTON LLC PO Box 1583 Corvallis, OR 97339-1583 Benton County UCC 3. OSU FEDERAL CREDIT UNION 1980 NW 9th St Corvallis. OR 97330-2179 Benton County UCC 4. SUNSET RIVER LLC PO Box 1583 Corvallis. OR 97339-1583 Benton County UCC Sources All Sources 6 Source Documents Corporate Filings 1 Source Documents UCC 1 Source Documents Other Directories 3 Source Documents Experian 1 Source Documents Key: AHigh Risk Indicator. These symbols may prompt you to investigate further. Moderate Risk Indicator. These symbols may prompt you to investigate further. t General Information Indicator. These symbols inform you that additional information is provided. AO The most recent telephone listing as reported by Electronic Directory Assistance. *Wireless Phone Indicator. These symbols indicate a cell phone number. 8 Residential Phone Indicator. These symbols indicate a residential phone number. Business Phone Indicator. These symbols indicate a business phone number. Shared Phone Indicator. These symbols indicate the phone number may be shared between wireless and landline service. V FAX Indicator. These symbols indicate a FAX number. e21 Nwe Government Phone Indicator. These symbols indicate a government phone number. Important: The Pubic Records and commercially available data sources used on reports have errors. Data is sometimes entered poorly, processed incorrectly and is generally not free from defect. This system should not be relied upon as defnitively accurate. Before relying on any data this system supplies. tl should be independently verified. For Secretary of Slate documents, the foliconlng data S for information purposes onty and is not an official record. Certified copies may be obtained from that individual state's Department of State. Your DPPA Permissible use is: Debt Recovery/Fraud Your ELBA Permissible Use is: Legal Compliance Copyright O2017 LoresNoxis. a division of Rood Eltorrior Inc All Rights Reserved 4 OF 4 RECORD(S) Comprehensive Business Report Report Created:6-15-2017 6:30 PM EST I FOR INFORMATIONAL PURPOSES ONLY I Copyright 2017 LexisNexis. All rights reserved. Search Terms - company(Neptune, LLC) tin(45-4093384) radius(15) Executives - Current (0) Incorporation/SOS (1) 0peratIonsiSites (3) Sales (0) Licenses (0) URLs (0) Real Property - Current (0) Real Property - Prior (0) MVRs • Current (0) MVRs • Prior (0) Watercraft • Current (0) Watercraft - Prior (0) Aircraft - Current (0) Aircraft - Prior (0) Bankruptcy Filings (0) Judgments .1 Liens Filings (0) UCC Filings (0) Executives • Prior (1) Registered Agents (0) Name Variations (4) Possible Employees (1) Person Associates (0) Business Associates (0) TINs (2) For internal use only SDNY_GM_00059738 CONFIDENTIAL - PURSUANT TO FED. R.CON(F IDENTIAL DB-SONY-0022562 EFTA_00 170288 EFTA01296922 Page 23 Possible Connected Business (5) View All Sources (11) Business Summary Name Address Phone NEPTUNE. LLC 1 (No recent public filings on file) PO Box 11971 Green Bay, WI 54307.1971 Brown County 920-822-8552 / (Phone De-Listed in Eleoltonic Diiecroly Assislance) LexID Established TIN 0001-0305-1554 2001 (16 Years in Business) 39-2007435 Parent Company (0) Industry Information (1) At a Glance Real Property 0 UCC Debtor 0 Personal Property 0 Bankruptcy 0 Secured Assets 0 Judgments/Liens 0 Executives 0 Foreclosure/Notice of Default 0 Name Variations - 4 name variations found NO. NAME 1. NEPTUNE, LLC 2. GREAT LAKES COMMUNITY LLC 3. NEPTUNES CHARITABLE FOUNDATION INC 4. NEPTUNES NIMROD SKIN DIVING CLUB INC TINs - 2 TINs found NO. TIN NAME 1. 39-2007435 GREAT LAKES COMMUNITY LLC NEPTUNE LLC NEPTUNES NIMROD SKIN DIVING CLUB INC 2. 39-2029146 NEPTUNES CHARITABLE FOUNDATION INC Business Profile Executives: Current - 0 executive(s) found Incorporation/SOS (0 active, 1 other) NO. NAME FILING TYPE STATUS FILING DATE FILING NO. STATE 1. NEPTUNE'S CHARITABLE FOUNDATION INC CORPORATION-NON FOR PROFIT WA 06/08/2001 N028538 Additional Details Business Type: CORPORATION-NON FOR PROFIT Business Status: N/A Filing Type: SOS Filing Expiration: 06/30/2002 For Profit: Unknown Origin: Other Business Filing OperatingLocations - Showing 3 location(s) For internal use only CONFIDENTIAL —PURSUANT TO FED. R.CON(F IDENTIAL SDNY_GM_00059739 DB-SDNY-0022563 EFTA 00170289 EFTA01296923 Page 24 NO. ADDRESS METRO AREA PHONE 1. PO Box 10893 Green Bay, WI 54307-0893 Brown County Green Bay. WI 2. PO Box 11971 Green Bay, WI 54307-1971 Brown County Green Bay, WI 3. 879 Woodstock Ln Pulaski, WI 54162-9696 Oconto County OCONTO COUNTY 920.822-8552 I (Phone Do-Listed in Electronic Directory Assistance) Sales - 0 record(s) found Parent Company - 0 record(s) found Industry Information SIC NAIC 8399 Social Services, Nec No NAIC information available 9999 Nonclassrfiable Establishments Industry Description: CHARITABLE ORGANIZATION;PUBLIC FOUNDATIONS Business Description: Licenses - 0 licenses found URLs - 0 URLs found Bankruptcy (0 active, 0 closed) Judgments/Liens (0 filings) UCC Filings (0 debtor, 0 creditor) Real Property (0 current, 0 prior) Personal Property (0 current, 0 prior) Associates Executives. Prior -1 prior executives) found NO NAME TITLE 1 Nighorn, Wayne Mb Associated with Other Companies OFFICER Registered Agents - 0 registered agent(s) found Possible Employees - 0 current, 1 prior employees found NO. NAME ADDRESS STATUS DATE(S) 1. Maurine. Tod K N/A PO Box 11971 Green Bay, WI 54307-1971 Prior 06/082001 - 07/052001 For internal use only SDNY_GM_00059740 CONFIDENTIAL - PURSUANT TO FED. R.CDFNI(E IDENTIAL DB-SONY-0022564 EFTA_00I 70290 EFTA01296924 Page 25 Person Associates - 0 other person associates found Possible Connected Business - 5 businesses found NO. NAME ADDRESS 1. NEPTUNE 928 Mason St Rhinelander, WI 54501-2323 Oneida County 2. NEPTUNE LLC Car Villa Subdivision Lot 13 Sturgeon Bay. WI 54235 Door County 3. NEPTUNE LLC 2101 Lake Point Dr Apt 2 Madison, WI 53713-3705 4. NEPTUNE'S CHARITABLE FOUNDATIO 126 Schmitz Dr Forestville. WI 54213-9650 5. NEPTUNE, LLC 2700 S Ashland Ave Green Bay, WI 54304-5303 Brown County Business Associates - 0 business associates found Sources All Sources 11 Source Documents Government Agency 5 Source Documents Other Directories 4 Source Documents Experian FEIN 2 Source Documents Key: AHigh Risk Indicator. These symbols may prompt you to investigate further. 1 ./ Moderate Risk Indicator. These symbols may prompt you to investigate further. r a. General Information Indicator. These symbols inform you that additional information is provided. ftil The most recent telephone listing as reported by Electronic Directory Assistance. *Wireless Phone Indicator. These symbols indicate a cell phone number. OD Residential Phone Indicator. These symbols indicate a residential phone number. Business Phone Indicator. These symbols indicate a business phone number. V Shared Phone Indicator. These symbols indicate the phone number may be shared between wireless and landline service. FAX Indicator. These symbols indicate a FAX number. Government Phone Indicator. These symbols indicate a government phone number. Important: The Pubic Records and commercially available data sources used on reports have errors. Dale is sometimes eMered poorly. processed incorrectly and is generally riot free from detect. This system should not be relied upon as defmtvely accurate. Before relying on any data this system supplies. it should be independently verified. For Secretary of Stale documents. the following data is for information purposes only and is not an official record. Certified copies may be obtained from that individual state's Deportment of State. Your DPPA Permissible use is: Debt Recovery/Fraud Your ekart Permissible Use is: Legal Comphance Copyright O 2017 LexisNexis. a division of Reed Elsevier Inc. All Rights Reserved. D& B: For internal use only SDNY_GM_00059741 CONFIDENTIAL - PURSUANT TO FED. R.QQN(FIDENTIAL DB-SDNY-0022565 EFTA_00 I 7029 I EFTA01296925 Page 2 Worldbase, 03/25/2017, NEPTUNE. LLC Copyright 2017 Dun & Bradstreet, Inc dun&bradstreet Worldbase March 25, 2017 NEPTUNE, LLC 608 S 19TH ST (registered address) WEST DES MOINES, IA 502655505 USA COUNTY: POLK REGION: NORTH AMERICA COMMUNICATIONS CABLE TELEX: ONNNNANP COMPANY IDENTIFIERS DUNS: O7-481-6395 COMPANY INFORMATION FOUNDED: 2O14 EMPLOYEES HERE: 6 - Estimate EMPLOYEES TOTAL: 6 - Estimate COMPANY TYPE: Private EXECUTIVES CEO: AIXA MOORE, PRINCIPAL DESCRIPTION For internal use only SDNY_GM_00059742 CONFIDENTIAL - PURSUANT TO FED. R.QQINEIDENTIAL DB-SONY-0022566 EFTA (H) 170292 EFTA01296926 Page 3 Worldbase, 03/25/2017, NEPTUNE. LLC UNDETERMINED MARKET AND INDUSTRY SIC CODES: 9999 - Nonclassified establishment LOAD-DATE: May 6, 2017 LECAL RESULTS: Court Cases: Thomas J. Neary et al., Plaintiffs, v Arthur Burns et al., Defendants. 6290/2011 SUPREME COURT OF NEW YORK, KINGS COUNTY 44 Misc. 3d 280; 982 N.Y.S.2d 868; 2014 N.Y. Misc. LEXIS 1404; 2014 NY Slip Op 24083 March 28, 2014 PRIOR HISTORY: 363-367 Neptune Ave., LLC v Neary, 30 Misc 3d 779, 917 NYS2d 544, 2010 N.Y. Misc. LEXIS 6327 (2010) CASE SUMMARY: OVERVIEW: HOLDINGS: [1]-Plaintiffs' claims against a former building manager and a limited liability company (LLC), arising from the sale of property and disputed distribution of proceeds held by the LLC, survived challenge by a motion to dismiss because they had standing to sue, as they were members of the LLC in their individual capacities because they each held an ownership interest in the LLC; [2]-A holder of a beneficial interest, as a beneficiary of the estate of a deceased LLC interest holder, had standing under Business Corporation Law § 626(a), which was applicable to the LLC; [3]-Allegations of the former managers conduct were sufficient to state claims under Limited Liability Company Law §§ 508 and 409(a) because they asserted that he engaged in bad faith and intentional misconduct. For internal use only SDNY_GM_00059743 CONFIDENTIAL - PURSUANT TO FED. R.CON(F IDENTIAL DB-SDNY-0022567 EFTA_OOI 70293 EFTA01296927 Page 2 44 Misc. 3d 280, *; 982 N.Y.S.2d 868, **; 2014 N.Y. Misc. LEXIS 1404, ***; 2014 NY Slip Op 24083 OUTCOME: Motion to dismiss denied. CORE TERMS: manager, cause of action, wrongfully withheld, net proceeds, tenant, beneficial interest, owed, co-executor's, bad faith, indemnification, individual member, rent- stabilized, apartments, vacate, fair share, sale proceeds, fiduciary duty, amend, ownership interest, affirmative defenses, email, died, unilaterally, withholding, membership, standing to sue, sale of real property, final adjudication, individually, withheld LexisNexis(R) Headnotes Civil Procedure> Pleading & Practice > Pleadings > Amended Pleadings > Leave of Court [HN1]A motion for leave to amend a complaint should be freely granted. absent prejudice or surprise directly resulting from the delay in seeking leave, unless the proposed amendment is palpably insufficient or patently devoid of merit. CPLR 3025(b). Civil Procedure> Justiciability > Standing > General Overview Civil Procedure > Pleading & Practice > Defenses, Demurrers & Objections > Motions to Dismiss [HN2] CPLR 3211(a)(3) provides for dismissal of an action where the party asserting the cause of action has not legal capacity to sue. Rule 3211(a)(3) also embraces the ground of the lack of standing to sue, and this statute is, therefore, available to support a motion to dismiss on this ground. Business & Corporate Law > Corporations > Shareholders > Actions Against Corporations > Standing > General Overview Business & Corporate Law > Limited Liability Companies > Members & Other Constituents Civil Procedure> Justiciability > Standing > General Overview [HN3] A beneficial interest has been recognized as conferring standing upon a party to bring a derivative action on behalf of a corporation pursuant to Business Corporation Law § 626(a), which has been held applicable to limited liability companies. Civil Procedure > Pleading & Practice > Defenses, Demurrers & Objections > Motions to Dismiss Civil Procedure > Parties > Joinder > General Overview [HN4] CPLR 3211(a)(10) provides for the granting of dismissal of a claim against a party based upon the ground that "the court should not proceed in the absence of a person who should be a party." Civil Procedure > Pleading & Practice > Defenses, Demurrers & Objections > Failures to State Claims Civil Procedure> Pleading & Practice > Pleadings > Rule Application & Interpretation [HN5] It is well settled that, as a general rule, on a motion to dismiss the complaint for failure to state a cause of action under CPLR 3211(a)(7), the complaint must be construed For internal use only SDNY_GM_00059744 CONFIDENTIAL - PURSUANT TO FED. R.CON(F IDENTIAL DB-SDNY-0022568 EFTA_00 170294 EFTA01296928 Page 3 44 Misc. 3d 280, *; 982 N.Y.S.2d 868, "; 2014 N.Y. Misc. LEXIS 1404, ***; 2014 NY Slip Op 24083 in the light most favorable to the plaintiff and the pleading is to be afforded a liberal construction (CPLR 3026). The court must also accept the facts as alleged in the complaint and submissions in opposition to the motion as true and accord the plaintiff the benefit of every possible favorable inference. The court, in accepting the facts alleged in the complaint to be true, must determine only whether the facts alleged fit within any cognizable legal theory. Business & Corporate Law > Limited Liability Companies > Members & Other Constituents [HN6] Limited Liability Company Law § 508 refers to limitations on distributions to members. Business & Corporate Law > Limited Liability Companies > Management Duties & Liabilities [HN7] See Limited Liability Company Law § 409(a). Business & Corporate Law > Limited Liability Companies > Management Duties & Liabilities [HN8] See Limited Liability Company Law § 420. HEADNOTES Parties--Standing--Individual with Interest in Limited Liability Company as Part of Group 1. Plaintiff, an individual who was listed in defendant limited liability company's operating agreement as a member of a group that had a single percentage ownership and voting interest, had standing to bring an action against the company and its manager based on allegations that they wrongfully withheld from him his fair share of distributions of the net proceeds of the sale of real property owned by the company. The group, consisting of plaintiff and his two siblings, was referred to as such simply because their interest in the premises derived from their mother. That fact did not negate plaintiffs status as an individual member of the company with an ownership interest equal to one third of the group's percentage interest. Plaintiff was listed as a member in a schedule of the operating agreement, was an initial member of the company at the time of its formation and signed the initial operating agreement. In addition, plaintiff had notified defendant manager that he intended to vote his own membership interest separately from the group. Defendant manager had also previously recognized plaintiff as an individual member in writings and had issued separate checks to him in payment of distributions. Thus, plaintiff established that he was an individual member of the company and entitled to maintain the action in his own right without joinder of the other group members. Parties--Standing--Individual with Interest in Limited Liability Company as Co- Executor and Beneficiary of Estate 2. Plaintiff, an individual who was the co-executor and a beneficiary of his mother's estate, which was listed as a member of defendant limited liability company in its operating agreement, had standing to bring an action against the company and its manager based For internal use only SDNY_GM_00059745 CONFIDENTIAL - PURSUANT TO FED. R.CON(FIDENTIAL DB-SDNY-0022569 EFTA_001 70295 EFTA01296929 Page 4 44 Misc. 3d 280, *; 982 N.Y.S.2d 868, **; 2014 N.Y. Misc. LEXIS 1404, ***; 2014 NY Slip Op 24083 on allegations that they wrongfully withheld from him his fair share of distributions of the net proceeds of the sale of real property owned by the company. Plaintiff did not seek to recover sums due to the estate, but instead sought to recover distributions owed to him individually, which he claimed were wrongfully withheld because he resided as a rent- stabilized tenant at a building owned by another company with the same members. The claim belonged to plaintiff alone and was not shared by his brother, the other co-executor and beneficiary of the estate, who was not a tenant at the premises. Moreover, plaintiff was the transferee of one half of the interest held by his mother and was thus the holder of a beneficial interest, which furnished a basis for plaintiffs individual claims against defendants. Defendant manager had also previously recognized plaintiff as an individual member in writings and had issued separate checks to him in payment of distributions. Parties--Necessary Parties--Action against Limited Liability Company and its Manager--Failure to Join Other Members of Company 3. Plaintiff limited liability company members' action alleging that defendants, the company and its manager, wrongfully withheld from them their fair share of distributions of the net proceeds of the sale of real property owned by the company was not subject to dismissal based on plaintiffs' failure to join all other members of the company (CPLR 3211 [a] [10]). Plaintiffs asserted direct claims to recover for distinct injuries that they individually sustained by defendant managers alleged wrongful conduct, and were thus alleging claims based upon the breach of duty owed directly to them, independent of any duty owed to the company or any of its other members. Nor did plaintiffs seek to recover any sums that might be due to the other members or for any damage to the company. Thus, plaintiffs' claims did not require the joinder of the other company members. Pleading--Sufficiency of Pleading--Action against Limited Liability Company and its Manager--Wrongful Withholding of Distributions 4. Plaintiffs, individual members of a limited liability company, who alleged that defendant, the company's manager, wrongfully withheld from them their fair share of distributions of the net proceeds of the sale of real property owned by the company, sufficiently stated a cause of action for breach of fiduciary duty. Specifically, plaintiffs contended, as established by a letter from defendant, that defendant unilaterally and wrongfully withheld sums from their individual distributions because of their refusal to vacate their rent- stabilized apartments in premises owned by another limited liability company with the same members and which sums were not withheld from other members. Under the company's operating agreement, which referred to Limited Liability Company Law § 409 (a)'s good faith requirement in a managers performance of his or her duties, a company manager is liable for "acts or omissions [that] were in bad faith or involved intentional misconduct or a knowing violation of law." Given plaintiffs' assertions that defendant acted "maliciously, wrongfully, and unlawfully," questions of fact existed as to the issue of whether defendant acted in bad faith. Indemnity--When Claim for Indemnification Available--Indemnification Provision in Limited Liability Company Operating Agreement--Bad Faith Acts by Company Manager For internal use only SDNY_GM_00059746 CONFIDENTIAL - PURSUANT TO FED. R.CON(F IDENTIAL DB-SDNY-0022570 EFTA_00I 70296 EFTA01296930 Page 5 44 Misc. 3d 280, *; 982 N.Y.S.2d 868, "; 2014 N.Y. Misc. LEXIS 1404, ***; 2014 NY Slip Op 24083 5. In an action by plaintiffs, individual members of a limited liability company, alleging that defendant, the company's manager, wrongfully withheld from them their fair share of distributions of the net proceeds of the sale of real property owned by the company, defendant's request for indemnification and reimbursement from defendant company under the operating agreement was denied as premature. Under the terms of the operating agreement, the company would "indemnify and hold harmless each Manager and the Members from and against all claims and demands to the maximum extent permitted under the" Limited Liability Company Law. Section 420 of the Limited Liability Company Law, however, provides that "no indemnification may be made . . . if a judgment or other final adjudication adverse to [a] . manager . . . establishes (a) that his or her acts were committed in bad faith or were the result of active and deliberate dishonesty and were material to the cause of action so adjudicated." Here, the issue of whether defendant manager acted in bad faith in withholding funds from plaintiffs was awaiting final adjudication. COUNSEL: rug Michele Forzley, North Bethesda, Maryland, for defendants. Thomas Torto, New York City, for plaintiffs JUDGES: Carolyn E. Demarest, J. OPINION BY: Carolyn E. Demarest OPINION [1'282] ["`870] Carolyn E. Demarest, J. In this action by plaintiffs Thomas J. Neary (Neary) and Salvatore Benevento (Benevento) (collectively, plaintiffs) against defendants 2784 West 15th Street, LLC (2784 LLC) and Arthur Burns (Burns), Burns moves for an order, pursuant to CPLR 3211, dismissing plaintiffs' complaint in its entirety, and awarding him full reimbursement of his legal fees and costs. Background Salvatore Judice (Mr. Judice) was the owner of two parcels of real property. One of these parcels is located at 2776, 2778, and 2784 West 15th Street, in Brooklyn (block 8996, lots 89, 91, 92) (the 2784 premises), and the other parcel is located at 363-367 Neptune Avenue, in Brooklyn (the Neptune Avenue premises). [1'283] The Neptune Avenue premises consists of two buildings with six units in each of them. When Mr. Judice died in 1973, he left the 2784 premises and the Neptune Avenue premises to his five children, i.e., Grace Burns (Grace), Anna Neary (Anna), Lucy Judice (Lucy), John E. Judice (John), and Julia J. Benevento (Julia), and, by subsequent deeds, ["..2] both of these premises were conveyed to them as tenants in common. Plaintiffs Neary and Benevento have resided virtually their entire lives in residential apartments in the building at 367 Neptune Avenue within the Neptune Avenue premises as rent-stabilized tenants. Anna died in 1987, and she left her estate to her husband, Thomas J. Neary, Sr. (Thomas), who died on August 2, 2004. Thomas' estate passed to plaintiff Thomas Neary, Salvatore Neary (Salvatore), and For internal use only SDNY_GM_00059747 CONFIDENTIAL - PURSUANT TO FED. R.CON(F IDENTIAL DB-SONY-0022571 EFTA_00 170297 EFTA01296931 Page 6 44 Misc. 3d 280, *; 982 N.Y.S.2d 868, "; 2014 N.Y. Misc. LEXIS 1404, "*; 2014 NY Slip Op 24083 Mary Ann Peraccio (Mary Ann), who thereby inherited Thomas' ownership interest both in the 2784 premises and the Neptune Avenue premises. In 2006, the family members that held interests in the 2784 premises and the Neptune Avenue premises agreed to form two limited liability companies (LLCs), i.e., 2784 LLC and 363-367 Neptune Avenue, LLC (Neptune LLC), to which their respective interests in these properties would be transferred, with Ray McRory, Esq. acting as their attorney. On November 10, 2006, the operating agreement of 2784 LLC was executed by its initial members, who were listed as: Grace (by Burns, as her attorney-in-fact), Julia (by Benevento, as her attorney-in-fact), Neary, Salvatore, and Mary Ann. An almost identical ['..3] operating agreement of Neptune LLC was also executed by these members on the same date. The members conveyed their interests in the 2784 premises to 2784 LLC and their interests in the Neptune Avenue premises to Neptune LLC. Pursuant to the operating agreements, Burns was named the manager of both LLCs. Thereafter, John died on March 28, 2007 and his estate passed to Carmel Salerno, Patricia Judice, Joanne Judice Rafaella, and Salvatore Judice (Judice). The estate of John conveyed its interests in the 2784 premises and the Neptune Avenue premises ['"871] to the two LLCs. Lucy Judice died without having children, and her estate conveyed its interest in the 2784 premises and the Neptune Avenue premises to the two LLCs. To reflect these changes, on November 1, 2007, an amended and restated operating agreement for 2784 LLC was executed by all of the initial members, and by the estate of John (by Judice, as the executor), as a new member. Schedule A to 2784 LLC's operating agreement (annexed as exhibit 2 to Bums' motion ["284] papers) lists the voting percentage interests of its members as being: 44.8% for the estate of John, 18.4% for Grace, 18.4% for Julia, and 18.4% for the Neary group, consisting [•""4] of three listed members, i.e., Neary, Salvatore, and Mary Ann. At some time prior to 2011, Julia died, and her estate passed to her two sons, Benevento and Anthony Benevento (Anthony), in equal shares, pursuant to a will which also named them as co-executors. In April 2009, members of Neptune LLC were requested to vote on a proposal to sell the Neptune Avenue premises. Benevento (on behalf of the estate of Julia) and Neary voted no to this proposal. By a letter dated April 21, 2009, the members of Neptune LLC were informed that on April 20, 2009, 73.3% of the Neptune LLC's membership had voted in favor of this proposal, and that, as a result, Burns was authorized to sell the Neptune Avenue premises at the highest and best price possible and to take any necessary steps to do so, including vacating all tenants from such premises. In September 2009, Burns, on behalf of 2784 LLC, executed a purchase agreement to sell the 2784 premises to M & A Realty Services, LLC for a sales price of $1,050,000. In 2010, the 2784 premises were sold with the purchase price for this sale paid in cash and by a purchase money mortgage. Prior to the sale, 2784 LLC's members signed a Certificate of Members of 2784 ["""5] LLC Resolution to Sell Real Property (the certificate) in accordance with section 3.4 of the operating agreement, which required that the manager have prior written approval of a majority vote of all members in order to sell the 2784 premises. The certificate was signed by the estate of John (by Judice), Grace (by Bums, as her attorney-in-fact), the estate of Julia (by Anthony), and the Neary group (by Mary Ann, as the authorized representative), and reflected their respective interests in 2784 LLC For internal use only SDNY_GM_00059748 CONFIDENTIAL - PURSUANT TO FED. R.QQN(F IDENTIAL DB-SDNY-0022572 EFTA_00I 70298 EFTA01296932 Page 7 44 Misc. 3d 280, *; 982 N.Y.S.2d 868, "; 2014 N.Y. Misc. LEXIS 1404, ***; 2014 NY Slip Op 24083 of 44.8% for the estate of John, 18.4% for Grace, 18.4% for the estate of Julia, and 18.4% collectively for the Neary group. Using the funds obtained from this sale of the 2784 LLC premises, Burns, as the manager of 2784 LLC, gave a mortgage and loan from it to Neptune LLC for $250,000 at five percent interest with a mortgage on the Neptune Avenue premises to be paid when these premises are sold. These monies were allegedly used to buy out the non-family tenants of the Neptune Avenue premises so as to have them vacate their apartments there. On August 13, 2010, an action was filed by Neptune LLC against Neary, Benevento, Carmel Salerno (Carmel), and the estate of Julia (363-367 Neptune Avenue, LW v Neary, Sup Ct, [- 285] Kings County, index No. 9282/10, 30 Misc. 3d 779, 917 NYS2d 544) ["**6] (the Neptune Avenue action) for a judgment requiring Neary, Benevento, and Carmel to vacate their apartments, requiring the estate of Julia to take action to remove Neary, Benevento, and Carmel from such apartments, and awarding damages in the sum of $108,000 against Neary, $216,000 against Benevento, and $324,000 against Carmel due to their failure to vacate. In the Neptune Avenue action, Neary and Benevento asserted that Burns had harassed them, refused to make repairs to the building, and [""872] denied them essential services in an effort to make the building uninhabitable so that they would be forced to vacate it. Neptune LLC, in that action, contended that it was entitled to sell and vacate the Neptune Avenue premises pursuant to the operating agreement for Neptune LLC. By a decision and order dated December 15, 2010, Justice Mark I. Partnow denied a motion by Neptune LLC to require Neary, Benevento, and Carmel to vacate the Neptune Avenue premises, finding that while Neptune LLC could elect to dissolve and sell the premises pursuant to the majority vote of its members, it could not evict Neary, Benevento, and Carmel and was required rm to sell the Neptune Avenue premises subject to their rent-stabilized leases. In December 2010, Burns resigned as the manager of 2784 LLC, and Judice is now its current manager. Burns claims that he and now Judice have been distributing 2784 LLC funds from the sale of the 2784 premises pro rata to the members after enough cash is accumulated and obligations paid, and that plaintiffs admit that they received distributions as members. The Neptune Avenue premises have not yet been sold and Benevento and Neary remain in occupancy as tenants there. On March 18, 2011, plaintiffs filed the instant action, which initially named 2784 LLC and Burns, along with McRory and McRory, PLLC and Raymond McRory, Esq. (collectively, the McRory defendants), as defendants. On May 2, 2011, plaintiffs served a complaint, and, on May 16, 2011, plaintiffs served an amended verified complaint as of right pursuant to CPLR 3025 (a). Plaintiffs' amended complaint alleged that Burns, acting on behalf of 2784 LLC and his [` 286] own personal interests, unilaterally and improperly diverted funds belonging to 2784 LLC for purposes unrelated to it, including making payments in excess of $200,000 to buy out the tenants who resided rill in the building at the Neptune Avenue premises, and making payments of legal fees to the McRory defendants unrelated to 2784 LLC. It further alleged that Bums, acting on behalf of 2784 LLC and his own personal interests, unilaterally and improperly withheld from the net proceeds realized from the sale of the 2784 premises distributions due to them because they had not vacated their rent-stabilized apartments at the Neptune Avenue premises. Specifically, plaintiffs alleged For internal use only SDNY_GM_00059749 CONFIDENTIAL - PURSUANT TO FED. R.WN(F IDENTIAL DB-SDNY-0022573 EFTA_00 170299 EFTA01296933 Page 8 44 Misc. 3d 280, *; 982 N.Y.S.2d 868, "; 2014 N.Y. Misc. LEXIS 1404, ***; 2014 NY Slip Op 24083 that Bums withheld the sum of approximately $40,000 (as of the date of the amended complaint) in partial distributions due to them from the sale of the 2784 premises. Plaintiffs asserted that Burns, as the manager of 2784 LLC, owed them a fiduciary duty as members of 2784 LLC. Plaintiffs' amended complaint alleged three causes of action. Plaintiffs' first cause of action against Burns and 2784 LLC sought an accounting of the affairs and monies of 2784 LLC. Plaintiffs' second cause of action against Burns alleged that Burns diverted monies belonging to 2784 LLC and withheld distributions due to them from the sale of the 2784 premises, which constituted a breach of his fiduciary duties to them. It sought a judgment ['..9] surcharging Burns in the amounts which are determined to be improperly diverted, converted, and/or misappropriated. Plaintiffs' third cause of action against the McRory defendants sought a judgment requiring them to disgorge all legal fees paid to them by 2784 LLC which were unrelated to 2784 LLC. On September 15, 2011, Burns served an answer to plaintiffs' amended complaint, which denied its material allegations and raised four affirmative defenses. Burns' first affirmative defense alleged that plaintiffs' amended complaint fails to state a cause of action. Burns' second affirmative ["873] defense alleged that the court should not proceed in the absence of persons who should be parties. Burns' third affirmative defense alleged that Benevento has no standing and is not a proper party to this action as he is a co-executor acting without authority in relation to the estate of Julia, who was the member of 2784 LLC, and that Neary has no standing and is not a proper party to this action as he is a member of a group called the Neary group that is the member of 2784 LLC. Burns' third affirmative defense further alleged that plaintiffs' amended complaint should be dismissed for failure to join indispensable r""10] parties. Bums' fourth affirmative defense alleged that the court lacks subject matter jurisdiction over plaintiffs' claims. Following discussions with the attorneys for the McRory defendants and limited document production by them, plaintiffs, by a stipulation of discontinuance dated January 27, 2012, p287] discontinued this action as against the McRory defendants. On February 23, 2012, Grace (who, as noted above, was Burns' mother and a member of 2784 LLC) died at the age of 99 years. By notice of motion dated March 6, 2013, plaintiffs moved for a default judgment, pursuant to CPLR 3215, against 2784 LLC. On April 4, 2013, plaintiffs withdrew that motion and extended the time for 2784 LLC to serve an answer to their amended complaint in exchange for its production of bank statements for its checking account, which 2784 LLC produced in or about the end of May 2013. 2784 LLC has not yet interposed an answer to plaintiffs' amended complaint. On June 28, 2013, Burns produced some documents in response to a February 25, 2013 notice to produce for discovery and inspection which was served by plaintiffs. Plaintiffs assert that their review of 2784 LLC's bank statements and other documents produced r .., in this action have revealed that they have direct claims against Burns and 2784 LLC for the alleged wrongful withholding from them of over $80,000 in distributions due to them from the net sale proceeds from the 2784 premises. For internal use only SDNY_GM_00059750 CONFIDENTIAL - PURSUANT TO FED. R.CON(F IDENTIAL DB-SDNY-0022574 EFTA_OOI 70300 EFTA01296934 Page 9 44 Misc. 3d 280, *; 982 N.Y.S.2d 868, **; 2014 N.Y. Misc. LEXIS 1404, ***; 2014 NY Slip Op 24083 On September 11, 2013, plaintiffs moved for leave to serve an amended summons and second amended verified complaint. Plaintiffs sought to amend the summons and first amended complaint to delete the McRory defendants from the caption and to remove the cause of action asserted as against them to reflect their voluntary discontinuance of all claims against them. Plaintiffs further sought to amend the first amended complaint in order to limit it to direct claims against 2784 LLC and Burns solely for wrongfully withholding from them over $80,000 in distributions due to them from the net sale proceeds from the 2784 premises. Plaintiffs' second amended verified complaint (annexed as exhibit A to plaintiffs' motion papers in motion sequence No. 2) alleges that Neary is a member of 2784 LLC, having a 6.133% ownership interest therein. It further alleges that Benevento has a 9.2% beneficial interest in 2784 LLC through the estate of Julia, who was a member of 2784 LLC, r**121 having an 18.4% ownership interest therein, and that Benevento was and is the co- executor of the estate of Julia and is entitled to 50% of Julia's estate. Plaintiffs' second amended complaint sets forth that on January 20, 2010, 2784 LLC, under the sole and exclusive management of Burns, sold the 2784 premises to M & A Realty Services, LLC for the sum of $1,050,000. It alleges that as of r28Eq January 22, 2010, the sum of $544,018.29 was available for distribution to 2784 LLC members from the net proceeds of the sale of the 2784 premises, and that, as of March [*874] 9, 2010, distributions of the net proceeds from the sale of the 2784 premises were made to 2784 LLC members, including distributions paid directly to Neary and Benevento, as members. It asserts that Burns, in breach of independent fiduciary duties he owed to Neary and Benevento in their own, individual capacities, unilaterally and wrongfully withheld from them their fair share of distributions due to them from the net proceeds of this sale in violation of the operating agreement and applicable Limited Liability Company Law. Specifically, it alleges that Burns withheld from these sale proceeds the sum of $35,745.83 from Neary and the ["'13] sum of $44,831.58 from Benevento. Plaintiffs' second amended complaint alleges three causes of action. Plaintiffs' first cause of action against 2784 LLC alleges that 2784 LLC is in possession and control of the funds wrongfully withheld from them by Burns from their share of distributions of the net sale proceeds of the 2784 premises in violation of the operating agreement and applicable law, and that they have been damaged in the total sum of $80,577.41, plus interest from March 9, 2010. Plaintiffs' second cause of action alleges a direct claim by Neary against Burns, which asserts that Burns owed an independent fiduciary duty to Neary, as a member of 2784 LLC with a 6.133% ownership interest, that Burns wrongfully withheld the sum of $35,745.83 from his share of distributions from the net proceeds of the sale of the 2784 premises, and that he is entitled to a judgment in this sum. Plaintiffs' third cause of action alleges a direct claim by Benevento against Burns, which asserts that Burns owed an independent fiduciary duty to Benevento as a member of 2784 LLC with a 9.2% ownership interest and/or as the holder of a 9.2% beneficial interest in 2784 LLC through the estate of Julia, that [—la] Burns wrongfully withheld the sum of $44,831.58 from his share of distributions from the net proceeds of the sale of the 2784 premises, and that he is entitled to a judgment in this sum. For internal use only SDNY_GM_00059751 CONFIDENTIAL - PURSUANT TO FED. R.QQN(F IDENTIAL DB-SONY-0022575 EFTA_00170301 EFTA01296935 Page 10 44 Misc. 3d 280, *; 982 N.Y.S.2d 868, 2014 N.Y. Misc. LEXIS 1404, ***; 2014 NY Slip Op 24083 On October 24, 2013, Burns filed his instant motion for an order dismissing plaintiffs' amended verified complaint. In his motion papers, Bums opposed plaintiffs' motion to amend and sought an order denying plaintiffs' motion: 2784 LLC has not [*289] submitted any papers with respect to Burns' motion, and it took no position at oral argument. ' Subsequent to oral argument, the court received a purported "reply" to Burns motion to dismiss which included further opposition to plaintiffs'proposed amendment to their amended complaint. These papers have been retected by the court and have not been considered (see CPLR 2214 (Ial. (cit. In support of their motion to amend, plaintiffs maintained that their proposed amendment was meritorious since they were entitled to their full share of distributions from these sale proceeds and that the withholding of over $80,000 from their distributions was wrongful and improper. Moreover, no prejudice was demonstrated by Burns with respect to the proposed amendment since it simply r ..15] streamlines plaintiffs' amended complaint and does not assert any new facts or causes of action against Bums. In addition, there could be no prejudice to 2784 LLC since, as noted above, it has not as yet served an answer in this action, and prejudice to warrant denial of leave to amend requires some indication that the defendants were hindered in the preparation of their case or were prevented from taking some measure in support of their position (see McGhee v Odell, 96 AD3d 449, 450, 946 NYS2d 134 [1st Dept 2012]; Kocourek v Booz Allen Hamilton Inc., 85 AD3d 502, 504, 925 NYS2d 51 ('"875] [1st Dept 2011]). Furthermore, while there was a two-year delay by plaintiffs in seeking such leave, discovery is ongoing, and depositions have not yet been held (see Rosicki, Rosicki & Assoc., P.C. v Cochems, 59 AD3d 512, 514, 873 NYS2d 184 [2d Dept 2009]). Thus, since [HN1] a motion for leave to amend a complaint should be freely granted, absent prejudice or surprise directly resulting from the delay in seeking leave, unless the proposed amendment is palpably insufficient or patently devoid of merit (see CPLR 3025 [b]; Aurora Loan Servs., LLC v Thomas, 70 AD3d 986. 987, 897 NYS2d 140 [2d Dept 2010]; Lucido v Mancuso, 49 AD3d 220, 222, 851 NYS2d 238 [2d Dept 2008], appeal withdrawn ['..16] 12 NY3d 813, 908 NE2d 928, 881 NYS2d 20 [2009]), and, here, the proposed amendment was not palpably insufficient or patently devoid of merit and there was also no showing of prejudice or surprise resulting directly from plaintiffs' delay in seeking leave, the court, at oral argument held on November 20, 2013, granted plaintiffs motion for leave to file their second amended verified complaint. While Burns' motion was originally directed as against plaintiffs' first amended complaint, since the court has granted plaintiffs' motion to amend their first amended complaint during the pendency of Burns' motion, the court will address this motion as against plaintiffs' second amended complaint (see 49 W. 12 Tenants Corp. v Seidenberg, 6 AD3d 243, 243, 774 NYS2d 339 [1st Dept 2004];Livadiotakis v. Tzitzikalakis, ["29O] 302 AD2d 369, 370, 753 NYS2d 898 [2d Dept 2003]; Sage Realty Corp. v Proskauer Rose, 251 AD2d 35, 38, 675 NYS2d 14 [1st Dept 1998]). Discussion In support of his instant motion, Bums argues that this action must be dismissed based upon plaintiffs' lack of standing to sue. [FIN2] CPLR 3211 (a) (3) provides for dismissal of For internal use only SDNY_GM_00059752 CONFIDENTIAL - PURSUANT TO FED. R.QQN(F IDENTIAL DB-SDNY-0022576 EFTA_00 170302 EFTA01296936 Page 11 44 Misc. 3d 280, *; 982 N.Y.S.2d 868, "; 2014 N.Y. Misc. LEXIS 1404, ***; 2014 NY Slip Op 24083 an action where "the party asserting the cause of action has not legal capacity to sue." CPLR 3211(a) (3) also embraces the ground of the lack [min of standing to sue, and this statute is, therefore, available to support a motion to dismiss on this ground (see Hecht v Andover Assocs. Mgt. Corp., 114 AD3d 638, 979 NYS2d 650, 2014 NY Slip Op 632 [2d Dept 2014]). Burns, in arguing that plaintiffs lack standing to sue, relies upon the third affirmative defense in his answer to the first amended complaint and contends that plaintiffs are not proper parties and lack standing to sue 2784 LLC and him, as its former manager, because they are allegedly not members of 2784 LLC in their individual capacities. Burns argues that Neary is not a proper party and lacks standing to sue because the member of 2784 LLC is the Neary group, as opposed to Neary. He points to schedule A of the operating agreement (exhibit 2 to his motion papers), which lists the Neary group as consisting of three members with an 18.4% voting percentage interest, and the footnote to that schedule which states that the three Nearys (Neary, Salvatore, and Mary Ann) have each contributed 100% of their respective undivided interest as tenants in common in the 2784 premises to 2784 LLC, and that "[t]he Neary Group owns an 18.4% Member Interest as a group," and "has appointed Mary Ann . . . to represent [***18] them in voting their total 18.4% Voting Percentage Interest until otherwise notified in writing by them." [1] Burns' argument must be rejected. The membership interest of the Nearys was referred to as the Neary group simply because their interest in the 2784 premises derived from Anna and thereafter passed to Neary and his two siblings, which ["876] formed the Neary group. The mere fact that Neary permitted Mary Ann to vote the collective 18.4% of the Neary group does not negate Neary's status as an individual member of 2784 LLC in his own individual right with a 6.133% (one third of 18.4%) ownership interest. Indeed, schedule A of the operating agreement lists Neary separately as a "Member' and sets forth his residence, address and Social Security number. In fact, Weary was an initial member of 2784 LLC at the time of its formation [*291] in 2006, and he signed the initial operating agreement and the amended and restated operating agreement as an "Initial Member" (see exhibit A to plaintiffs' opposition papers). Additionally, Neary, by an email dated February 24, 2010 (exhibit C to plaintiffs' opposition papers), gave Bums written notice of his intent to vote his own 6.133% membership interest separately. (***191 Thus, Neary has established that he is, in fact, an individual member of 2784 LLC and entitled to maintain this action in his own right without the joinder of the other members of the Neary group. Burns further asserts that Benevento is not a member of 2784 LLC, but, rather, the member is the estate of Julia. He argues that Benevento cannot claim a payment allegedly due to the estate of Julia. He states that while Benevento is a co-executor of the estate of Julia, he is not acting on behalf of the estate with his brother, Anthony, who is the co- executor. [2] This argument by Burns is unavailing since Benevento is not making a claim on behalf of the estate of Julia, but in his own right as the holder of a beneficial interest of 9.2% of 2784 LLC. Benevento does not seek to recover sums due to the estate of Julia. Rather, he seeks to recover distributions from the sale of the 2784 premises owed to him individually which, he claims, Burns wrongfully withheld from him by making deductions to his share of For internal use only SDNY_GM_00059753 CONFIDENTIAL - PURSUANT TO FED. R.QQN(F IDENTIAL DB-SONY-0022577 EFTA_00 170303 EFTA01296937 Page 12 44 Misc. 3d 280, *; 982 N.Y.S.2d 868, "; 2014 N.Y. Misc. LEXIS 1404, ***; 2014 NY Slip Op 24083 such sale proceeds because he resides as a rent-stabilized tenant at the Neptune Avenue premises. This claim belongs to Benevento and is not shared by Anthony, the other beneficiary and the [""20] co-executor of the estate of Julia, who is not a tenant at the Neptune Avenue premises and received his full share of such proceeds without any deductions. Thus, Benevento, and not the estate of Julia, is the real party in interest in this litigation. Moreover, it is undisputed that Benevento is the transferee of one half of the interest held by Julia, and, thus, the holder of a "beneficial interest" in 2784 LLC. Such [HN3] a beneficial interest has been recognized as conferring standing upon a party to bring a derivative action on behalf of a corporation pursuant to Business Corporation Law § 626 (a) (see Bernfeld v Kurilenko, 91 AD3d 893, 894, 937 NYS2d 314 [2d Dept 2012]; Shui Kam Chan v Louis, 303 AD2d 151, 152, 756 NYS2d 534 [1st Dept 2003]), which has been held applicable to limited liability companies (see Tzolis v Wolff, 10 NY3d 100, 121, 884 NE2d 1005, 855 NYS2d 6 [2008]). While this is not a derivative action, this beneficial interest likewise furnishes a basis for Benevento's individual claims against 2784 LLC and Burns, and the fact that [.192] Benevento obtained his interest through the estate of Julia does not deprive him of standing in this action (see Bernfeld, 91 AD3d at 894). Furthermore, Burns previously recognized and acknowledged both r..211 Neary and Benevento as members of 2784 LLC. An email by Bums dated February 9, 2009 (exhibit B to plaintiffs' opposition papers) stated that "the three Nearys . are direct owners" of 2784 LLC. An email by Burns dated February 22, 2010 (exhibit 6 to Burns' motion papers) regarding distributions sent to Neary and Benevento inquired r8771 as to "[h]ow do the Nearys want their checks" and whether they wanted "[o]ne to Mary Ann or 1/3 to each sib[ling]." Burns, in this email, further inquired as to how he should distribute Julia's funds, noting that the checks would have to be made out to her estate, and he asked whether he should issue two checks, or one each with the co-executors name also on the check. He additionally stated, in this email, that he "only wanted] to hear from members," that "[t]he Nearys should elect if they want to vote as a group or individually," and that the Beneventos will have to "decide themselves." By an email dated February 24, 2010 (exhibit C to plaintiffs' opposition papers), Neary responded that he wanted the check issued to him. Significantly, plaintiffs point out that Bums has already issued separate checks to them in payment of their distributions of [""*22] the net sale proceeds. and that they are now simply complaining that they did not receive the full amount due to them. Burns, in paragraph 17 of his attorney's affirmation in support of his motion, admits that plaintiffs have "received distributions." Thus, by such distributions, Burns has acknowledged Neary's membership interest and Benevento's beneficial membership in 2784 LLC and their rights to receive such distributions. Notably, in the December 15, 2010 decision and order in the Neptune Avenue action, Justice Partnow previously acknowledged that Neary is a member of Neptune LLC and that Benevento has a beneficial interest in Neptune LLC. Burns, in his attorney's affirmation, has admitted that both Neptune LLC and 2784 LLC "have identical members with only a slight difference in percentage ownership." Therefore, it follows that Neary is a member of 2784 LLC in his own right in the same way that he is a member of Neptune For internal use only SDNY_GM_00059754 CONFIDENTIAL - PURSUANT TO FED. R.CON(F IDENTIAL DB-SDNY-0022578 EFTA_OOI 70304 EFTA01296938 Page 13 44 Misc. 3d 280, *; 982 N.Y.S.2d 868, 2014 N.Y. Misc. LEXIS 1404, ***; 2014 NY Slip Op 24083 LLC, and that Benevento holds a beneficial interest in 2784 LLC in his own right in the same way that he holds a beneficial interest in Neptune LLC. p293] Thus, Neary and Benevento do not lack standing to maintain this action. Dismissal of this action, pursuant to CPLR 3211 (a) (3), ["""23] must, therefore, be denied. Burns further contends that plaintiffs have failed to join the other members of 2784 LLC and that, therefore, this action must be dismissed, pursuant to [HN4] CPLR 3211 (a) (10), which provides for the granting of dismissal of a claim against a party based upon the ground that "the court should not proceed in the absence of a person who should be a party." [3] This contention by Burns is devoid of merit since plaintiffs' second amended complaint asserts direct claims by plaintiffs to recover for distinct injuries that they individually sustained by Burns' alleged wrongful withholding of their proportionate share of distributions of the net proceeds from the sale of the 2784 premises. Plaintiffs are thus alleging claims based upon the breach of a duty owed directly to them, independent of any duty owed to 2784 LLC or any of its other members (see generally Abrams v Donati, 66 NY2d 951, 953, 489 NE2d 751, 498 NYS2d 782 [1985], rearg denied 67 NY2d 758, 490 NE2d 1234, 500 NYS2d 1028 [1986];Behrens v Metropolitan Opera Assn., Inc., 18 AD3d 47, 50, 794 NYS2d 301 [1st Dept 2005]; Lawrence Ins. Group, Inc. v KPMG Peat Marwick LLP, 5 AD3d 918, 919, 773 NYS2d 164 [3d Dept 2004]). Plaintiffs do not seek to recover any sums that may be due to the other members of r'24] 2784 LLC or for any damage to 2784 LLC. Plaintiffs' claims relate only to their own direct claims as against Burns and 2784 LLC and, as a result, do not require the joinder of the other members of 2784 LLC. Consequently, ['"878] dismissal of plaintiffs' action for failure to join necessary parties must be denied. Burns also contends that this action must be dismissed, pursuant to CPLR 3211 (a) (7), based upon plaintiffs' failure to state a cause of action. [HN5] "It is well settled that, as a general rule, on a motion to dismiss the complaint for failure to state a cause of action under CPLR 3211 (a) (7), the complaint must be construed in the light most favorable to the plaintiff' (Gruen v County of Suffolk, 187 AD2d 560, 562, 590 NYS2d 217 [2d Dept 1992]; see also Rosen v Watermill Dev. Corp., 1 AD3d 424, 425, 768 NYS2d 474 [2d Dept 2003)), and the pleading is to be afforded a liberal construction (CPLR 3026). The court must also accept the facts as alleged in the complaint and submissions in opposition to the motion as true and accord the plaintiff "the benefit of every possible favorable inference" (Sokoloff v Harriman Estates Dev. Corp., 96 NY2d 409, 414, 754 NE2d 184, 729 NYS2d 425 [2001]; see also Thomas v LaSalle Bank N.A., 79 AD3d 1015, 1017, 913 NYS2d 742 [2d Dept 2010]). r25] The court, in accepting the facts p294] alleged in the complaint to be true, must " 'determine only whether the facts alleged fit within any cognizable legal theory " (Ruffin° v New York City Tr. Auth., 55 AD3d 817, 818, 865 NYS2d 667 [2d Dept 2008], quoting Moms v Morris, 306 AD2d 449, 451, 763 NYS2d 622 [2d Dept 2003]; see also Hurrell-Harring v State of New York, 15 NY3d 8, 20, 930 NE2d 217, 904 NYS2d 296 [2010]; Goldman v Metropolitan Life Ins. Co., 5 NY3d 561, 570-571, 841 NE2d 742, 807 NYS2d 583 [2005]). Burns argues that plaintiffs have failed to state a cause of action because there was no wrongdoing by him. Burns' attorney asserts that Bums sent emails discussing at length For internal use only SDNY_GM_00059755 CONFIDENTIAL - PURSUANT TO FED. R.CON(F IDENTIAL DB-SONY-0022579 EFTA_00 170305 EFTA01296939 Page 14 44 Misc. 3d 280, *; 982 N.Y.S.2d 868, "; 2014 N.Y. Misc. LEXIS 1404, ***; 2014 NY Slip Op 24083 that 2784 LLC would give a loan to Neptune LLC and that this loan was authorized by the members. She further asserts that there is no damage to any member because the $250,000 loaned by 2784 LLC is earning interest at five percent and is secured by the real estate, and that when the Neptune Avenue premises are sold, the mortgage will be paid to 2784 LLC with interest and all of the members of both 2784 LLC and Neptune LLC will receive their pro rata shares. She also states that plaintiffs received payments at the same time and "in pro rata amounts as the other members." The second amended ["**26] complaint, however, does not challenge the $250,000 loan made by 2784 LLC to Neptune LLC and does not allege that the sale of the 2784 premises was unauthorized. Rather, plaintiffs assert that Bums wrongfully deprived them of their fair share of the distributions from the net proceeds of the sale of these premises. Specifically, plaintiffs contend that Burns unilaterally and wrongfully withheld sums from their individual distributions because of their refusal to vacate their rent-stabilized apartments at the Neptune Avenue premises. Plaintiffs have annexed a letter by Bums dated March 9, 2010 (exhibit E to plaintiffs' opposition papers), which establishes that Burns, referring to Benevento's and Neary's apartments at the Neptune Avenue premises, unilaterally deducted from their individual distributions of the net sale proceeds of the 2784 premises that were issued by 2784 LLC in March 2010, amounts for "disparate benefits" that Burns claims they received by virtue of their rent-stabilized tenancies at the Neptune Avenue premises. This letter shows that in contrast to the distributions to plaintiffs, these sums were not deducted from the distributions received by the other two Neary [" -27] members (Salvatore and Mary Ann), Anthony (Benevento's brother), ["879] or Grace, who were paid their distributions in full. 295] Burns further argues that he should be absolved from liability pursuant to article 4.5 of the operating agreement (exhibit 7 to Burns' motion papers), which provides as follows: "A Manager shall not be personally liable to the Company or its Members for damages for any breach of duty as a Manager, except for any matter In respect to which such Manager shall be liable by reason that, in addition to any and all other requirements for such liability. there shall have been a judgment or other final adjudication adverse to such Manager that establshes that such Manager's acts or omissions were in bad faith or Involved intentional misconduct or a knowing violation of law or that such Manager personally gained in fact a financial profit or other advantage to which such Manager was not legally entitled or that with respect to a distnbution the subject of Section 508 of the [Limited Liability Company Law]. such Manager's acts were not performed in accordance with Section 409 of the [Limited Liability Company Law]" [HN6] Limited Liability Company Law § 508 refers to limitations ["**28] on distributions to members. Limited Liability Company Law § 409 (a) provides that [HN7] "[a] manager shall perform his or her duties as a manager, including his or her duties as a member of any class of managers, in good faith and with that degree of care that an ordinarily prudent person in a like position would use under similar circumstances." [4] Bums contends that he did not act in bad faith or engage in intentional misconduct. However, plaintiffs' allegations, which must be deemed true for purposes of this motion, sufficiently allege such bad faith, asserting that Burns acted "maliciously, wrongfully, and unlawfully," and in breach of his fiduciary duties. Thus, despite Bums' attomey's argument that Burns acted properly, questions of fact are raised as to this issue. For internal use only SDNY_GM_00059756 CONFIDENTIAL - PURSUANT TO FED. R.CON(F IDENTIAL DB-SONY-0022580 EFTA_00I 70306 EFTA01296940 Page 15 44 Misc. 3d 280, *; 982 N.Y.S.2d 868, 2014 N.Y. Misc. LEXIS 1404, ***; 2014 NY Slip Op 24083 Burns additionally argues that he is entitled to be indemnified and reimbursed for the expenses which he has incurred related to this litigation pursuant to article 4.7 of the operating agreement (exhibit 7 to Bums' motion papers), which provides that "[t]he Company shall indemnify and hold harmless each Manager and the Members from and against all claims and demands to the maximum extent permitted under the [Limited Liability ["""29] Company Law]." [5] Bums requests that his motion "serve as a cross claim" against 2784 LLC for his legal fees and indemnification [*296] pursuant to article 4.7 of the operating agreement. Such a request is procedurally improper. Burns has not yet interposed an answer to plaintiffs' second amended complaint nor did he include a cross claim against 2784 LLC for indemnification in his answer to plaintiffs' first amended complaint. Moreover, there has been no final adjudication on the issue of whether Burns breathed his duties under the operating agreement, and such a finding would defeat his claim for indemnification pursuant to Limited Liability Company Law § 420, which provides as follows: (HN8) 'Subject to the standards and restrictions, if any, set forth in its operating agreement, a limited liability company may, and shall have the power to, Indemnify and hold harmless, and advance expenses to, any member, manager or other person, or any testator or intestate of such member, manager or other person, from and against any and all claims and demands whatsoever; provided, however, that no indemnification may be made to or on behalf of any member, manager or other person if a (" 8ab) judgment or other final ("•30l adjudication adverse to such member. manager or other person establishes (a) that his or her acts were committed in bad faith or were the result of active and deliberate dishonesty and were material to the cause of action so adjudicated or (b) Mat he or she personally gained in fact a financial profit or other advantage to which he or she was not legally entitled." Consequently, Burns' request for indemnification and reimbursement under the operating agreement must be denied as premature (see Limited Liability Company Law § 420). Conclusion Accordingly, Burns' motion is denied in its entirety. THIS DATA IS FOR INFORMATIONAL PURPOSES ONLY* ** CIVIL SUITS FROM NEW JERSEY SUPERIOR COURT Defendant: GEORGE GROSSOS; NEPTUNE LLC Defendant Address: GEORGE GROSSOS Plaintiff: CHOI KYUNGKON Number: L00568215 Vendor Number: SC-56820000-2015 For internal use only SDNY_GM_00059757 CONFIDENTIAL - PURSUANT TO FED. R.Q;;;)N(F IDENTIAL DB-SONY-0022581 EFTA_00 170307 EFTA01296941 Page 2 CIVIL SUITS FROM NEW JERSEYSUPERIOR COURT Date: 6/16/2015 Filing Type: CIVIL SUIT Case Type: CIVIL NEW FILING County Filed: BERGEN Place Filed: NEW JERSEY SUPERIOR COURT, LAW DIVISION, SPECIAL CIVIL PART Description: SUITS UNDER $ 7,500 00 * • • THIS DATA IS FOR INFORMATIONAL PURPOSES ONLY * * * CIVIL SUITS FROM MARYLAND MARYLAND DISTRICT COURT Defendant: DANIELLE LONGCHAMPS; CHECKER CAB ASSOCIATION INC; M T A; LINDA M BOWMAN; GOODS DEBORAH; EMERGE INC, DEL WOOD KITCHENS; CANDIS MOLDEN; LATOYA M BRANCH; IMECKA T JONES; SHELLEY NELSON; TIKIA B D WRIGHT; MARK POWELL Defendant Address: DANIELLE LONGCHAMPS DANIELLE LONGCHAMPS DANIELLE LONGCHAMPS DANIELLE LONGCHAMPS DANIELLE LONGCHAMPS For internal use only SONY_GM_00059758 CONFIDENTIAL - PURSUANT TO FED. R.CDFNE IDENTIAL DB-SONY-0022582 EFTA_00I 70308 EFTA01296942 Page 3 CIVIL SUITS FROM MARYLANDMARYLAND DISTRICT COURT DANIELLE LONGCHAMPS DANIELLE LONGCHAMPS DANIELLE LONGCHAMPS DANIELLE LONGCHAMPS DANIELLE LONGCHAMPS DANIELLE LONGCHAMPS DANIELLE LONGCHAMPS DANIELLE LONGCHAMPS Plaintiff: KNIGHT DRAKE; JOHNSON AUDWIN; ALIEL MISHAEL ELOHIM PARKER KIM, MIDLAND FUNDING LLC; FIELDS CARL; CHESAPEAKE PLYWOOD LLC; HUGHLEY GREGORY, RENT A CENTER; BAIL FINANCE INC, NEPTUNE LLC BY SINGER REALTY INC, AM PROPERTY MANAGEMENT LLC Number: 010100053252015 Vendor Number: DS-10100053-2015-DI Date: 3/16/2015 Filing Type: CIVIL SUIT For internal use only SDNY_GM_00059759 CONFIDENTIAL - PURSUANT TO FED. R.ctahl(E IDENTIAL DB-SDNY-0022583 EFTA_OOI 70309 EFTA01296943 Page 4 CIVIL SUITS FROM MARYLANDMARYLAND DISTRICT COURT Case Type: CIVIL NEW FILING County Filed: BALT CITY Place Filed: MARYLAND DISTRICT COURT Description: CIVIL SUITS For internal use only SDNY_GM_00059760 CONFIDENTIAL - PURSUANT TO FED. R.CON(F IDENTIAL DB-SDNY-0022584 EFTA_00I70310 EFTA01296944