FILED: NEW YORK COUNTY CLERK 12/06/ :36 PM INDEX NO /2016 NYSCEF DOC. NO. 40 RECEIVED NYSCEF: 12/06/2016 EXHIBIT 1

Transcription

1 FILED: NEW YORK COUNTY CLERK 12/06/ :36 PM INDEX NO /2016 NYSCEF DOC. NO. 40 RECEIVED NYSCEF: 12/06/2016 EXHIBIT 1

2 FILED: NEW YORK COUNTY CLERK 09/06/ :59 AM INDEX NO /2016 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 09/06/2016 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK GREYSTONE FUNDING CORPORATION, Index No. Plaintiff, - against - EAST PEORIA REAL ESTATE, INC.; EDWARDSVILLE REAL ESTATE, LLC; INVERNESS REAL ESTATE, LLC; JOLIET REAL ESTATE HOLDING CO.; MOLINE REAL ESTATE, INC.; NORTHBROOK REAL ESTATE, LLC; PEORIA REAL ESTATE, INC.; ROCKFORD REAL ESTATE, LLC; ST. CHARLES REAL ESTATE, LLC; SCHUETZ ROAD REAL ESTATE, INC.; AND MARK YAMPOL, SUMMONS Defendants. To: East Peoria Real Estate, Inc. Rosewood Care Center of East Peoria 900 Centennial Drive East Peoria, Illinois Edwardsville Real Estate, LLC Rosewood Care Center of Edwardsville 6277 Center Grove Road Edwardsville, Illinois Inverness Real Estate, LLC Rosewood Care Center of Inverness 1800 West Colonial Parkway Inverness, Illinois Joliet Real Estate Holding Co. Rosewood Care Center of Joliet 3401 Hennepin Drive Joliet, Illinois of 10

3 Moline Real Estate, Inc. Rosewood Care Center of Moline th Avenue Moline, Illinois Northbrook Real Estate, LLC Rosewood Care Center of Northbrook 4101 Lake Cook Road Northbrook, Illinois Peoria Real Estate, Inc. Rosewood Care Center of Peoria 1500 West Northmoor Road Peoria, Illinois Rockford Real Estate, LLC Rosewood Care Center of Rockford 1660 South Mulford Road Winnebago, Illinois St. Charles Real Estate, LLC Rosewood Care Center of St. Charles 850 Dunham Road St. Charles, Illinois Schuetz Road Real Estate, Inc. Rosewood Care Center of St. Louis Schuetz Road St. Louis, Missouri Mark Yampol c/o Midwest Administrative Services, Inc Borman Drive, Suite 315 St. Louis, Missouri YOU ARE HEREBY SUMMONED and required to answer the Complaint in this action and to serve a copy of your answer upon Plaintiff s attorneys within 20 days after the service of this summons, exclusive of the day of service, where service is made by delivery to you personally within this state, or within 30 days after completion of service, where service is made in any other manner. In case of your failure to answer, judgment will be taken against you by default for the relief demanded in the Complaint. Plaintiff designates New York County as the place of trial. The basis of the venue designated is the written agreement of the parties to this action. 2 2 of 10

4 Dated: New York, New York September 6, 2016 FOLEY & LARDNER LLP Jill L. Nicholson 321 North Clark Street, Suite 2800 Chicago, Illinois (312) (312) (fax) By: s/barry G. Felder Barry G. Felder Rachel E. Kramer 90 Park Avenue New York, New York (212) (212) (fax) Attorneys for Plaintiff 3 3 of 10

5 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK GREYSTONE FUNDING CORPORATION, - against - Plaintiff, Index No. EAST PEORIA REAL ESTATE, INC.; EDWARDSVILLE REAL ESTATE, L.L.C.; INVERNESS REAL ESTATE, L.L.C.; JOLIET REAL ESTATE HOLDING COMPANY; MOLINE REAL ESTATE, INC.; NORTHBROOK REAL ESTATE, L.L.C.; PEORIA REAL ESTATE, INC.; ROCKFORD REAL ESTATE, L.L.C.; ST. CHARLES REAL ESTATE, L.L.C.; SCHUETZ ROAD REAL ESTATE, INC.; AND MARK YAMPOL, COMPLAINT Defendants. Plaintiff Greystone Funding Corporation ( Greystone ), by its attorneys, Foley & Lardner LLP, as and for its Complaint against the Defendants East Peoria Real Estate, Inc. ( East Peoria ), Edwardsville Real Estate, L.L.C. ( Edwardsville ), Inverness Real Estate, L.L.C. ( Inverness ), Joliet Real Estate Holding Company ( Joliet ), Moline Real Estate, Inc. ( Moline ), Northbrook Real Estate, L.L.C. ( Northbrook ), Peoria Real Estate, Inc. ( Peoria ), Rockford Real Estate, L.L.C. ( Rockford ), St. Charles Real Estate, L.L.C. ( St. Charles ), Schuetz Road Real Estate, Inc. ( Schuetz ) (collectively, the Borrowers ), and Mark Yampol ( Yampol ) (collectively, with the Borrowers, the Defendants ), alleges as follows: NATURE OF COMPLAINT 1. Greystone brings this action against the Defendants for their default under a Forward Trade Interest Rate Protection Agreement dated December 27, 2013 (the Rate Lock of 10

6 Agreement ) between Greystone and the Defendants. A true copy of the Rate Lock Agreement is attached hereto as Exhibit A. PARTIES 2. Plaintiff Greystone is a Virginia corporation with its principal place of business at 1100 Abernathy Road, Suite 900, Atlanta, Georgia. Greystone provides financing and other financial accommodations and products in connection with skilled nursing, assisted living, and other health care facilities. 3. Defendant East Peoria is an Illinois limited liability company and the borrower in connection with a skilled nursing facility named Rosewood Care Center of East Peoria located at 900 Centennial Drive, East Peoria, Illinois. 4. Defendant Edwardsville is an Illinois limited liability company and the borrower in connection with a skilled nursing facility named Rosewood Care Center of Edwardsville located at 6277 Center Grove Road, Edwardsville, Illinois. 5. Defendant Inverness is an Illinois limited liability company and the borrower in connection with a skilled nursing facility named Rosewood Care Center of Inverness located at 1800 West Colonial Parkway, Inverness, Illinois. 6. Defendant Joliet is an Illinois limited liability company and the borrower in connection with a skilled nursing facility named Rosewood Care Center of Joliet located at 3401 Hennepin Drive, Joliet, Illinois. 7. Defendant Moline is an Illinois limited liability company and the borrower in connection with a skilled nursing facility named Rosewood Care Center of Moline located at th Avenue, Moline, Illinois. 2 5 of 10

7 8. Defendant Northbrook is an Illinois limited liability company and the borrower in connection with a skilled nursing facility named Rosewood Care Center of Northbrook located at 4101 Lake Cook Road, Northbrook, Illinois. 9. Defendant Peoria is an Illinois limited liability company and the borrower in connection with a skilled nursing facility named Rosewood Care Center of Peoria located at 1500 West Northmoor Road, Peoria, Illinois. 10. Defendant Rockford is an Illinois limited liability company and the borrower in connection with a skilled nursing facility named Rosewood Care Center of Rockford located at 1660 South Mulford Road, Winnebago, Illinois. 11. Defendant St. Charles is an Illinois limited liability company and the borrower in connection with a skilled nursing facility named Rosewood Care Center of St. Charles located at 850 Dunham Road, St. Charles, Illinois. 12. Defendant Schuetz is a Missouri limited liability company and the borrower in connection with a skilled nursing facility named Rosewood Care Center of St. Louis located at Schuetz Road, St. Louis, Missouri. 13. Defendant Mark Yampol is a citizen and resident of the state of Missouri. FACTS 14. On or about December 27, 2013, Greystone and the Defendants (collectively, the Parties ) entered into the Rate Lock Agreement pursuant to which Greystone agreed to provide certain interest rate protection prior to the issuance and acceptance by each Borrower of a (i) firm commitment to insure by the United States Department of Housing and Urban Development ( HUD ) through the Federal Housing Administration ( FHA ) for FHA mortgage insurance for each of the proposed loans to the Borrowers (the Proposed Loans ) that would be refinanced 3 6 of 10

8 pursuant to Section 232/223(a)(7) of the National Housing Act (each a HUD Commitment and collectively the HUD Commitments ) and (ii) a loan commitment to make each of the Proposed Loans to the Borrowers by Greystone (each a Greystone Commitment and collectively the Greystone Commitments ). 15. Each of the Proposed Loans related to certain skilled nursing facilities located in Illinois and Missouri named Rosewood Care Center of East Peoria, Rosewood Care Center of Edwardsville, Rosewood Care Center of Inverness, Rosewood Care Center of Joliet, Rosewood Care Center of Moline, Rosewood Care Center of Northbrook, Rosewood Care Center of Peoria, Rosewood Care Center of Rockford, Rosewood Care Center of St. Charles, and Rosewood Care Center of St. Louis (collectively the Projects ). 16. In connection with and pursuant to the Rate Lock Agreement, each of the Borrowers and Yampol also executed and delivered to Greystone a separate Interest Rate Protection Confirmation (individually a Confirmation and collectively the Confirmations ) on behalf of each Borrower effective as of December 30, True copies of the Confirmations are attached as Exhibit B. 17. Each of the Confirmations fixed the mandatory closing dates (the Mandatory Closing Dates ), annual interest rate, proposed loan amount, and other terms for the Proposed Loans for each of the Projects. 18. Under Section 6 of the Rate Lock Agreement, the Proposed Loans relating to the Borrowers were required to close by the Mandatory Closing Dates as specified in each of the Confirmations. 19. Each of the Confirmations provided, in turn, that the Mandatory Closing Dates were subject to extension in the sole and absolute discretion of Greystone. 4 7 of 10

9 20. The Parties continued to work with each other in an effort to close the Proposed Loans given that the HUD Commitments were expiring in October On October 12, 2015, Greystone sent a reservation of rights and demand letter (the Initial Letter ) to the Defendants making demand for payment in the amount of $19,998, under the Rate Lock Agreement in connection with the Default/Termination Losses and reserving all of its rights and remedies. A true copy of the Initial Letter is attached as Exhibit C. 22. In response to the Letter, the Parties in their effort to proceed to close the Proposed Loans agreed to extend the Mandatory Closing Dates to June 30, The Borrowers and Yampol represented to Greystone that they were continuing their efforts to close the Proposed Loans, seeking until August 31, 2016 to effectuate the closing of the Proposed Loans. Greystone had no objection to the extension of the Mandatory Closing Dates to August 31, 2016, and continued its efforts to work with the Defendants to close the Proposed Loans. 23. The August 31, 2016 Mandatory Closing Dates have passed. 24. On September 2, 2016, Greystone sent another reservation of rights and demand letter (the Second Letter ) to the Defendants making demand for payment in the amount of $30,151, under the Rate Lock Agreement in connection with the Default/Termination Losses and reserving all of its rights and remedies. A true copy of the Second Letter is attached as Exhibit D. 24. Each of the Defendants is in default (the Defaults ) under the Rate Lock Agreement as a result of the Defendants failure to close their Proposed Loans on or before the Mandatory Closing Dates. 5 8 of 10

10 25. As a result of the Defendants failure to close their Proposed Loans on or before the Mandatory Closing Dates, Greystone was entitled to liquidate or settle any hedging arrangements and/or terminate any swap futures entered into by Greystone. 26. Pursuant to Section 6 of the Rate Lock Agreement, each of the Defendants is required to pay to Greystone any Default/Termination Losses Greystone sustained under the Rate Lock Agreement. 27. Greystone fully performed its duties under the Rate Lock Agreement. 28. Defendants have failed and refused to tender the Default/Termination Losses to Greystone. 29. The amount of damages Greystone has sustained under the Rate Lock Agreement continues to increase, and as of August 31, 2016 Greystone s damages are no less than $30,151, Greystone now seeks its contractually agreed upon remedies for the Defendants breach of the Rate Lock Agreement, including payment of all funds owed to Greystone under the Rate Lock Agreement. COUNT I BREACH OF CONTRACT 31. Greystone realleges and incorporates the foregoing paragraphs of its Complaint as if fully stated herein. 32. Pursuant to the terms of the Rate Lock Agreement, the Defendants agreed to pay Greystone for Greystone s Default/Termination Losses. 6 9 of 10

11 33. By accepting the terms of the Rate Lock Agreement and the Confirmations and by refusing to pay amounts due and owing under the Rate Lock Agreement, the Defendants have materially breached the terms of the Rate Lock Agreement. 34. As a direct and proximate result of Defendants aforementioned breach, Greystone has suffered damages in an amount no less than $30,151,000, plus interest, and attorneys fees and costs incurred in collecting on Defendants obligations past due. Dated: New York, New York September 6, 2016 FOLEY & LARDNER LLP Jill L. Nicholson 321 North Clark Street, Suite 2800 Chicago, Illinois (312) (312) (fax) jnicholson@foley.com By: s/barry G. Felder Barry G. Felder Rachel E. Kramer 90 Park Avenue New York, New York (212) (212) (fax) bgfelder@foley.com rkramer@foley.com Attorneys for Plaintiff 7 10 of 10

12 EXHIBIT A

13 FILED: NEW YORK COUNTY CLERK 09/06/ :59 AM INDEX NO /2016 NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 09/06/2016

14

15

16

17

18

19

20

21

22

23

24 EXHIBIT B

25 FILED: NEW YORK COUNTY CLERK 09/06/ :59 AM INDEX NO /2016 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 09/06/2016

26

27

28

29

30

31

32

33

34

35

36

37

38

39

40

41

42

43

44

45 EXHIBIT C

46 FILED: NEW YORK COUNTY CLERK 09/06/ :59 AM INDEX NO /2016 NYSCEF DOC. NO. 4 RECEIVED NYSCEF: 09/06/2016 By Certified Mail Return Receipt Requested and myprivate@cahillrosewood.com and zvi@feinerinvestments.com 419 BELLE AIR LANE WARRENTON, VA PHONE: FAX: October 12, 2015 East Peoria Real Estate Inc. Edwardsville Real Estate, LLC Inverness Real Estate, LLC Joliet Real Estate Holding Co. Moline Real Estate, Inc. Northbrook Real Estate, LLC Peoria Real Estate, Inc. Rockford Real Estate, LLC St. Charles Real Estate, LLC Schuetz Road Real Estate, Inc. c/o Mr. Mark Yampol Midwest Administrative Services, Inc Borman Drive, Suite 315 St. Louis, MO and c/o Mr. Zvi Feiner 2900 W. Farwell Ave Chicago, Illinois Re: Rosewood Portfolio Demand Letter Dear Messrs. Yampol and Feiner: As you are aware, each of the above listed entities (the Borrowers and individually a Borrower ) and Mr. Mark Yampol, individually ( Mr. Yampol ), executed and delivered to Greystone Funding Corporation ( Greystone ) that certain Forward Trade Interest Rate Protection Agreement dated December 27, 2013 (the Rate Lock Agreement ). In addition, each of the Borrowers, along with Mr. Yampol (as Sponsor ) in each instance, executed and delivered to Greystone a separate Interest Rate Protection Confirmation on behalf of the respective Borrower each effective as of December 30, 2013 (individually a Confirmation and collectively the Confirmations ) fixing the Annual Interest Rate, Proposed Loan Amount and other terms of the Proposed Loan for each of the Projects (as such terms are defined in the Rate Lock Agreement). Any capitalized term not defined in this letter shall have the meaning attributed to such term in the Rate Lock Agreement. Pursuant to the terms and conditions of the Rate Lock Agreement, each of the Borrowers and Mr. Yampol agreed to be responsible for, and to indemnify and hold harmless Greystone (jointly and severally) from and against, certain Default/Termination Losses. As you are aware, each Borrower has failed to close their respective Proposed Loan by the Mandatory Closing Date, and therefore each of the Borrowers and Mr. Yampol are in default of their respective obligations

47 Mr. Mark Yampol, Mr. Zvi Feiner Rosewood Portfolio October 12, 2015 Page 2 under the Rate Lock Agreement. To date the Default/Termination Losses total Nineteen Million Nine Hundred Ninety-eight Thousand Three Hundred Ninety-eight and 31/100 Dollars ($19,998,398.32) (the Demand Amount ), and demand is hereby made to each of the Borrowers and Mr. Yampol (jointly and severally) for immediate payment to Greystone of the Demand Amount. A breakdown of the Demand Amount is attached to this letter as Exhibit A as represents the Default/Termination Losses incurred by Greystone as of October 7, Until such time as this matter is resolved to the satisfaction of Greystone, Greystone reserves any and all rights and remedies it may have under the Engagement Letter dated December 23, 2013 (the Engagement Letter ) executed and delivered by the Borrowers to Greystone and/or under the Rate Lock Agreement, as well as any rights and/or remedies it may have at law and/or equity, with respect to any default or breach of the Engagement Letter and/or the Rate Lock Agreement. Greystone shall not be deemed to have waived any of its rights and remedies with respect to any default which now or hereafter exists under the Engagement Letter and/or the Rate Lock Agreement, whether or not such default is outlined herein or in any previous correspondence and/or communication with the Borrowers (and/or any of its principals, sponsors and/or any person or entity for which any of the foregoing is responsible, including, but not limited to Mr. Yampol and Mr. Zvi Feiner), nor shall Greystone be deemed to have waived any of its rights and remedies by any act or omission of Greystone under the Engagement Letter and/or the Rate Lock Agreement prior to the date of this letter. This letter is without prejudice to Greystone s right to (i) further demand any additional Default/Termination Losses it may incur hereafter, (ii) assert any additional defaults or events of default under the Engagement Letter and/or the Rate Lock Agreement, and/or (iii) exercise any of its rights and remedies with respect thereto. Very truly yours, GREYSTONE FUNDING CORPORATION By: Betsy Vartanian Executive President

48 Mr. Mark Yampol, Mr. Zvi Feiner Rosewood Portfolio October 12, 2015 Page 3 Project Name Est Mortgage Amount EXHIBIT A Summary of Default/Termination Losses Number of Contracts Open Hedge Gain (Loss) Closed Hedge Gain (Loss) Total Hedge Gain (Loss) East Peoria 10,665, (247,437.50) (1,411,527.86) (1,658,965.36) Edwardsville 13,043, (300,625.00) (1,714,616.61) (2,015,241.61) Inverness 14,387, (333,000.00) (1,899,431.08) (2,232,431.08) Joliet 14,717, (339,937.50) (1,938,927.04) (2,278,864.54) Moline 13,554, (312,187.50) (1,780,583.83) (2,092,771.33) Northbrook 14,274, (330,687.50) (1,886,109.51) (2,216,797.01) Peoria 12,422, (286,750.00) (1,635,562.18) (1,922,312.18) Rockford 11,414, (263,625.00) (1,503,627.74) (1,767,252.74) St. Charles 13,107, (302,937.50) (1,727,938.17) (2,030,875.67) Schuetz Road 11,463, (265,937.50) (1,516,949.30) (1,782,886.80) (St. Louis) Foxes Grove 9,324, ,374, (2,983,125.00) (17,015,273.32) (19,998,398.32)

49 EXHIBIT D

50 FILED: NEW YORK COUNTY CLERK 09/06/ :59 AM INDEX NO /2016 NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 09/06/2016 By Certified Mail O Return Receipt Requested and O myprivate@cahillrosewood.com and zvi@feinerinvestments.com September 2, 2016 East Peoria Real Estate Inc. Edwardsville Real Estate, LLC Inverness Real Estate, LLC Joliet Real Estate Holding Co. Moline Real Estate, Inc. Northbrook Real Estate, LLC Peoria Real Estate, Inc. Rockford Real Estate, LLC St. Charles Real Estate, LLC Schuetz Road Real Estate, Inc. c/o Mr. Mark Yampol Midwest Administrative Services, Inc Borman Drive, Suite 315 St. Louis, Missouri and c/o Mr. Zvi Feiner 2900 W. Farwell Ave Chicago, Illinois Re: Rosewood Portfolio Demand Letter Dear Messrs. Yampol and Feiner: 5c i_e QbU QgQbU' UQSX _V dxu QR_fU \YcdUT U^dYdYUc %dxu k6_bb_gubcl Q^T Y^TYfYTeQ\\i Q k6_bb_gubl& Q^T Bb) BQb[ NQ]`_\' Y^TYfYTeQ\\i %kbb) NQ]`_\l&' UhUSedUT Q^T TU\YfUbUT d_ <buicd_^u ;e^ty^w Corporation (k<buicd_^ul& dxqd SUbdQY^ ;_bgqbt IbQTU >^dubucd GQdU Eb_dUSdY_^ 5WbUU]U^d TQdUT 8USU]RUb -2' -+,. %dxu kgqdu A_S[ 5WbUU]U^dl&. In addition, each of the Borrowers, along wit h Bb) NQ]`_\ %Qc kh`_^c_bl& in each instance, executed and delivered to Greystone a separate Interest Rate Protection Confirmation on behalf of each of the respective Borrowers each UVVUSdYfU Qc _V 8USU]RUb.+' -+,. %Y^TYfYTeQ\\i Q k7_^vyb]qdy_^l Q^T S_\\USdYfU\i dxu k7_^vyb]qdy_^cl& VYhY^W dxu 5^^eQ\ >^dubucd GQdU' Eb_`_cUT A_Q^ 5]_e^d and other t erms of t he Proposed Loan for each of the Projects (as such terms are defined in the Rate Lock Agreement). Any capitalized term not defined in this letter shall have the meaning attributed to such term in the Rate Lock Agreement. Pursuant to the terms and conditions of the Rate Lock Agreement, each of the Borrowers and Mr. Yampol agreed to be responsible for, and to indemnify and hold harmless Greystone (jointly and severally) from and against, certain Default/Termination Losses. As you are aware, each Borrower has failed to close their respective Proposed Loan pursuant to the terms of the Rate

51 Mr. Mark Yampol, Mr. Zvi Feiner Rosewood Portfolio September 2, 2016 Page 2 Lock Agreement, and therefore each of the Borrowers and Mr. Yampol are in default of their respective obligations under the Rate Lock Agreement. To date the Default/Termination Losses total Thirty Million One Hundred Fifty-one Thousand Dollars ($30,151,000.00& %dxu k8u]q^t 5]_e^dl&' Q^T demand is hereby made to each of the Borrowers and Mr. Yampol (jointly and severally) for immediate payment to Greystone of the Demand Amount. Until such time as this matter is resolved to the satisfaction of Greystone, Greystone reserves any and all rights and remedies it may have under the Engagement Letter dated December 23, 2013 %dxu k9^wqwu]u^d AUddUbl& UhUSedUd and delivered by the Borrowers to Greystone and/or under the Rate Lock Agreement, as well as any rights and/or remedies it may have at law and/or equity, with respect to any default or breach of the Engagement Letter and/or the Rate Lock Agreement. Greystone shall not be deemed to have waived any of its rights and remedies with respect to any default which now or hereafter exists under the Engagement Letter and/or the Rate Lock Agreement, whether or not such default is outlined herein or in any previous correspondence and/or communication with the Borrowers (and/or any of its principals, sponsors and/or any person or entity for whichany of the foregoingis responsible, including, but not limitedto Mr. Yampol and Mr. Zvi Feiner, nor shall Greystone be deemed to have waived any of its rights and remedies by any act or omission of Greystone under the Engagement Letter and/or the Rate Lock Agreement prior to the date of this letter. This letter is without prejudice to <buicd_^umc right to (i) further demand any additional Default/termination Losses it may incur hereafter, (ii) assert any additional defaults or events of default under the Engagement Letter and/or the Rate Lock Agreement, and/or (iii) exercise any of its rights and remedies with respect thereto. Very truly yours, GREYSTONE FUNDING CORPORATION By: Betsy Vartanian Executive Vice President