FILED: QUEENS COUNTY CLERK 09/04/ :47 AM INDEX NO /2018 NYSCEF DOC. NO. 60 RECEIVED NYSCEF: 09/04/2018

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1 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF QUEENS ASTORIA ATLAS HOLDINGS, LLC, CALIX REALTY HOLDINGS, LLC, OLYMPIA HAVEN REALTY LLC, ACROPOLIS ASSOCIATES LLC, -against- Plaintiffs, METROPOLITAN PACIFIC PROPERTIES, INC., STEVE H. OSMAN, DEBBIE VAZQUEZ, UMAIR SHEIKH, ANTOINE (TONY) MARZOUKA, ELIZABETH ZIANGUS, C. ANTHONY SHIPPAM, ROBERT BASS, MICHAEL BASS, HARRY BAKALIS, ANDREW BADER, BRIAN McNAMARA, BRANDON OSMAN, CLAIRE OSMAN, THE BACK OFFICE, INC., DEJESU MAIO & ASSOCIATES PC, MEYER LIEBER, TONY CHENG, SEAFAX CONSULTING, INC. MONARCH HOLDINGS, LLC, AEON CAPITAL LLC, ZPN CAPITAL LLC, 1010 DEVELOPMENT LLC, BRE MANAGEMENT, INC., LITHOS LLC, THOMAS ANAGNOSTOPOULOS, FUTURA BUILDERS, INC., BABA HOLDINGS LLC, SAGA HOLDINGS, LLC, and VOYAGER ENTERPRISES CORP., Hon. Leonard Livote Index No /2018 Mot. Seq. No. 001 COMMERCIAL DIVISION Oral Argument Requested Defendants, -and- ACROPOLIS GARDENS REALTY CORP., Nominal Defendant. AFFIRMATION OF STEPHEN B. MEISTER STEPHEN B. MEISTER, an attorney duly admitted to practice law in the courts of the State of New York, affirms the following under penalty of perjury: [7937-1/ /1] 1 1 of 8

2 1. I am a partner of the law firm of Meister Seelig & Fein LLP, attorneys for Plaintiffs Astoria Atlas Holdings, LLC, Calix Realty Holdings, LLC, Olympia Haven Realty LLC, and Acropolis Associates LLC, derivatively on behalf of Nominal Defendant Acropolis Gardens Realty Corporation ( AGRC ). As such, I am fully familiar with the facts set forth herein. 2. I submit this affirmation in support of Plaintiffs motion, brought by Order to Show Cause, seeking an order for a temporary receiver, and preliminary injunction with temporary restraints pursuant to CPLR 6401, 6301 and 6311 against Defendants Metropolitan Pacific Properties, Inc. ( MetPac ) and Steve H. Osman ( Osman and together with MetPac, the Osman Defendants ), AGRC, and the AGRC Board of Directors comprised of defendants Debbie Vasquez, Umair Sheikh, Elizabeth Ziangus, Antonie Marzouka, and Anthony Shippam (collectively, the Board ) Attached hereto as Exhibit 1 is a true and correct copy of the Verified Complaint, together with its accompanying exhibits, filed in the above-captioned action on June 8, As set forth in the Verified Complaint and accompanying memorandum of law, Plaintiffs will face imminent irreparable harm unless the Court issues a preliminary injunction order to maintain the status quo. 5. As shareholders of AGRC, Plaintiffs instituted this legal action to protect the rights of AGRC s shareholders and to remedy the Osman Defendants excessive looting of AGRC assets. Plaintiffs seek to hold the Osman Defendants responsible for the Cooperative Maintenance payments they have diverted from AGRC to their personal accounts. The misappropriation of AGRC funds benefitted Osman, MetPac, Osman s mother, Claire Osman, and Osman s other companies and cooperatives managed by Osman. Accordingly, Plaintiffs seek a temporary 1 Unless otherwise indicated, defined terms contained herein shall have the same meanings ascribed to them in the Verified Complaint. [7937-1/ /1] 2 2 of 8

3 receiver to hold AGRC s Property, sue for and collect all monthly Cooperative Maintenance, employ counsel and/or an accountant in connection with the collections of maintenance and discharge of its obligations, and retain a managing agent to manage the operations of the Property. 6. Pursuant to a special proceeding (Astoria Atlas et al. v. AGRC et al., Index No /2017 (N.Y. Sup., Queens County) (Livote, J.). (the Books and Records Proceeding ) to inspect AGRC s books and records, which AGRC s Board of Directors (the Board ) and MetPac vigorously opposed, Plaintiffs received documents from AGRC s mortgage refinancing from Natixis, Titan Capital ID, LLC ( Titan ), Sterling National Bank ( Sterling ), and Signature Bank. Through those documents, Plaintiffs were able to confirm some of the outrageous looting and misappropriation of Cooperative Maintenance funds and refinancing payments. 7. Plaintiffs received Signature Bank statements from June 2011 to February 2018 as part of the Books and Records Proceeding. The Signature Bank statements include deposits and withdrawals from AGRC s bank account ending in The Signature Bank statements include multiple transfers from AGRC s bank account to MetPac s bank account ending in Attached hereto as Exhibit 2 is a true and correct copy of AGRC s Signature Bank Statement for December 1 through December 31, The Signature Bank Statements produced in the Books and Records Proceeding also include transfers from AGRC s account to other cooperatives Osman manages, including Bowne House Owners Corporation (account ending in 7594) and 2 Dag Hammarskjold (account ending in 8329) and transfers from the other cooperatives into AGRC s Signature Bank account (ending in 7497). Attached hereto as Exhibit 3 is a true and correct copy of AGRC s Signature Bank Statements for February 1 through February 28, 2018 and October 1 through October 31, [7937-1/ /1] 3 3 of 8

4 9. In connection with the Books and Records Proceeding, Osman submitted an affidavit dated July 31, In his affidavit, Osman states that AGRC s audited financial statements for 2017 have not been completed. Attached hereto as Exhibit 4 is a true and correct copy of defendant Steve H. Osman s July 31, 2018 affidavit in the Books and Records Proceeding. 10. On August 21, 2018, MetPac s counsel provided Plaintiffs counsel with a copy of AGRC s purported 2017 audited financials. Attached hereto as Exhibit 5 is a true and correct copy of AGRC s purported 2017 audited financials. 11. Osman also made transfers and wrote checks to his mother, Claire Osman, from AGRC s Signature Bank account. Attached hereto as Exhibit 6 is a true and correct copy of a March 27, 2012 check for $120,000 from AGRC s Signature Bank account, which was signed by Osman, and payable to and endorsed by Claire Osman. 12. AGRC defaulted on its $45 million loan from Natixis, of which Wells Fargo is currently the trustee. On July 13, 2018 and August 8, 2018, Wells Fargo s counsel notified AGRC that certain Events of Default occurred under the Loan Agreement as a result of AGRC s failure to pay monthly amounts due and owing in connection with the loan and made further demand on AGRC to cure certain other breaches. Attached hereto as Exhibit 7 is a true and correct copy of the July 13, 2018 letter from Wells Fargo to AGRC providing default notice. 13. On August 8, 2018, Wells Fargo again informed AGRC that it was in default on the $45 million loan. Attached hereto as Exhibit 8 is a true and correct copy of the August 8, 2018 letter from Wells Fargo to AGRC providing a second default notice. 14. On July 5, 2018, Plaintiffs counsel informed AGRC s counsel that Plaintiffs July Cooperative Maintenance payment would be deposited into an attorney escrow account as a [7937-1/ /1] 4 4 of 8

5 precautionary measure. Attached hereto as Exhibit 9 is a true and correct copy of the July 5, 2018 letter from Plaintiffs counsel to AGRC s counsel. 15. On August 3, 2018, I informed Wells Fargo s counsel that Plaintiffs would not make any further payments of Cooperative Maintenance, other than into escrow, absent a change in management or other appropriate protective measures being taken to assure the funds were not misappropriated. Wells Fargo, as the trustee of the current noteholder (which purchased the note from Natixis) has the right under the loan documents to replace the Osman Defendants, but failed to do so. Attached hereto as Exhibit 10 is a true and correct copy of my August 3, 2018 letter to Wells Fargo s counsel. 16. On August 17, 2018, Wells Fargo provided AGRC with a Notice of Acceleration to AGRC, because AGRC failed to cure the payment defaults under the loan documents. I was also notified of the Notice of Acceleration, by letter which enclosed a copy of the notice to AGRC. Attached hereto as Exhibit 11 is a true and correct copy of the August 17, 2018 Notice of Acceleration letters from Wells Fargo s counsel. 17. On August 20, 2018, Wells Fargo s counsel informed my co-counsel that a subsequent refinancing of AGRC s mortgage is pending. 18. On August 29, 2018, I sent a proposed stipulation to AGRC s counsel, Steven Schlesinger, Esq., in an attempt to, inter alia, obtain confirmation that Defendants would not refinance AGRC s current $45 million mortgage, to take steps to protect AGRC s cash assets and to arrange for the payment of Plaintiffs maintenance once those protective steps were taken. Unfortunately, Mr. Schlesinger and I were unable to reach an agreement on the proposed stipulation. Accordingly, that same day, I sent Mr. Schlesinger a letter advising him that a wire had been initiated to my firm s escrow account to cover Plaintiffs maintenance arrears and that [7937-1/ /1] 5 5 of 8

6 I would immediately remit those funds to Rialto Capital Management LLC, the special servicer for AGRC s first mortgage if Mr. Schlesinger confirmed in writing that Plaintiffs would receive credit for such payment by AGRC. Attached hereto as Exhibit 12 is a true and correct copy of my August 29, 2018 letter to Mr. Schlesinger. To date, Mr. Schlesinger has not responded to my letter. I am presently holding in my firm s escrow account $199, of Plaintiffs funds. 19. In order to preserve Plaintiffs and AGRC s assets during the pendency of this action, Plaintiffs seek a temporary receiver to (i) take and hold the real property owned by nominal defendant AGRC, to wit, the Residential Unit (the Property ) at the Acropolis Gardens Condominium, which includes 618 cooperative apartments (the Cooperative Apartments ) located at rd Street, Astoria, New York; (ii) sue for and collect all maintenance ( Cooperative Maintenance ) and arrears owed to AGRC by the owners of the Cooperative Apartments; (iii) employ counsel and/or an accountant, subject to Court approval, in connection with the collection of maintenance and discharge of its obligations; and (iv) retain a managing agent, subject to Court approval, to manage the operations of the Property and make all necessary repairs and clear existing and future violations noted against the Property by the New York City Department of Buildings, New York City Environmental Control Board and The New York City Fire Department and other governmental agencies. 20. If the Court declines to appoint a temporary receiver, and in order to maintain the status quo, Plaintiffs seek an order restraining the Osman Defendants from paying any funds belonging to AGRC to any person except for amounts due and payable: (i) to Rialto Capital Management LLC as special servicer under the first mortgage against the Property held by Wells Fargo Bank, National Association ( Wells Fargo ) in the approximate amount of $45 million (the First Mortgage ), and (ii) to the New York City Department of Finance in respect of real estate [7937-1/ /1] 6 6 of 8

7 taxes, water and other charges with respect to the Property, (iii) to third-party vendors in respect of electricity charges for the Property, exclusive of charges due in respect of any Cooperative Apartments other than the superintendent s apartment, (iv) to third-party vendors in respect of fuel oil deliveries to the Property, and (v) to such other persons, in such sums, as may be directed by further order of the Court, and (vi) authorizing Plaintiffs to pay the Cooperative Maintenance due in respect of their Cooperative Apartments directly to Rialto Capital Management LLC. 21. Furthermore, if AGRC refinances the First Mortgage, in order to prevent further misappropriation by the Osman Defendants while this action is pending, Plaintiffs seek a preliminary injunction that directs the Osman Defendants and AGRC to cause the refinancing lender to directly deposit with Chicago Title Insurance Company or another escrow agent appointed by the Court (the Escrow Agent ), any and all excess refinancing proceeds above the sums necessary to repay the First Mortgage including bona fide transactional costs due third parties not affiliated with the Osman Defendants (the Excess Refinancing Proceeds ), which Excess Refinancing Proceeds shall not be released by Escrow Agent except upon and pursuant to further order of the Court, and granting Plaintiffs other and further relief as this Court deems just and proper. 22. Unless this Court grants the narrow injunctive relief sought by Plaintiffs to maintain the status quo, the Osman Defendants and the Board will continue to abuse their current control over AGRC to make irreversible business decisions that will irreparably injure AGRC, Plaintiffs, and the other shareholders of AGRC, rendering this Court s ultimate judgment ineffectual. 23. This relief is imperative now because the Osman Defendants continue to unlawfully divert AGRC funds to their own personal accounts and the accounts of their cronies. Furthermore, [7937-1/ /1] 7 7 of 8

8 I have been informed that a refinance of AGRC s $45 million mortgage is imminent, and Mr. Schlesinger has confirmed to me that he understands such a refinancing is presently in the works. 24. In light of the immediate irreparable injury that will result should the Defendants be allowed to proceed with their misappropriation of AGRC funds, interim injunctive relief is warranted. 25. On August 31, 2018, in compliance with rules 19, 20 and 24 of Section of the Uniform Civil Rules of the Supreme and County Courts, Commercial Division of the Supreme Court, my office provided written notice of the instant application by to counsel for MetPac, Osman, AGRC, and the Board. A true and correct copy of said is attached hereto as Exhibit No request for the relief sought herein has previously been made to this or any other Court. Dated: New York, New York September 4, 2018 /s/ Stephen B. Meister STEPHEN B. MEISTER [7937-1/ /1] 8 8 of 8