FILED: NEW YORK COUNTY CLERK 09/29/ :13 PM INDEX NO /2016 NYSCEF DOC. NO. 6 RECEIVED NYSCEF: 09/29/2016

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1 FILED: NEW YORK COUNTY CLERK 09/29/ :13 PM INDEX NO /2016 NYSCEF DOC. NO. 6 RECEIVED NYSCEF: 09/29/2016 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK 136 FIELD POINT CIRCLE HOLDING Index No /2016 COMPANY, LLC and PUTNAM BRIDGE FUNDING III, LLC, Plaintiffs, ANSWER -against- ALEXANDER RAZINSKI, TANYA RAZINSKI, XENIA RAZINSKI, INVAR INTERNATIONAL HOLDING, INC., and INVAR INTERNATIONAL, INC., Defendants. Defendants Alexander Razinski, Tanya Razinski, Xenia Razinski, Invar International Holding, Inc. ( Invar Holding ) and Invar International, Inc. ( Invar International ) (collectively, Defendants ), by their attorneys, Levi Lubarsky Feigenbaum & Weiss LLP, for their answer to the complaint, allege as follows: 1. Deny the allegations in paragraph 1 of the complaint, except admit that plaintiff 136 Field Point Circle Holding Company, LLC ( FPC ) has brought this action to obtain the relief described in this paragraph, and deny that FPC is entitled to any such relief. 2. Deny the allegations in paragraph 2 of the complaint, except admit that FPC seeks the recovery describes in this paragraph, and deny that FPC is entitled to any such recovery. 3. Deny the allegations in paragraph 3 of the complaint, except admit that plaintiff Putnam Bridge Funding III, LLC ( Putnam ) has brought this action in an attempt to recover damages from Alexander Razinski, and deny that Putnam is entitled to any such relief. 1 of 16

2 4. Deny the allegations in paragraph 4 of the complaint, except admit that Invar Holding executed a written guaranty (the Guaranty ) of certain obligations of Alexander and Tanya Razinski (the Razinskis ) under a Master Agreement dated as of May 17, 2012 among FPC, the Razinskis and Invar Holding (the Master Agreement ), and that the Judgment was entered in an action based on the Guaranty, and refer to the Master Agreement and the Guaranty for a full and accurate statement of their terms. 5. Deny the allegations in paragraph 5 of the complaint, except admit that Alexander Razinski signed the Guaranty in his capacity as an officer of Invar Holding. 6. Deny knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 6 of the complaint. 7. Deny the allegations in paragraph 7 of the complaint, except admit that Alexander Razinski, individually and in his capacity as an officer of Invar International, and Putnam executed a letter agreement dated April 19, 2012 (the Direction Letter ) addressed to Dr. Boris Kasolowsky of Freshfields Bruckhaus Deringer LLP ( Freshfields ), counsel for Invar International in a multi-million-dollar arbitration (the Arbitration ), refer to the Direction Letter for a full and accurate statement of its terms, and deny knowledge or information sufficient to form a belief as to whether Putnam is an affiliate of FPC. 8. Deny the allegations in paragraph 8 of the complaint, except admit that when the Arbitration was settled, some of the proceeds of settlement were distributed to Invar International in accordance with the terms of the Direction Letter. 9. Deny knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 9 of the complaint. 2 2 of 16

3 10. Deny knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 10 of the complaint. 11. Admit the allegations in paragraph 11 of the complaint. 12. Deny the allegations in paragraph 12 of the complaint, except admit that Invar Holding once had its principal place of business in New York. 13. Deny the allegations in paragraph 13 of the complaint, except admit that Invar International, a subsidiary of Invar Holding, was involved in a project to develop and put into operation two power plants in Moscow, Russia. 14. Deny the allegations in paragraph 14 of the complaint, except admit that Invar International, a subsidiary of Invar Holding, was involved in a project to develop and put into operation two power plants in Moscow, Russia. 15. Admit the allegations in paragraph 15 of the complaint. 16. Admit the allegations in paragraph 16 of the complaint. 17. Admit the allegations in paragraph 17 of the complaint. 18. Admit the allegations in paragraph 18 of the complaint. 19. Admit the allegations in paragraph 19 of the complaint. 20. Admit the allegations in paragraph 20 of the complaint. 21. Deny the allegations in paragraph 21 of the complaint, except admit that the Razinskis and Xenia Razinski are the sole officers, directors and shareholders of Invar Holding and the sole officers and directors of Invar International. 22. Deny the allegations in paragraph 22 of the complaint. 23. Deny the allegations in paragraph 23 of the complaint. 3 3 of 16

4 24. Deny the allegations in paragraph 24 of the complaint, except admit that the Razinskis paid rent, as equitable mortgagors, on the premises 136 Field Point Circle, Greenwich, Connecticut (the Property ) as part of a broader transaction embodied in the Master Agreement. 25. Admit the allegations in paragraph 25 of the complaint. 26. Deny the allegations in paragraph 26 of the complaint, except admit that for several years before May 2012, Alexander Razinski held an option to purchase the Property, and refer to the option agreement, as amended from time to time, for a full and accurate statement of its terms. 27. Admit the allegations in paragraph 27 of the complaint. 28. Deny the allegations in paragraph 28 of the complaint, except admit that Alexander Razinski did not exercise the option to purchase the Property. 29. Deny the allegations in paragraph 29 of the complaint, except admit that in the first part of 2012, Nicholas Prouty, Alexander Razinski approached Nicholas Prouty, who is believed to have then been the chief executive of Putnam (but not of FPC, which did not yet exist at that time), approached Alexander Razinski about having Putnam provide financing to the Razinskis to enable them to exercise the option to purchase the Property and to help fund the Arbitration. 30. Admit the allegations in paragraph 30 of the complaint. 31. Admit the allegations in paragraph 31 of the complaint. 32. Deny knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 32 of the complaint. 33. Deny the allegations in paragraph 33 of the complaint, except admit that there were certain other legal documents, including a purported Residential Lease, that were 4 4 of 16

5 executed in connection with the Master Agreement, and refer to those documents for a full and accurate statement of their terms. 34. Deny the allegations in paragraph 34 of the complaint, except admit that the socalled Residential Lease purported to provide for a $1 million penalty payment under certain conditions, refer to the agreement in question for a full and correct statement of its terms, and note that the $1 million penalty provision has been adjudged to be an unenforceable penalty in a related action in this Court. 35. Admit the allegations in paragraph 35 of the complaint. 36. Deny the allegations in paragraph 36 of the complaint, except admit the existence of the Master Agreement and refer to it for a full and accurate statement of its terms. 37. Deny the allegations in paragraph 37 of the complaint, except admit the existence of the Direction Letter and refer to it for a full and accurate statement of its terms. 38. Deny the allegations in paragraph 38 of the complaint, except admit the existence of the Direction Letter and refer to it for a full and accurate statement of its terms. 39. Admit the allegations in paragraph 39 of the complaint. 40. Deny the allegations in paragraph 40 of the complaint, except admit the existence of a Stockholder Acknowledgment signed by Xenia Razinski and refer to that document for a full and accurate statement of its terms. 41. Deny the allegations in paragraph 41 of the complaint, except admit that Invar International is a subsidiary of Invar Holding, and that in 2012 Invar International was involved in the Arbitration against a respondent known as Zorlu Enerji Elektrik Uretem Anonim Sirketi. 42. Deny the allegations in paragraph 42 of the complaint. 5 5 of 16

6 43. Deny the allegations in paragraph 43 of the complaint, except admit that Invar International was the claimant in the Arbitration, and that Alexander Razinski disclosed that fact to Nicholas Prouty and others connected with Plaintiffs. 44. Deny the allegations in paragraph 44 of the complaint, except admit that the Arbitration was settled. 45. Admit the allegations of paragraph 45 of the complaint. 46. Admit the allegations of paragraph 46 of the complaint, but note that Invar Holding, referred to as Invar in paragraph 46, was not a party to the Arbitration, and that Plaintiffs were fully aware of that fact. 47. Deny the allegations of paragraph 47 of the complaint, except admit that some of the proceeds of settlement of the Arbitration were disbursed to Invar International. 48. Deny the allegations of paragraph 48 of the complaint. 49. Deny the allegations of paragraph 49 of the complaint. 50. Deny the allegations in paragraph 50 of the complaint, except admit that in 2013 FPC commenced an action against Invar Holding in the United States District Court for the Southern District of New York, Case No. 13 Civ (the 2013 Federal Action ), and refer to the pleadings in that action for a full and accurate statement of the claims and defenses asserted therein. 51. Deny the allegations in paragraph 51 of the complaint, except admit the existence of the Master Agreement and the Guaranty Agreement and refer to those agreements for a full and accurate statement of their respective terms. 52. Deny the allegations in paragraph 52 of the complaint, except admit the existence of the Guaranty Agreement and refer to it for a full and accurate statement of its terms. 6 6 of 16

7 53. Admit the allegations in paragraph 53 of the complaint. 54. Admit the allegations in paragraph 54 of the complaint. 55. Admit the allegations in paragraph 55 of the complaint. 56. Admit the allegations in paragraph 55 of the complaint. 57. Deny the allegations in paragraph 57 of the complaint, except admit that summary judgment was entered against Invar Holding in the 2013 Federal Action and refer to the Court s opinion granting summary judgment for a full and accurate statement of the Court s findings and conclusions. 58. Deny the allegations in paragraph 58 of the complaint, except admit that summary judgment was entered against Invar Holding in the 2013 Federal Action and refer to the Court s opinion granting summary judgment for a full and accurate statement of the Court s findings and conclusions. 59. Deny the allegations of paragraph 59 of the complaint, except admit that Invar Holding has not satisfied the judgment in the 2013 Federal Action. 60. Admit the allegations of paragraph 60 of the complaint. 61. Admit the allegations of paragraph 61 of the complaint. 62. Deny knowledge or information sufficient to form a belief as to the truth of the allegations of paragraph 62 of the complaint. 63. Deny knowledge or information sufficient to form a belief as to the truth of the allegations of paragraph 63 of the complaint, except admit that counsel for FPC conducted a post-judgment deposition of Invar Holding through Alexander Razinski in connection with the 2013 Federal Action. 7 7 of 16

8 64. Deny the allegations in paragraph 64 of the complaint, except admit that counsel connection with the 2013 Federal Action and refer to the transcript of that deposition for a full and accurate statement of its contents. 65. Deny the allegations in paragraph 65 of the complaint, except admit that counsel connection with the 2013 Federal Action and refer to the transcript of that deposition for a full and accurate statement of its contents. 66. Deny the allegations in paragraph 66 of the complaint, except admit that counsel connection with the 2013 Federal Action and refer to the transcript of that deposition for a full and accurate statement of its contents. 67. Deny knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 67 of the complaint. 68. Deny the allegations in paragraph 68 of the complaint, except admit that counsel connection with the 2013 Federal Action and refer to the transcript of that deposition for a full and accurate statement of its contents. 69. Deny the allegations in paragraph 69 of the complaint except admit that counsel connection with the 2013 Federal Action and refer to the transcript of that deposition for a full and accurate statement of its contents. 8 8 of 16

9 70. Deny the allegations in paragraph 70 of the complaint, except admit that counsel connection with the 2013 Federal Action and refer to the transcript of that deposition for a full and accurate statement of its contents. 71. Deny the allegations in paragraph 71 of the complaint, except admit that counsel connection with the 2013 Federal Action and refer to the transcript of that deposition for a full and accurate statement of its contents. 72. Deny the allegations in paragraph 72 of the complaint, except admit that counsel connection with the 2013 Federal Action and refer to the transcript of that deposition for a full and accurate statement of its contents 73. Deny the allegations in paragraph 73 of the complaint. 74. Deny the allegations in paragraph 74 of the complaint. 75. Deny the allegations in paragraph 75 of the complaint. 76. Deny the allegations in paragraph 76 of the complaint. 77. Deny the allegations in paragraph 77 of the complaint. 78. Deny the allegations in paragraph 78 of the complaint. 79. Deny the allegations in paragraph 79 of the complaint, except admit that the Razinskis and Xenia Razinski are the sole officers, directors and shareholders of Invar Holding and the sole officers and directors of Invar International. 80. Deny the allegations in paragraph 80 of the complaint. 81. Deny the allegations in paragraph 81 of the complaint. 9 9 of 16

10 82. Deny the allegations in paragraph 82 of the complaint. 83. Deny the allegations in paragraph 83 of the complaint. 84. In response to paragraph 84 of the complaint, repeat and reallege the allegations of paragraphs 1 through 83 of this answer as if set forth here in full. 85. Deny the allegations in paragraph 85 of the complaint. 86. Deny the allegations in paragraph 86 of the complaint. 87. In response to paragraph 87 of the complaint, repeat and reallege the allegations of paragraphs 1 through 83, 85 and 86 of this answer as if set forth here in full. 88. Deny the allegations in paragraph 88 of the complaint. 89. Deny the allegations in paragraph 89 of the complaint. 90. Deny the allegations in paragraph 90 of the complaint. 91. In response to paragraph 91 of the complaint, repeat and reallege the allegations of paragraphs 1 through 83, 85, 86 and 88 through 90 of this answer as if set forth here in full. 92. Deny the allegations in paragraph 92 of the complaint. 93. Deny the allegations in paragraph 93 of the complaint. 94. In response to paragraph 94 of the complaint, repeat and reallege the allegations of paragraphs 1 through 83, 85, 86, 88 through 90, 92 and 93 of this answer as if set forth here in full. 95. Deny the allegations in paragraph 95 of the complaint, except admit the existence of the Master Agreement and refer to it for a full and accurate statement of its terms. 96. Deny the allegations in paragraph 96 of the complaint, except admit that counsel of 16

11 connection with the 2013 Federal Action and refer to the transcript of that deposition for a full and accurate statement of its contents. 97. Deny the allegations in paragraph 97 of the complaint. 98. Deny the allegations in paragraph 98 of the complaint. 99. Deny the allegations in paragraph 99 of the complaint Deny the allegations in paragraph 100 of the complaint In response to paragraph 101 of the complaint, repeat and reallege the allegations of paragraphs 1 through 83, 85, 86, 88 through 90, 92, 93 and 95 through 100 of this answer as if set forth here in full Deny the allegations in paragraph 102 of the complaint, except admit the existence of the Direction Letter and refer to it for a full and accurate statement of its terms Deny the allegations in paragraph 103 of the complaint Deny the allegations in paragraph 104 of the complaint Deny the allegations in paragraph 105 of the complaint In response to paragraph 106 of the complaint, repeat and reallege the allegations of paragraphs 1 through 83, 85, 86, 88 through 90, 92, 93, 95 through 100 and 102 through 105 of this answer as if set forth here in full Deny the allegations in paragraph 107 of the complaint, except admit the existence of the Direction Letter and refer to it for a full and accurate statement of its terms Deny the allegations in paragraph 108 of the complaint, except admit the existence of the Master Agreement and refer to it for a full and accurate statement of its terms Deny the allegations in paragraph 109 of the complaint, except admit the existence of the Master Agreement and refer to it for a full and accurate statement of its terms of 16

12 110. Deny the allegations in paragraph 110 of the complaint Deny the allegations in paragraph 111 of the complaint Deny the allegations in paragraph 112 of the complaint In response to paragraph 113 of the complaint, repeat and reallege the allegations of paragraphs 1 through 83, 85, 86, 88 through 90, 92, 93, 95 through 100, 102 through 105 and 107 through 112 of this answer as if set forth here in full Deny the allegations in paragraph 114 of the complaint In response to paragraph 115 of the complaint, repeat and reallege the allegations of paragraphs 1 through 83, 85, 86, 88 through 90, 92, 93, 95 through 100, 102 through 105, 107 through 112 and 114 of this answer as if set forth here in full Deny the allegations in paragraph 116 of the complaint, except admit that certain of the causes of action in the complaint are based on or relate directly or indirectly to the terms of the Master Agreement Deny the allegations in paragraph 117 of the complaint, except admit the existence of the Master Agreement and refer to it for a full and accurate statement of its terms Deny the allegations in paragraph 118 of the complaint. FIRST AFFIRMATIVE DEFENSE 119. The complaint fails to state a claim for which relief may be granted. SECOND AFFIRMATIVE DEFENSE 120. The causes of action alleged in the complaint represent plaintiffs attempt to hold Defendants, other than Invar Holding, indirectly liable for a penalty embodied in clauses in the Master Agreement and the so-called Lease Agreement that are void and unenforceable as a of 16

13 matter of public policy. Plaintiffs causes of action are accordingly precluded by the public policy that bars the enforcement of penalty clauses. THIRD AFFIRMATIVE DEFENSE 121. The causes of action alleged in the complaint represent plaintiffs attempt to hold Defendants, other than Invar Holding, indirectly liable for a penalty embodied in clauses in the Master Agreement and the so-called Lease Agreement that have been adjudged to be unenforceable, as a matter of public policy, as efforts to impose a penalty on those Defendants. This Court s judgment dated July 9, 2015, entered in a still-pending related action, Razinski v. 136 Field Point Circle Holding Company, LLC, Index No /2013 (the 2013 State Court Action ), made that adjudication, which bars plaintiffs causes of action as a matter of public policy prohibiting the enforcement of penalty clauses, and by the doctrine of res judicata. FOURTH AFFIRMATIVE DEFENSE 122. FPC s material breaches of the Master Agreement, including its refusal to advance an additional $1 million to the Razinskis to fund the completion of the Arbitration, violated the terms of Section 1.1 of the Master Agreement, excused Defendants from any duty to perform their obligations under the Master Agreement or the Direction Letter, and constitute a complete defense to all of the causes of action alleged in the complaint. FIFTH AFFIRMATIVE DEFENSE 123. FPC s material breach of its duties of good faith and fair dealing under the Master Agreement, including without limitation its unjustified bad faith refusal to advance an additional $1 million to the Razinskis to fund the completion of the Arbitration, violated the terms of Section 1.1 of the Master Agreement and its implied obligations inherent therein, excused Defendants from any duty to perform their obligations under the Master Agreement or the of 16

14 Direction Letter, and constitute a complete defense to all of the causes of action alleged in the complaint. SIXTH AFFIRMATIVE DEFENSE 124. Putnam was entitled to no payment under the Direction Letter because the Arbitration Expenses, as defined in the Direction Letter, were too high to have left a balance of Arbitration Proceeds, as defined in the Direction Letter, for payment to Putnam. SEVENTH AFFIRMATIVE DEFENSE 125. FPC s fraudulent conveyance claims are all barred by the legal principle that it is not a fraudulent conveyance to pay a pre-existing debt, regardless of to whom, even if the debtor chooses to prefer certain creditors over others. EIGHTH AFFIRMATIVE DEFENSE 126. FPC s fraudulent conveyance claims fail as a matter of law because a fraudulent conveyance cannot be based solely on an alleged breach of contract, for which the only proper remedy is a claim for breach of contract. NINTH AFFIRMATIVE DEFENSE 127. The proper remedy for a fraudulent conveyance is to undo the transaction and return the assets or funds in question to the transferor. Here, however, even if FPC could prove a fraudulent conveyance and it cannot that would simply result in the return to Freshfields of the settlement proceeds in the Arbitration that Freshfields transferred to Invar International. TENTH AFFIRMATIVE DEFENSE 128. A fraudulent conveyance action under Debtor and Creditor Law 273 or 274 can be maintained only by a present creditor against a debtor, so Plaintiffs claims against of 16

15 Defendants under those statutes must be dismissed to the extent Plaintiffs were not creditors of Defendants at the times of the alleged fraudulent transfers. ELEVENTH AFFIRMATIVE DEFENSE 129. Plaintiffs fraudulent conveyance claims against Xenia Razinski fail as a matter of law because any such claims may be brought only by a present or future creditor, and Xenia Razinski has never been indebted to Plaintiffs. TWELFTH AFFIRMATIVE DEFENSE 130. Putnam s claims against Defendants fail as a matter of law because Defendants are not indebted to Putnam, and Putnam therefore cannot meet its burden of showing that it suffered injury or damages as a result of the conduct alleged in the complaint. THIRTEENTH AFFIRMATIVE DEFENSE 131. FPC is not a party to the Direction Letter and may not even have existed when the Direction Letter was executed, so it cannot assert any claim, for breach of the Direction Letter, either as a party to the contract or as a third-party beneficiary. FOURTEENTH AFFIRMATIVE DEFENSE 132. The provision for a $1 million cash payment in Section 7.2(b)(iii) of the Master Agreement, and the provision for a $1 million cash payment in Section 8(c) of the so-called Residential Lease, referred to in paragraphs 50 and 109, respectively, of the complaint, are null and void as penalty clauses that are unenforceable as a matter of public policy. FIFTEENTH AFFIRMATIVE DEFENSE 133. Plaintiffs causes of action are barred by their unclean hands, including but not limited to their breaches set forth in the complaint in the pending action in New York Supreme of 16

16 Court entitled Razinski v. 136 Field Point Circle Holding Company, LLC, Index No /2014 (the 2014 State Court Action ). SIXTEENTH AFFIRMATIVE DEFENSE 134. Plaintiffs causes of action are barred by their own misconduct including but not limited to the breaches set forth in the complaint in the 2014 State Court Action which estops them from recovering in this action. SEVENTEENTH AFFIRMATIVE DEFENSE 135. Plaintiffs causes of action are barred by the doctrine of unjust enrichment, since any recovery in plaintiffs favor would be unjust under all the circumstances, particularly those set forth in the complaint in the 2014 State Court Action. EIGHTEENTH AFFIRMATIVE DEFENSE 136. Plaintiffs causes of action are barred by the applicable statutes of limitation. WHEREFORE Defendants request the entry of judgment: a. Dismissing the complaint in its entirety with prejudice; b. Awarding Defendants their costs and expenses, including reasonable attorneys' fees, in connection with this action; and c. Awarding such other and further relief to Defendants as may be just and proper. Dated: New York, New York September 29, 2016 LEVI LUBARSKY FEIGENBAUM & WEISS LLP By: /s/ Steven B. Feigenbaum Steven B. Feigenbaum J. Kelley Nevling, Jr. 655 Third Avenue, 27th Floor New York, New York (212) Attorneys for Defendants of 16