FILED: NEW YORK COUNTY CLERK 08/16/ :46 PM INDEX NO /2014 NYSCEF DOC. NO. 12 RECEIVED NYSCEF: 08/16/2016

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1 FILED: NEW YORK COUNTY CLERK 08/16/ :46 PM INDEX NO /2014 NYSCEF DOC. NO. 12 RECEIVED NYSCEF: 08/16/2016 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK WELLS FARGO BANK, N.A, as Trustee for the registered holders of Credit Suisse First Boston Mortgage Securities Corp., Commercial Mortgage Pass- Through Certificates, Series 2007-C1, acting by and through its Special Servicer, Index No.: /2014 -against- Plaintiff, THE SHOREHAM LLC; and JOHN DOE #1 through JOHN DOE #50, the last fifty names being fictitious, the persons or parties intended being the tenants, occupants, persons, entities, or corporations, if any, having or claiming an interest in or lien upon the premises, described in the Complaint, AFFIRMATION IN SUPPORT OF EX PARTE APPLICATION FOR ORDER APPOINTING TEMPORARY RECEIVER IN MORTGAGE FORECLOSURE ACTION Defendants. Timothy J. Pastore, Esq., pursuant to CPLR 2106, and under the penalties of perjury, affirms as follows: 1. I am an attorney at law and am a partner of the firm of Duval & Stachenfeld, LLP, the attorneys of record for the Plaintiff in the within action and, as such, am fully familiar with the facts, circumstances and proceedings herein. 2. I make this application or the purpose of seeking the appointment of Jeff Kolessar (New York Fiduciary ID # ) as temporary receiver of the hotel that is the subject of this leasehold mortgage foreclosure action. 3. The Property is currently managed by SRNY Associates LLC ( Manager ), an operative affiliate of GF Management, under that certain Hotel Management Agreement, 1 1 of 11

2 dated June 30, 2015, between defendant The Shoreham LLC ( Shoreham or the Borrower ) and Manager. 4. Mr. Kolessar is employed by the GF Management. Given his relationship with Manager, Mr. Kolessar s appointment will allow for a seamless transition during the foreclosure process. The Leasehold Mortgage and the Property 5. This action is brought to foreclose a commercial Consolidated, Amended and Restated Leasehold Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing, dated as of October 13, 2006 (the Mortgage ), executed by Borrower to Column Financial, Inc. ( Column ), to secure the sum of $35,000,000 and interest, duly recorded under CRFN in the Office of the New York City Register, New York County on October 13, 2006, covering the leasehold interest for the premises known as and by street address West 55th Street, New York, NY, more fully described in Schedule A annexed hereto (the Property ), and commonly known as the Shoreham Hotel. 6. Specifically, the Property is comprised of the Parcel 1 Leasehold and the Parcel 2 Leasehold (as defined and detailed in paragraphs 10 to 19 of the Complaint) in two parcels of commercial real property situated in the State of New York, County of New York, having a tax map designation of Section 5, Block 1271, Lot 17 ( Parcel 1 ) and Lot 19 ( Parcel 2 ). The Property operates as a hotel. 7. Plaintiff, as trustee for the holders of Credit Suisse First Boston Mortgage Securities Corp., Commercial Mortgage Pass-Through Certificates, Series 2007-C1, acting by and through its special servicer, is the current holder of the Mortgage, all as 2 2 of 11

3 more fully set forth in the Complaint filed herein, a copy of which is annexed hereto as Exhibit A. Borrower s Payment Default 8. Borrower defaulted under the Mortgage by failing to make the monthly payment that was due on or prior to the July 11, 2014 Payment Date. 9. By letter dated August 5, 2014, among other things, Plaintiff notified Borrower of the occurrence of an Event of Default under the Mortgage. 10. Borrower has failed to cure any part of the defaults heretofore set forth and has not paid any of the sums due and payable to Plaintiff since the July 11, 2014 Payment Date. 11. The entire amount owing on said Mortgage lien is past due and has accumulated from the default on July 11, 2014 through August 9, 2016 as follows (exclusive of attorneys fees): Principal $33,935, Note Rate Interest $4,535, Default Interest $3,582, Late Charges $819, Tax Advances $2,805, Insurance Advances $207, Other Costs (survey, appraisal, PCR, ESA, title, etc.) $85, TOTAL DUE AS OF AUGUST 9, 2016 $45,970, of 11

4 12. The summons, complaint and notice of pendency of this action were all duly and regularly filed in the office of the County Clerk of New York County on October 15, 2014, and thus the action has been commenced. 13. The interest of the Plaintiff in said Property more fully appears from the Complaint, a copy of which is annexed as Exhibit A hereto and incorporated by reference with the same force and effect as if fully set forth herein. Plaintiff s Entitlement under the Mortgage to the Appointment of a Receiver 14. Pursuant to the Mortgage, Plaintiff is entitled to the appointment of a receiver of the rents, issues, profits, and income of the Parcel 1 Leasehold and the Parcel 2 Leasehold in any foreclosure action, without notice and without regard to the adequacy of the security for the indebtedness secured by the Mortgage. See Mortgage 7.1(g). 15. The Mortgage, a copy of which is annexed hereto as Exhibit B, contains, among other provisions, the following express paragraphs: Section 7.1 Remedies. Upon the occurrence and during the continuance of any Event of Default, Borrower agrees that Lender may take such action, without notice or demand, as it deems advisable to protect and enforce its rights against Borrower and in and to the Property, including, but not limited to, the following actions, each of which may be pursued concurrently or otherwise, at such time and in such order as Lender may determine, in its sole discretion, without impairing or otherwise affecting the other rights and remedies of Lender: * * * (g) apply for the appointment of a receiver, trustee, liquidator or conservator of the Property, without notice and without regard for the adequacy of the security for the Debt and without regard for the solvency of Borrower, any guarantor, indemnitor with respect to the Loan or of any Person liable for the payment of the Debt. Ex. B, 7.1(g). 16. R.P.L. 254 subdivision 10 construes said Section 7.1(g) as follows: 4 4 of 11

5 10. Mortgagee entitled to appointment of a receiver. A covenant that the holder of this mortgage, in any action to foreclose it, shall be entitled to the appointment of a receiver, must be construed as meaning that the mortgagee, his heirs, successors or assigns, in any action to foreclose the mortgage, shall be entitled, without notice and without regard to adequacy of any security of the debt, to the appointment of a receiver of the rents and profits of the premises covered by the mortgagee; and the rents and profits in the event of any default or defaults in paying the principal, interest, taxes, water rents, assessments or premiums of insurance, are assigned to the holder of the mortgage as further security for the payment of the indebtedness. 17. Upon information and belief, the present lessee of the Parcel 1 Leasehold and the Parcel 2 Leasehold is defendant Shoreham (as detailed in paragraphs 10 to 19 of the Complaint). 18. That Plaintiff is entitled to the appointment of a receiver, without notice, is made absolutely clear by the cited mortgage provision (i.e., Mortgage 7.1(g)) as well as the cited statutory construction thereof. R.P.L. 254(10). 19. Moreover, this issue has been litigated and the courts have held that the language in the subject Mortgage does indeed mean the plaintiff is entitled to the appointment of a receiver without notice. In this regard, we respectfully refer the Court to the following cases: The East New York Savings Bank v. 924 Columbus Associates, 628 N.Y.S.2d 642 (1 st Dept. 1995); State Street Bank and Trust Company v. Broadway/St. Nicholas, 625 N. Y.S.2d 217 (1 st Dept. 1995); Crossland Sav., FSB v. LoGuidice-Chatwal Real Est. Inv. Co., 549 N.Y.S.2d 697 (1 st Dept. 1990); 366 Fourth St. Corp. v. Foxfire Enterprises, 149 AD.2d 692, 540 N.Y.S.2d 489 (2d Dept. 1989); Baker v. Bloom, 146 A.D.2d 859, 536 N.Y.S.2d 267 (3 rd Dept. 1989); Clinton Capital Corp. v. One Tiffany Place Developers, Inc., 112 A.D.2d 911, 492 N.Y.S.2d 427 (2d Dept. 1985); Kestenberg v. Platinum Properties Corp., 112 AD.2d 268, 491 N.Y.S.2d 670 (2d Dept. 5 5 of 11

6 1985); Holmes v. Gravenhorst, 238 App. Div. 313, 263 N.Y.S. 738, reversed on other grounds, 263 N.Y. 148, 188 N.B. 258, 91 AL.R (2d Dept. 1933); Home Title Ins. Co. v. Isaac Scherman Holding Corp., 240 App. Div. 851, 267 N.Y.S. 84 (2d Dept. 1933); Febbraro v. Febbraro, 70 A.D.2d 584, 416 N.Y.S.2d 59 (2d Dept. 1979); Mandel v. Nero, 52 Misc.2d 604, 277 N.Y.S.2d 247 (1967); Wolf v. 120 Middleton Realty Corp., 221 N.Y.S.2d 110 (1961); Ardeb Realty Corp. v. East Estates, Inc., 12 Misc.2d 167, 178 N.Y.S.2d 972 (1957). 20. Not incidentally, this ex parte aspect has also resisted constitutional challenge. See Friedman v. Gerax Realty Associates, 100 Misc. 2d 820, 420 N.Y.S.2d 247 (1979); Massachusetts Mut. Life Ins. v. Avon Associates, Inc., 83 Misc. 2d 829, 373 N.Y.S.2d 464 (1975); City Partners Ltd. BMG v. Jamaica Savings Bank, 454 F. Supp (E.D.N.Y. 1978). The Need for a Receiver 21. Defendant Shoreham (Borrower) has not answered the Complaint in this action despite accepting service. A motion for default judgment and related relief shall soon be filed. 22. Defendant Shoreham (Borrower) committed waste and misappropriation with respect to the Property in the following respects: a. Borrower has failed to timely file tax returns and remit sales and occupancy taxes over to the State of New York, which resulted in all of the bank accounts and credit card receipts for the Property being seized and the accounts frozen. In addition, Borrower was subjected to penalties and interest for non-filing of returns. Under a full reservation of rights, Plaintiff advanced $120,000 to or for the benefit of the State of New York, in order to obtain a release of the levy upon accounts obtained by the State. 6 6 of 11

7 b. Without limitation, Borrower failed to pay real property taxes in the amount of $1,863, This amount was advanced and paid by Plaintiff. c. Without limitation, Borrower failed to pay New York State occupancy taxes in the amount of $54,198. This amount was advanced and paid by Plaintiff. d. Without limitation, Borrower has failed to pay New York City occupancy taxes in the amount of $117,825. This amount was advanced and paid by Plaintiff. e. Without limitation, Borrower failed to pay ground rent in the amount of $197, This amount was advanced and paid by Plaintiff. f. On or about July 13, 2016, Borrower demanded that Plaintiff pay $16,000 from operating funds for fees claimed to be due to Borrower s architect in connection with the application for a permanent certificate of occupancy. Plaintiff denied the request reminding Borrower that any and all fees and costs incurred in connection with obtaining a permanent certificate of occupancy are the exclusive obligation of Borrower and shall not be paid from any cash flow generated by the Property. Despite this, Plaintiff separately released funds to Borrower for the purpose of paying certain other operating expenses of the Property as requested by Borrower. On or about July 29, 2016, Plaintiff learned that the monies released by Plaintiff for the approved operating expenses were used by Borrower to pay Borrower s architect anyway. This constitutes misappropriation or conversion. g. In addition to the foregoing, Plaintiff learned on or about August 4, 2016 that, due to a lack of maintenance on the Property, a roof water tank needs to be replaced at the Property at a cost of approximately $45,000 (not including additional charges for plumbing). 23. Upon information and belief, the total revenues for the Property are approximately $11,405,000 per year or approximately $950,416 per month. 24. The aforesaid Property for which a receiver is sought herein is in danger of being lost by reason of Borrower s defaults as set forth in the Complaint, and in this affirmation, and your affirmant is informed and verily believes that the Borrower does not intend or is unable to correct its defaults alleged in the complaint. 7 7 of 11

8 Plaintiff Respectfully Suggests the Appointment of the Current Hotel Manager 25. Plaintiff has no objection to continuing the role of the Manager and is hereby seeking the appointment of Jeff Kolessar, a Senior Vice-President with GF Management, to serve as Receiver. As noted above, Manager is an operative affiliate of GF Management. Therefore, Mr. Kolesser has a relationship with Manager and is familiar with the operations of the Property. Mr. Kolessar is approved as a Receiver in the County of New York under Fiduciary ID # and has served in over 250 prior receivership assignments. The appointment of Mr. Kolessar is in the best interests of the Property in that his appointment as Receiver for the Property will allow the operation of the hotel to remain consistent during the foreclosure process. A copy of Mr. Kolessar s professional biography is annexed hereto as Exhibit C. 26. In the event the Court declines to appoint Mr. Kolessar, we respectfully request that another receiver with experience with hotels be appointed for the Property. 27. Plaintiff also requests that the current Manager remain in place at a minimum through the remainder of the Renewal Term of the Hotel Management Agreement (which Renewal Term runs to July 1, 2017). 28. No previous application for the relief requested herein or any other provisional remedy has been secured or sought in this action or in any other court, including the remedy of seizure of a chattel in an action to recover a chattel. 8 8 of 11

9 WHEREFORE, deponent respectfully requests an order by reason of the circumstances aforesaid appointing a Temporary Receiver of the rents and profits for the benefit of the Plaintiff pending in this action, with the usual powers and duties of receivers in such cases. Dated: New York, New York August 16, 2016 Attachments: Schedule A = Legal Description Exhibit A = Complaint (and its exhibits) Exhibit B = Mortgage Exhibit C = Kolessar Professional Biography TIMOTHY J. PASTORE 9 9 of 11

10 Title No.: 06NYM10578 Policy No. :H SCHEDULE A DESCRIPTION Parcel A (For Information Only: Block 1271, Lot 17): ALL that certain plot, piece or parcel of land situate, lying and being in the Borough of Manhattan, County of New York, City and State of New York, bounded and described as follows: BEGINNING at a point on the northerly side of 55 th Street, 475 feet westerly from the comer formed by the intersection of the said northerly side of 55 th Street with the westerly side of Fifth Avenue; RUNNING THENCE northerly parallel with the said westerly side of Fifth Avenue, 100 feet 5 inches; THENCE westerly parallel with the northerly side of 55 th Street, 25 feet; THENCE northerly again parallel with the westerly side of Fifth Avenue, 5 inches; THENCE westerly parallel with the said northerly side of 55 th Street, 25 feet; THENCE southerly again parallel with the westerly side of Fifth Avenue, 100 feet 10 inches to the northerly side of 55 th Street; and THENCE easterly alone the northerly side of 55 th Street, 50 feet to the point or place of BEGINNING. Parcel B (For Information Only: Block 1271, Lot 19): ALL that certain plot, piece or parcel of land situate, lying and being in the City, County and State of New York, bounded and described as follows: BEGINNING at a point on the northerly side of 55 th Street, 420 feet westerly from 5 th Avenue; RUNNING THENCE westerly along 55 th Street, 55 feet; THENCE northerly parallel with S 01 Avenue, 90 feet; THENCE easterly parallel with Street, 25 feet; THENCE northerly parallel with 5 th Avenue, 10 feet 5 inches; of 11

11 Title No,: 06NYM10578 Policy No,: H SCHEDULE A CONTINUED THENCE easterly parallel with 55,h Street, 30 feet; THENCE southerly parallel with 5 th Avenue, 100 feet 5 inches to the point or place of BEGINNING. END OF SCHEDULE A 4 11 of 11

BACM Carle Place Off., LLC v HLP Old Country TIC LLC 2012 NY Slip Op 33710(U) August 7, 2012 Sup Ct, Nassau County Docket Number:

BACM Carle Place Off., LLC v HLP Old Country TIC LLC 2012 NY Slip Op 33710(U) August 7, 2012 Sup Ct, Nassau County Docket Number: BACM 2005-6 Carle Place Off., LLC v HLP Old Country TIC LLC 2012 NY Slip Op 33710(U) August 7, 2012 Sup Ct, Nassau County Docket Number: 600710-12 Judge: Timothy S. Driscoll Cases posted with a "30000"