GOL~NBOCK EISEMAN ASSOR BELL & PESKOE«P

Transcription

1 GOL~NBOCK EISEMAN Attorneys at Law Madison Ave., New York, NY T (212) I F (212) I DiRec7 Diac No.: (2 / 2J DiRECr F,ax No.:!2 / 2J 75^ EMA/L ADDRESS: DEISEMAN~wGOLENHOCK. COM August 15, 2012 BY HAND AND ELECTRONIC FILING Hon. O. Peter Sherwood Supreme Court of the State of New York, New York County 60 Centre Street, Room 615 New York, New York Re: Arkin Kaplan Rice LLP v. Kaplan, et al. (Index No /2012) Dear Justice Sherwood: We write to respond, briefly, to the letter to the Court this morning from Defendants' counsel, Arthur Ciampi, Esq. (the letter is dated August 14, but was filed and sent this morning, August 15.) We address only the two new issues raised in Mr. Ciampi's letter: his assertion that the payment his client made in respect of August rent (which has still not been paid to the sublandlord because Mr. Kaplan and Ms. Rice have refused to sign the rent check) is based on a false invoice and constitutes conversion; and Defendants' request for a temporary receiver. The August Rent Calculation Mr. Ciampi states that that AKR's lawyer has been "suspiciously silent on the issue" of the alleged miscalculation of Kaplan Rice LLP's ("KR LLP") share of the August rent. (Ciampi Letter, at 3) Inexplicably, Mr. Ciampi omits any reference to the letter I sent him which responds to his allegations in detail. A copy of that letter, which was sent to Mr. Ciampi and his partner well in advance of his writing his letter to the Court his morning, is attached hereto as Exhibit A. As stated there, not only is the amount charged to Mr. Ciampi's clients appropriate, but the amount is exactly the amount calculated by Mr. Kaplan, Mr. Ciampi's client. The basis for the calculations is discussed in detail in my letter to Mr. Ciampi and I respectfully refer the Court to the contents of the letter. Defendants' Request for a Temporary Receiver Since the July preliminary injunction hearing (the "Hearing"), Mr. Ciampi's clients have concocted one issue after another. Behind this smokescreen, they have still failed to do the two things the Court clearly ordered at the Hearing: First, they have failed to account for or remit any receivables for the period May 1 through May 17. Second, they have failed to authorize the

2 GOLENBOCK EISEMAN Hon. O. Peter Sherwood August 15, 2012 Page 2 payment of August's rent this, despite the Court's direction by on August 8 that the rent should be paid now and "[i]f defendant Kaplan Rice LLP is entitled to any credits or setoffs, that matter may be addressed at the time of a final accounting." Mr. Ciampi concedes his letter this morning that his clients have done neither. There is no valid excuse for Defendants' refusal to comply with the Court's Order. They should be ordered to comply immediately. Now, relying on the issues they have manufactured since the Hearing, Defendants ask the Court to impose a temporary receiver, which would give them a further opportunity to avoid remitting receivables to AKR and paying rent to the sublandlord. We oppose the appointment of a temporary receiver and have an alternative proposal. With Mr. Ciampi's last letter, it is entirely clear that the goal of Defendants' course of conduct has been to lay the groundwork for a request for appointment of a receiver. In addition to giving Defendants a further opportunity to delay compliance with the Court's July 20 Order, imposing a receiver would, if the costs are assessed against AKR, put disproportionate financial pressure on Mr. Arkin because he owns a majority of the firm in dissolution, a point that is no doubt part of Defendants' calculus. We oppose the appointment of a receiver as not in the interest of AKR. We also submit that the extreme remedy of appointing a receiver should not be based on the unsupported, unsworn allegations of Mr. Ciampi and should not occur without a formal motion and on the basis of sworn testimony by the parties. On the other hand, we believe that it would be helpful to put an end to Defendants' continuing efforts to distract the parties, and the Court, with manufactured issues that have little, if any, relationship to the winding up process. Accordingly, we propose that Mr. Arkin be designated as the winding up partner with exclusive authority, subject of course to the Court's rulings, to collect receivables and pay AKR obligations (he already has the latter authority pursuant to AKR's account documents with AKR's bank). All of Defendants' claims and rights would be reserved until a final accounting. Mr. Arkin is prepared to make an in camera showing of his financial ability to satisfy any claims Defendants might ultimately assert. An orderly winding up process would greatly benefit from the appointment of single winding up partner, and Mr. Arkin is best situated to carry out that function and to provide assurance that any claims that might ultimately be asserted in connection with the process can be satisfied. In the event, however, that the Court does appoint a temporary receiver, we submit that the cost of the receiver should not be borne by AKR; AKR itself has done nothing to warrant imposing that cost on it. Any such cost, rather, should be borne by KR LLP and Arkin

3 GOLENBOCK EISEMAN Hon. O. Peter Sherwood August 15, 2012 Page 3 Solbakken LLP in the proportion the Court has already ruled that they must share expenses. Any reallocation of amounts between the firms can be reserved for the final accounting. ~'~ David J. iceman cc:.arthur Ciampi, Esq

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5 COLENBOCK EISEMAN ASSOR BALL & PESKOE«P Attorneys at Law Madison Ave., New York, NY 1A T (212) I F (212) I DIRECT D/AL NO, : (2 / DiRecr F.4x No.: (2 / 21 75A~0330 EMA/L APPRE33: PEl3C"MAN~OOLEN90CK.CpM August 14, Via and First-Class Mail Arthur J. Ciampi, Esq. Ciampi LLC 39 Broadway, Suite 520 New York, New York Dear Arthur: Re: Arkin Kaplan Rice LLP ("AKR "~ This responds to your letter of yesterday concerning the calculation of Kaplan Rice LLP's ("KR LLP") share of rent for August Let me start off by saying that there is no basis whatsoever for the wild allegation in your letter that Kris Collins made false representations to your client in connection with the calculation of KR LLP's share of the rent. Ms. Collins calculated the amount owed by each of KR LLP and Arkin Solbakken LLP ("AS LLP") and provided all parties with her calculations so they could understand exactly how she had arrived at the numbers. Everything was transparent. Indeed, Mr. Kaplan told Ms. Collins that he disagreed with her calculations concerning the escalations and Ms. Collins discussed the matter with him. The amount KR LLP actually paid was the amount that Mr. Kaplan proposed paying based on his own calculations. Your letter makes no reference to any of these facts, and instead lashes out at Ms. Collins, accusing her, without a shred of support, of having made "false" representations to your clients concerning the amount owed and of having "knowingly and successfully misrepresented" those amounts to your clients. To say the least, your statements are outrageous, Your clients are free to disagree with the way in which their share of AKR's rent has been calculated. Any such disagreements will be given due consideration. That is no excuse, however, for lacing your letter with vitriolic and wholly unfounded allegations against Ms. Collins. As to the substance of your letter; I have reviewed the approach taken by Ms. Collins in her initial calculations, as well as the approach reflected in Mr. Kaplan's calculations and the objection stated in your letter. Ms. Collins's initial calculations took the total amount of the escalation (($185,312.35, as billed in June), divided that amount by the six-month period from July through December and allocated one-sixth of that amount to August's rent. There is a

6 GOLENBQCK EISEMAN Arthur J. Ciampi, ~sq. August 14, 2012 Page 2 reasonable basis for this approach. The total amount of the escalation was actually due with June's rent. Paying one-sixth of the rent in each of Juzie, July, August, September, October and November is therefore appropriate. Notably, this is the basis on which AS LLP paid its share of the escalation far August. As 1 understand your letter, your position, and that expressed in the from Ms, Rice that you attached to the letter, is that because the pro-rata escalations cover asixth-month period (July through December) and because only four months of pro-rata payments remain after the payment of one-sixth of the amount of the escalation in each of June and July, no payment was due for August, and the four remaining pro-rata payments should be made in September, October, November and December. The pxoblem with this approach is that it treats the escalations as not coming due until July, and then treats the payment in June as in effect a prepayment of the July portion of the escalation, with the payment in July then being treated as a prepayment of August's portion of the escalation. In fact, however, the entire amount of the escalation was due with June's rent, and there is no basis for skipping a month's payment of the escalation before it is all paid. A third approach, and one that I believe is, like Ms. Collins's initial approach, reasonable from the perspective of AKR (though not necessarily acceptable to the sublandlord), is to take the remaining unpaid portion of the escalation as of August 1, and divide it equally by the number of months remaining in the year. I understand that this is the approach Mr. Kaplan advocated as the correct approach in his discussions with Ms. Collins and, indeed, the amount due from KR LLP for the pro-rata escalation under this approach is the exact amount calculated by Mx. Kaplan and the amount that KR LLP actually paid with August's rent. In short, the approach taken in your letter in contrast to Ms. Collins's initial approach and Mr. Kaplan's approach is not a reasonable approach to calculating the portion of the escalation due from KR LLP (or AS LLP) for August. There is, accordingly, no basis for AKR to provide your clients with a refund of the amount they have paid for August's rent. Likewise, there is no basis for your clients to refuse to sign AKR's August rent payment to the sublandlord. Any attempt to interfere with ar delay that payment, ox a refusal to sign off on it, will be brought to the Court's attention, 3 cerely, ~~1~ David J. E eman