FILED: NEW YORK COUNTY CLERK 08/26/2015 07:22 PM INDEX NO. 651695/2015 NYSCEF DOC. NO. 4 RECEIVED NYSCEF: 08/26/2015 Supreme Court of the State of New York County of New York Norddeutsche Landesbank Giro~entrale and Hannover Funding Company LLC, -against- Lynn Tilton; Patriarch Partners, LLC; Patriarch Partners XIV, LLC; and Patriarch Partners XV, LLC, Defendants. AFFIDAVIT OF SERVICE Index No. 651695/2015 Date Filed 5/15/2015. State of New York) County of Albany ) ss: Mary M. Bonville, being duly sworn, deposes and says: Deponent is over the age of eighteen and is a resident of New York State and is not a party to this action. That on August 26, 2015 at approximately 11 :35 AM deponent served the following specific papers pursuant to Section 304 of the LimHed Liability Company Law: Summons with Notice (endorsed with the index number and date of purchase) and Notice of Commencement of Action Subject to Mandatory Electronic Filing, that the party served was Patriarch Partners XIV, LLC, one of the defendants in this action, by personally'serving one copy of the aforesaid papers at the office of the New York State Secretary of State located at 99 Washington Avenue, 6th Floor, in the City of Albany, New York by delivering to and leaving the papers with Sue Zouky, a white female with light brown hair, being approximately 60 years of age; height of 5'0", weight of 125 lbs., being an authorized person in the Corporation Division of the Department of State and empowered to receive such service. That at the time of making such service, deponent paid the fee prescribed by Law in the amount of $40.00. sze~ois RuthA.Dennehey ~ Notary Public - State of New York Qualified in Albany County Registration No. OIDE4729775 Commission Expires: 11-30-2018
SUPREME COURT OF THE STATE OF NEW YORK NORDDEUTSCHE LANDESBANK GIROZENTRALE, et al., INDEX NUMBER: 651695/2015 LYNN TILTON, et al., v. Plaintiff Defendant AFFIDAVIT OF SERVICE State of Delaware } County of New Castle} ss.: The undersigned, being duly sworn. deposes and says; Deponent is not a party herein, is over 18 years of age and resides in the state of Delaware. That on 8/26/2015 at 3:05 PM at 2711 Centerville Road, Suite 400, Wilmington, DE 19808 deponent served a(n) Notice of Commencement of Action Subject to Mandatory Electronic Filing, Summons with Notice, Notice of Service on Patriarch Partners XIV, LLC c/o Corporation Service Company, a domestic corporation, by delivering thereat a true copy of each to Lynanne Gares personally, deponent knew said corporation so served to be the corporation described in said documents as said defendant and knew said individual to be Authorized Agent thereof. Description of Person Served: Gender : Female Skin: White Hair: Brown Age : 36-50 Yrs. Height : 5' 4" - 5' 8" Weight :161-200 Lbs. Other: Swo before me this 26th' y of Aug st, 2015,.--- lv' DENORRIS BRITI KEVIN DUNN NOTARY PUBLIC SeNing By INing, Inc 1233 Broadway, Suite 2201 I New York. NY 10279 STATE OF DELAWARE My Commission Expires April 4, 2016
SUPREME COURT OF THE STATE OF NEW YORK ------------------------------------------------------------------x NORDDEUTSCHE LANDESBANK GIROZENTRALE and HANNOVER FUNDING COMP ANY LLC, - against - Index No. 651695/2015 LYNN TILTON; PATRIARCH PARTNERS, LLC; PATRIARCH PARTNERS XIV, LLC; AND PATRIARCH PARTNERS XV, LLC, Defendants. ------------------------------------------------------------------x NOTICE OF COMMENCEMENT OF ACTION SUBJECT TO MANDATORY ELECTRONIC FILING PLEASE TAKE NOTICE that the matter captioned above, which has been commenced by the filing of the accompanying documents with the County Clerk via the New York State Courts Electronic Filing System ("NYSCEF"), is subject to mandatory electronic filing pursuant to Section 202.5-bb of the Uniform Rules for the Trial Courts. This notice is being served as required by Subdivision (b) (3) of that Section. Counsel and/or parties must either: 1) immediately record their representation within thee-filed matter on the Consent/Represent page in NYSCEF; or 2) file the Notice of Opt-Out form to claim one of the limited exemptions from mandatory e-filing (see below). Failure to record representation may result in an inability to receive electronic notice of any document filings. Claiming an exemption will require the exempt party to serve and be served with hard copy documents. Counsel and unrepresented parties who intend to participate in e-filing must first create a NYSCEF account and obtain a user ID and password.for additional information about electronic filing, and to create a NYSCEF account, visit the NYSCEF website at www.nycourts.gov/efile or contact the NYSCEF Resource Center(phone: 646-386-3033; e-mail: efile@nycourts.gov; mailing address: 60 Centre Street, New York, New York 10007). Exemptions from mandatory e-filing (Section 202.5-bb(e)) are limited to: 1) attorneys who certify in good faith that they lack the computer hardware and/or scanner and/or internet connection or that they lack (along with all employees subject to their direction) the operational knowledge to comply with e-filing requirements; and 2) parties who expect to represent themselves and who choose not to participate in e-filing. (Such parties are encouraged to visit www.nycourthelp.gov or contact the Help Center in the court where the action is pending.) _1_2_0_W_es_t_4_5t_h_S_tr_ee_t_, 3_8_t_h _F_Io_o_r (Address) New York, NY I 0036 _B_E_R_G_&_A_ND R_O_P_HY (Firn1 Name) -<_64_6~)_76_6_-0_0_7_3 (Phone) To: Patriarch Partners XIV, LLC c/o New York Secretary of State One Commerce Plaza _m_f:_a~y ~b_afi_ir_n_1.c_o_n_1 (E-Mail) 99 Washington Avenue Albany, NY 1223 1 3/30/ 15
SUPREME COURT OF THE STATE OF NEW YORK -------------------------------~---------------------------------x NORD DEUTSCHE LANDESBANK GIROZENTRALE and HANNOVER FUNDING COMP ANY LLC, - against - Index No. 651695/2015 LYNN TTL TON; PATRIARCH PARTNERS, LLC; PATRJARCH PARTNERS XIV, LLC; AND PATRIARCH PARTNERS XV, LLC, Defendants. ------------------------------------------------------------------x NOTICEOFCOMMENCEMENTOFACTION SUBJECT TO MANDATORY ELECTRONIC FILING PLEASE TAKE NOTICE that the matter captioned above, which has been commenced by the filing of the accompanying documents with the County Clerk via the New York State Courts Electronic Filing System ("NYSCEF"), is subject to mandatory electronic filing pursuant to Section 202.5-bb of the Uniform Rules for the Trial Courts. This notice is being served as required by Subdivision (b) (3) of that Section. Counsel and/or parties must either: I) immediately record their representation within the e-filed matter on the Consent/Represent page in NYSCEF; or 2) file the Notice of Opt-Out form to claim one of the limited exemptions from mandatory e-filing (see below). Failure to record representation may result in an inability to receive electronic notice of any document filings. Claiming an exemption will require the exempt party to serve and be served with hard copy documents. Counsel and unrepresented parties who intend to participate in e-filing must first create a NYSCEF account and obtain a user ID and password. For additional information about electronic filing, and to create a NYSCEF account, visit the NYSCEF website at www.nycourts.gov/efile or contact the NYSCEF Resource Center (phone: 646-386-3033; e-mail: efile@nycourts.gov; mailing address: 60 Centre Street, New York, New York 10007). Exemptions from mandatory e-filing (Section 202.5-bb(e)) are limited to: I) attorneys who certify in good faith that they lack the computer hardware and/or scanner and/or internet connection or that they lack (along with all employees subject to their direction) the operational knowledge to comply withe-filing requirements; and 2) parties who expect to represent themselves and who choose not to participate in e-filing. (Such parties are encouraged to visit www.nycourthelp.gov or contact the Help Center in the court where t ction is pending.) _1_2_0_W_es_t_4_5t_h_S_tr_ee_t'""", 3_8_th_F_lo_o_r (Address) Michael M. Fay New York, NY 10036 _B_E_R_G_&_A_ND R_O_P_H_Y (Fim1 Name) To: Patriarch Partners XIV, LLC -'(_64_6...,_)_7_66_-_00_7_3 (Phone) _m_f:_ay~@~b_afi_1r_n_1.c_o_n_1 (E-Mail) c/o Corporation Service Company 2711 Centerville Rd, Suite 400 Wilmington, DE 19808 3/30/ 15
FILED: NEW YORK COUNTY CLERK 05/15/2015 04:27 Plit NYSCEF DOC. NO. 1 INDEX NO. 651695/2015 RECEIVED NYSCEF: 05/15/2015 SUPREME COURT OF THE STATE OF NEW YORK NORDDEUTSCHE LANDESBANK GIROZENTRALE and HANNOVER FUNDING COMPANY LLC, V. LYNN TILTON; PATRIARCH PARTNERS, LLC: PATRIARCH PARTNERS XIV, LLC; AND PATRIARCH PARTNERS XV, LLC, Defendants. Index No. 651695/2015 Date Purchased: May 15, 2015 SUMMONS WITH NOTICE Plaintiffs designate New York County as the place of trial. The basis of venue is CPLR 503 because Plaintiffs' principal New York offices are in New York County. TO THE ABOVE-NAMED DEFENDANTS: PLEASE TAKE NOTICE THAT YOU ARE HEREBY SUMMONED and required to appear in this action by serving a copy of your notice of appearance upon the undersigned within twenty (20) days after the service of this summons, exclusive of the day of service, or within thirty (30) days after service is complete, if this summons is not personally delivered to you within the State of New York. In case of your failure to appear or answer, judgment will be taken against you by default for the relief demanded herein. Venue is proper in this Court pursuant to CPLR 503(a) and (c) because Plaintiffs' principal New York offices are in New York County.
NOTICE: This is an action for compensatory and punitive damages and other relief against Defendants Lynn Tilton; Patriarch Partners, LLC; Patriarch Partners XIV, LLC; and Patriarch Partners XV, LLC (collectively, "Patriarch" or "Defendants"), for fraud in connection with the sale of notes in two investment funds, Zohar II 2005-1, Limited ("Zohar II") and Zohar III, Limited ("Zohar III," and with Zohar II, the "Zohar Funds" or "Funds"). Plaintiffs Norddeutsche Landesbank Girozentrale, through its New York branch, and Hannover Funding Company LLC, a New York-based limited liability company (collectively, "NORD/LB"), invested over $135 million in the Zohar Funds by purchasing Notes that, at the time ofnord/lb' s investment, were rated AAA/Aaa and AA-/Aa3 by Standard & Poor' s and Moody's. In making its decision to invest in the Funds, NORD/LB reasonably relied on the representations made by Patriarch in the offering materials and transactional documentation (including the Indentures and Collateral Management Agreements), and in the regular reports that Patriarch made regarding the loans ("Loans") in the Zohar Funds. The Zohar Funds were "blind" collateralized loan obligation ("CLO") funds. As blind funds, investors did not know the identity of the Loans, but were, under the transactional documentation, entitled to receive significant valuation and performance data on those Loans and the Loans' borrowers from Patriarch on a regular basis. It is now obvious that the vast majority of the information that NORD/LB received from Patriarch regarding the Zohar Funds, including the Loans in those Funds, was false and misleading. On March 30, 2015, the SEC issued an order (the "SEC Order") commencing a proceeding against Patriarch for, among other things, defrauding investors in the Zohar Funds. The SEC - after a significant investigation - alleged that Patriarch intentionally misrepresented 2
to investors, like NORD/LB, the value of the Loans held in the Zohar Funds, as well as the payment performance of those Loans. The SEC further found that Patriarch regularly prepared, and disseminated to investors in the Zohar Funds, false and misleading reports and financial statements that failed to properly apply valuation tests and categories to the Loans (thereby overvaluing the Loans), and failed to inform investors of the Loans' overall poor performance. In relevant part, the SEC Order provides: Since 2003, [Patriarch has] defrauded three [CLO] funds they manage and these funds' investors by providing false and misleading information, and engaging in a deceptive scheme, practice and course of business, relating to the values they reported for these funds' assets. Lynn Tilton, who controls and makes relevant decisions on behalf of [Patriarch], is responsible for all of these violations. (SEC Order at 2) Further, Patriarch's conduct was intentional. Indeed, in responding to the SEC Order, Patriarch has essentially conceded the SEC' s allegations and argues only that it was somehow allowed to undervalue and misrepresent the Loans. However, nothing in the transactional documents allowed Patriarch to do so. NORD/LB relied to its detriment on the material misrepresentations and omissions of Patriarch regarding the Zohar Funds. Those misrepresentations and omissions are set forth in, or were intentionally excluded from, the offering materials for the Funds, the Indentures, the Collateral Management Agreements, and in the numerous reports that Patriarch authored (which were provided to investors, including NORD/LB) regarding the Funds, among other documents. NORD/LB' s reliance on these misrepresentations and omissions was eminently reasonable: since the Zohar Funds were blind funds, NORD/LB could not conduct due diligence on individual borrowers and had to rely on Patriarch for accurate reporting regarding the Loans. 3
Indeed, in 2010 and 2011, NORD/LB contacted Patriarch about the operation of the Funds, and was told by Tilton that there were no issues with the quality or performance of the Loans. NORD/LB's causes of action against Defendants include fraud, fraudulent inducement and fraudulent concealment. The relief that NORD/LB seeks includes: An award of compensatory damages in an amount to be determined at trial, but no less than $44 million; An award of punitive damages in an amount to be determined at trial; Pre- and post-judgment interest; Reimbursement of costs and expenses of maintaining this action; and An award of such other and further relief as the Court may deem just and proper. YOU ARE HEREBY NOTIFIED that on your failure to appear or answer, a judgment will be entered against you by default in an amount to be determined at trial, but no less than $44 million, plus interest at the rate prescribed by law; and the costs of this action, including attorneys' fees. Dated: New York, New York May 15, 2015 David Berg (dberg@bafinn. om) Michael M. Fay (mfay@batrm.com) Jenny H. Kim (ikim@bafinn.com) 120 West 45t1i Street, 38 1 h Floor New York, NY 10036 Tel: (646) 766-0073 Fax: (646) 219-1977 Attorneys for Plaintiffs 4
ALkSTAlE LEGAL 07181-BF 07182-Bl 07183 GY 07184-WH 800.222.0510 www.ealegel.com Index No. 651695 Year20 15 SUPREME COURT OF THE STATE OF NEW YORK NORDDEUTSCHE LANDESBANK GIROZENTRALE and HANNOVER FUNDING COMP ANY LLC, - against - LYNN TILTON; PATRIARCH PARTNERS, LLC; PATRIARCH PARTNERS XIV, LLC; AND PATRIARCH PARTNERS XV, LLC., Defendants. SUMMONS WITH NOTICE ~ Attt,rneY.( s ).for Plaintiffs.. Noraaeutscne Lanaesbank Gtrozentrale and Hannover Fundmg Company LLC Office Address & Tel. No.: BERG & ANDROPHY 120 West 45th Street, 38 1 h Floor New York, NY I 0036 (646) 766-0073 Pursuant to 22 NYCRR 130-1.1-a, the undersigned, an attorney admitted to practice in the courts of New York State, certifies that, upon information and belief and reasonab e inquir, 1) the contentions cont d in the annexed document are not frivolous and that (2) if the annexed ument is n initiating plea g, (i) t matter was not obtained through illegal conduct, or that if it was, the atto or he persons responsi r the legal conduct are not participating in the matter or sharing in any fee e r ed then ro qnd that (ii) if he atte involves potential claims for personfll inj1j,..r;y or wrongful death, the matt r as not o t ined in violation 2 NYi 'RR.1200.41-a. August L5, LUl5 Dated:........ Signature........................... Michael M. Fay Print Signe Name......... Service of a copy of the within Dated: PLEASE TAKE NOTICE D I NOTICE OF g: ENTRY <l I u D NOTICE OF SETILEMENT Dated: Attorney( s) for is hereby admitted. that the within is a (certified) true copy of a entered in the office of the clerk of the within-named Court on 20 that an Order of which the within is a true copy will be presented for settlement to the Hon., one of the judges of the within-named Court, at on 20, at M. Attorney(s) for To: Office Address & Tel. No.: Attorney(s) for