2018 10:37 am

SUPREME COURT OF THE CITY OF NEW YORKNEW YORK COUNTY------------------------------------------------- -x

Index No. 652365/2014(E)JEFFREY WEINSTE1N,

Plaintiff, VERIFIEDAMENDED &

- against - SUPPLEMENTALCOMPLAINT 1

W.W.W. ASSOCIATES, LLC, LEON WEINSTEIN,KENNETH WEINSTEIN, and BALE CORP., IAS Part 54

(Schecter, J.)Defendants.

----------------------------------- x

Plaintiff, JEFFREY WEINSTEIN, by his attorneys, BORAH, GOLDSTEIN,

ALTSCHULER, NAHINS & GOIDEL, P.C., as and for his verified complaint against

defendants W.W.W. ASSOCIATES, LLC ("WWW"), LEON WElNSTEIN, KENNETH

WElNSTEIN (Leon and Kenneth Weinstein collectively the "Weinstein Defendants"), and

BALE CORP., alleges:

INTRODUCTION

1. Plaintiff JEFFREY WElNSTE1N is, and at all relevant times was, a member of

WWW, with a 25% interest therein.

2. He filed this action seeking a copy of the Operating Agreement, access to

WWW's books and records, and an accounting, along with damages and related relief.

3. WWW was formed in New York in 1998 as a special purpose entity for holding

and operating real estate, specifically a 202-unit garden apartment complex in Somerset New

BORAH, JerSey (Since SOld).

GOLDSTEIN,ALTSCHULER,

NAHINS &GOlDEL, P.C.

377 BROADWAY3300993 ¹ Amended pursuant to Decision & Order entered July 27, 2018 (NYSCEF Doc. 192)

(motion seq. #1) ("Decision").

FILED: NEW YORK COUNTY CLERK 08/17/2018 10:37 AM INDEX NO. 652365/2014

NYSCEF DOC. NO. 197 RECEIVED NYSCEF: 08/17/2018

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4. Each"W"

in WWW represents a Weinstein: (i) plaintiff's father Leon

Weinstein, (ii) plaintiff Jeffrey Weinstein, and (iii) plaintiff's brother Kenneth Weinstein.

5. At all relevant times Leon Weinstein owned at least a 49% interest in WWW,

Kenneth Weinstein owned a 25% interest in WWW, and since January 29, 2013, Bale Corp.

owned no more than a 1% interest in WWW.

6. Approximately 20 years ago, plaintiff disassociated from WWW's day-to-day

operations, but retained his 25% interest in WWW.

7. Defendants thereafter operated WWW by keeping plaintiff in the dark even of

major changes, contrary to the governing documents and duties at law, including- as discovery

in this action so far has revealed - Leon Weinstein treating WWW as his personal piggy bank

to the tune of millions of dollars; defendants enabling same by converting equity to cash

through a series of mortgages on the property without notifying plaintiff or obtaining his

consent; defendants draining WWW of cash to their own personal benefit and improperly

comingling WWW funds with and to the benefit of other entities not involving plaintiff;

defendants repeatedly allowing periods where there was no managing member entity in

existence and secretly replacing the WWW's managing members; and defendants contracting

to sell WWW's principal real estate asset with no notice to plaintiff or his counsel or the court

even during a court conference in this case, harboring the agreement's existence for months,

past a court discovery deadline to do so, until the last moment, ambushing plaintiff with a fait

accompli and emergency demand for his required signature.

BORAH,°

°c8. The Weinstein defendants diverted WWW funds to themselves and their other

NAHINS &GOIDEL, P.C. business ventures in two principal ways: (i) directly from WWW, and/or (ii) through

377 BROADWAYNY, NY 10013-3993

(212) 431-1300

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Metropolitan Homestead Co., Ltd. ("Metropolitan"), an entity similarly controlled by Leon

Weinstein and used as a clearinghouse for the individualdefendants'

various ventures.2

9. When defendant Leon Weinstein was questioned at his deposition about the

basis for funds taken from WWW, his stock refrain was that he was owed from a loan years

back, the exact date and amount of which he could not identify. Nonetheless, any loans listed

on WWW's internal trial balances never reduced.

10. A few months prior to this suit being filed, WWW's accountants expressed

confusion over the intercompany transactions, stating in a March 7, 2014 email:

Attached is a schedule taken from the final trial balances of WWWfrom 2005-2012. It shows the related party receivables and payables

as recorded on the books of WWW. I cannot explain why where are

so many different accounts. . . . [M]any of these numbers have not

changed . . . since 2005. I cannot go back further as it is beyond our

records retention period and all of our filed have been destroyed. . . .

(NYSCEF Doc. 111 (WWW005510-WWW005511)).3

11. When questioned during deposition of the basis for transferring Metropolitan

funds to his wife Barbara Weinstein and what services she performed, Leon Weinstein

responded tellingly:

For the companies? Me. I was the company. I was the

president. I had to go ahead and keep everybody happy and she

had to keep me happy.

2 Metropolitan's shareholders are plaintiff (25%), Leon Weinstein (50%), and Kenneth

Weinstein (25%). Plaintiff has similarly been locked out of Metropolitan, and has received no

BORAHGOLDSTEIN, effrey WeinStein V. Metropolitan Homestead Co.. Ltd., et al., Index No. 1611961/2014(E)

ALTSCHULER, (N.Y. Sup. Ct. New York County) (Kornreich, J.) ("Metropolitan Action"). Metropolitan

GO D L P.c.ceased operations as of the end of 2013.

377 BROADWAY 3 Documents were produced by defendants for both actions not Bates-stamped,Y Y 013939993

SubSequently number-stamped by plaintiff's counsel in the form "WWW "and

"Metro,"

and provided back todefendants'

counsel.

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(NYSCEF Doc. 166, 5/13/16 LW EBT at pg. 151)4

12.Defendants'

pattern of self-dealing has continued since the filing of this action

and exchange of WWW's New Jersey property for two properties in New York.5

13. Due to defendants continuing delaying and frustrating discovery- such as

plaintiff's two year quest to deposedefendants'

bookkeeper, ordered by the Court since 2016

but still not accomplished, now awaiting further discovery (NYSCEF Docs. 25, 44, 49, 52, 60)

- plaintiff, though documenting millions of dollars of improper diversions, upon information

and belief likely has not uncovered the full extent ofdefendants'

wrongdoing.

THE PARTIES

14. Plaintiff JEFFREY WEINSTEIN is a natural person residing in New York

County, New York.

15. Defendant W.W.W. ASSOCIATES, LLC ("WWW") is a domestic limited

liability company created and existing under the laws of the State of New York, previously

with a principal place of business at 163-03 Horace Harding Expressway, Fresh Meadows,

New York 11365, upon information and belief having a principal place of business at 3 Quaker

Lane, Old Westbury, New York 11365.

16. Defendant LEON WEINSTEIN is a natural person residing in Nassau County,

New York, upon information and belief at 3 Quaker Lane, Old Westbury, New York 11365

GOL DS E N,4 "LW EBT"

refers to the transcript of deposition Leon Weinstein, deposed on May 13,

ALTSCHULER, October 6, and October 20, 2016. The page numbers of the transcripts continue consecutivelyNAHINS &

day to day

37 ROAD AÎ 5 Under the management agreements for the new properties, plaintiff is to receive

NY, NY 10013-3993monthly property management reports, yet for 2017 has received only January-March and none

(²¹²) 43¹-'3°°for 2018, and many of the reports received have been late by up to year or more.

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17. Defendant KENNETH S. WEINSTE1N is a natural person residing in Nassau

County, New York.

18. Defendant BALE CORP. is a domestic corporation created and existing under

the laws of the State of New York, having a principle place of business at 163-03 Horace

Harding Expressway, Fresh Meadows, New York 11365.

BACKGROUND

L WWW GOVERNANCE STRUCTURE

A. Governance Documents

(i) Initial Articles of Organization (filed 2/3/98)

19. WWW's initial Articles of Organization, signed by Leon Weinstein as

organizer, and filed February 5, 1998, provides that WWW "is to be managed by one (1) or

moremembers."

(Articles of Org. ¶ 5 (WWW004447-4449) (NYSCEF Doc. 95).

(ii) Amended Articles of Organization (filed 3/4/981

20. WWW's Amended Articles of Organization (WWW004450-4450) (NYSCEF

Doc. 96), signed solely by Leon Weinstein as President of 555 Shore Road Corp., a member,

and filed March 4, 1998, retains paragraph 5 of the original Articles of Organization (above),

and provides (among other things):6

(a) "The Company's business and purpose shall consists solely of the acquisition,

ownership, operation and management of the real estate located at 555 Shore

Road & Bethal Road, Somers Point (Atlantic County), New Jersey . .."

(Am.

Articles of Org. ¶ 7);

BORAH, (b) "The LLC shall only incur indchtedness in an amount necessary to acquire,GO

DCULE ,operate and maintain the

Property"(id. ¶ 8);



(212) 431-1300 6 All bold on the governance documents added.



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(c) "It shall establish and maintain an office through which business shall be

conducted separate and apart from those of its parent and any affiliate and

shall allocate fairly and reasonably any overhead for shared officespace"

(id ¶9(1));7

(d) "It shall maintain separate corporate records and books of account from those of

its parent and anyaffiliate"

(id ¶ 9(2));

(e) "Its Members shall hold appropriate meetings (or act by unanimous consent) to

authorize all appropriate company actions, and in authorizing such actions, shall

observe all companyformalities"

(id ¶ 9(3));

(f) "It shall not commingle assets with those of its parent and anyaffiliate"

(id

¶ 9(4));

(g) "It shall maintain an arm's length relationship with its parent and anyaffiliate"

(id ¶ 9(8));

21. In defining Parent and Affiliate, the Amended Articles of Organization provide:

(a)"'Parent'

means, with respect to an LLC, any other corporation, entity or person

owning or controlling, directly of [sic] indirectly, fifty percent (50%) or more of the

voting interest of theLLC"

(id ¶ 12);

(b)"'Affiliate'

means any person controlling or controlled by or under common control

with the parent, including, without limitation (i) any person who has a familial

relationship, by blood, marriage or otherwise with any director, officer or employee

of the corporation, its parent or any affiliate thereof and (ii) any person which

receives compensation for administrative, legal or accounting services from this

corporation, its parent or any affiliate. For purposes of this definition,'control'

when used with respect to any specified person, means the power to direct the

management and policies of such person, directly or indirectly, whether through the

ownership of voting securities, by contract or otherwise; and the terms

'controlling['] and'controlled'

have meañiñgs correlative to theforegoing."

(id

¶ 12).

BORAH,GOLDSTEIN,

ALTSCHULER, 7 The provisions of paragraph 9 of the Amended Articles of Organization apply "[fjor so

Go)DÎL P.C. long as any mortgage lien exists [on] the Property, in order to preserve and ensure its separate

377 BROADWAY and distinct corporateidentity"

(id ¶ 9). A mortgage lien existed on the property during theo30993

entire period the Amended Articles of Organization applied.



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(iii) LLC Oneratine Agreement

22. WWW's initial Operating Agreement (DEF 0007-0016) (NYSCEF Doc. 97) is

dated "March _,1998"

(the day blank) and signed by the three Weinsteins, as well as Leon

Weinstein as President of 555 Shore Road Corp.

23. The Operating Agreement defines "ManagingMember"

as "555 SHORE ROAD

CORP. and any other person admitted to the Company as a substitute managing member of the

Company in accordance with the provisions of this Agreement, until such time as such person

ceases to be a managing member of the Company as providedherein"

(Operation Agreement

§ 2(b) at pg. 2).

24. In a section titled Purpose (section 3), the Operating Agreement provides:

The sole purpose of the Company shall be to own, hold, maintain,

manage, operate, improve, lease and, if and when appropriate, to sell

or otherwise dispose of the Property, together with such activities as

may be necessary or advisable in connection with the ownership of

the Property. The Company shall not engage in any business or own

any assets other than those related to the Property or otherwise in

furtherance of the purpose of the Company. The Company shall not

incur any indebtedness other than the Loan[8] or any refinancing

thereof, or other than in connection with the operation of the

Property.

25. In a section titled Members (section 5), the Operating Agreement provides (in

relevant part):

(a) . . . The business and affairs of the Company shall be managed bythe members, except as provided in § 17 hereof. The Members shall

have the power to do any and all acts necessary or convenient to or

for the furtherance of the purposes described herein, including all

BORAH,GOLDSTEIN,

ALTSCHULER,

GO D L PC.8 The Loan is defined as to be made by Lender (Credit Suisse First Boston Mortgage

377 BROADWAY Capital LLC) on or about the date of the Operating Agreement, capped at $5.6 million

2 co | (Operating Agreement § 2). That loan occurred and remained until discharged in May 2008,

replaced by a series of loans by Banco Popular at greater cumulative capped amounts.

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powers, statutory or otherwise, possessed by members under the

laws of the State of New York. . . .

(b) At all times the Company shall have at least one member

which owns at least a 1% interest in the Company and whose

articles of incorporation are substantially similar to those of 555

SHORE ROAD CORP. (the "Managing Member").

(c) Upon the withdrawal or the disassociation of the ManagingMember from the Company, the Company shall immediately appoint

a new Managing Member.

26. Section 17 of the Operating Agreement (referred to above in section 5), titled

Management, provides:

Notwithstanding anything to the contrary contained herein, until

such time as the Loan shall be fully paid in accordance with the

terms of the Note, Mortgage and other Loan Documents (as defined

in the Mortgage) and the lien of the Mortgage shall be released from

the Property, the Managing Member shall be a corporation, the sole

purpose of which is to act as Managing Member of the Company,

which, for itself, satisfies the covenants of § 16 hereof, and which

has an independent director. The Independent Director shall be

a person who is not and for the prior two years has not been (i) a

stockholder shareholder, partner, officer or employee or other

director of the Managing Member, the Company, or anysubsidiaries or Affiliates thereof (ii) a member of the immediate

family of any such stockholder, director, partner, officer,

employee or other director of the Managing Member, the

Company, or any subsidiaries or Affiliates thereof, (iii) a person

or other entity controlling or under common control with anysuch stockholder, director, officer, employee, partner, member

or other person or (iv) a customer, supplier, or other person who

derives more than 10% of its purchases or revenues from its

activities with the Managing Member or the Company or any

Affiliate of either of them.

27. Section 16 of the Operating Agreement (referred to in section 17), titled

BORAH,GO

CH E separateness, provides:

NAHINS &GOlDEL, P.C·

(a) The Company shall (i) observe all limited liability company

y y°^o°o 3 3993 formalities, including the maintcñañce of current =inute books,

(212) 431-1300 (ii) maintain its own separate and distinct books of account, bank

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accounts, and limited liability company records, (iii) cause its

financial statements to be prepared in accordance with generallyaccepted accounting principles in a manner that indicates the

separate existence of the Company and its assets and liabilities, (iv)

pay all its liabilities out of its own funds, (v) in all dealings with the

public, identify itself, and conduct its business, under its own name

and as a separate and distinct entity, (vi) independently make

decisions with respect to its business and daily operations, (vii)maintain an arm's length relationship with its "Affiliates", (viii)

pay the salaries of its own employees, (ix) allocate fairly and

reasonably any overhead for shared office space, (x) use separate

stationery, invoices and checks, (xi) at all times remain solvent, (xii)file its own tax return and (xiii) maintain adequate capital sufficient

to carry out these enumerated covenants and conduct its business as

described herein.

(b) The Company shall not (i) commingle its assets with those of, or

pledge its assets for the benefit of, any other person, (ii) assume,

guarantee or become obligated, or hold out its credit as beingavailable to satisfy the debts, liabilities or obligations of any other

person, (iii) acquire obligations or securities of, or make loans or

advances to, any Affiliate or (vi) incur any indebtedness except in

accordance with the Mortgage.

28."Affiliate"

is defined in the Operating Agreement as "any person controlling,

under common control with, or controlled by the person in question, and the term'control'

means the possession, directly or indirectly, of the power to direct or cause the direction of the

management and policies of a person, whether through ownership of voting securities, by

contract orotherwise"

(Operating Agreement § 2 at pg. 1).

29. Section 7 of the Operating Agreement, titled Management of the Comoany,

provides (in relevant part):

(a) Any action to be taken by the Company shall require the

BORAH, afÍirmatiVe vote of Members holding a majority of the limited

c e liability company interest of the Company (except as otherwise

NAHINS & eXpressly provided herein). Any action so approved may be taken byGOlDEL, P.C·

any Member on behalf of the Company....377 BROADWAYNY, NY 10013-3993

(212) 431-1300

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(c) No Members shall take, or cause to be taken, any action that

would result in any Member having any personal liability for the

obligations of the Company. The Members shall be under a dutyas described herein to conduct the affairs of the Company in the

best interests of the Company and of the Members including the

safekeeping and use of all Company funds and assets and the use

thereof for the exclusive benefit of the Company.

(d) No Member shall be liable, responsible or accountable in

damages or otherwise to the Company or to any other member for (i)

any act performed within the scope of the authority conferred on the

Members by this Agreement except for the gross-ñêgligence or

willful misconduct of such Member in carrying out the

obligations of such Member hercunder, (ii) such Member's failure

or refusal to perform any act, except those expressly required by or

pursuant to the terms of this Agreement, (iii) such Member's

performance of, or failure to perform, any act on the reasonable

reliance on advise of legal counsel to the Company or (iv) the

negligence, dishonesty or bad faith of any agent, consultant or broker

of the Company selected, engaged or retained in good faith. In any

threatened, pending or completed action, suit or proceeding, each

Member shall be fully protected and indemnified and held harmless

by the Company against all liabilities. obligations, losses, damages,

penalties, actions, judgments, suits, proceedings, costs, expenses and

disbursements of any kind or nature whatsoever (including, without

limitation, reasonable attorneys'fees, costs of investigation, fines,

judgments and amounts paid in settlement, actually incurred by anysuch Member in connection with such action, suit or proceeding) byvirtue of its status as Members or with respect to any action or

omission taken or suffered in good faith, other than liabilities and

losses resulting from the gross negligence or willful misconduct of

such Member; provided, however, that any such Member shall not

be so indemnified for any acts determined to be in contravention of

this Agreement or in breach of its fiduciary duties. The

indemnification provided by this paragraph shall be recoverable onlyout of the assets of the Company, and no Member shall have anypersonal liability on account thereof.

30. Section 8 of the Operating Agreement, titled Restrictions on Authority of the

BORAH,

Â°Êcu Members and the Managing Member, provides (in relevant part):


(a) Neither the Managing Member nor any other Member shall377 BROADWAYNY, NY 10013-3993 aPProve nor shall the Company undertake (i) the incurrence or

(212) 431-1300 assumption on behalf of the Company, directly or indirectly, of



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any indebtedness other than liabHities incurred in the ordinarycourse of business relating to acting as the Managing Member or

Member of the Company or (ii) the grant of a security interest of anynature whatsoever in the Company's assets.

(b) Neither the Managing Member nor any Member shall (i)cause or permit the Company to . . . (B) engage in any business

activity not described in Section 3 above or (C) amend, modify,

waive or terminate this Agreement or the certificate of formation of

the Company, . . . (iii) transfer, lease or sell, in one transaction or

any combination of transactions, the assets of all or substantially all

of the properties or assets of the Company or the Managing Member,

. . . in each case, unless the Managing Member shall provide written

confirmation from each of the Rating Agencies, if any, that such

action, in and of itself, will not cause such Rating Agency to qualify,

downgrade, or withdraw its then-current rating for any interest in the

Company.

31. Section 11 of the Operating Agreement provides (in relevant part): "No

member shall have the right to resign from the Cespâñy except with the consent of all of

the members and upon such terms and conditions as may be specifically agreed upon between

the resigning Member and the remainingMembers."

(iv) Ameñded & Restated Articles of Organization (filed 5/13/15)

32. Subsequent to the filing of this action,.in connection with a sale and exchange of

its real estate assets, WWW amended its articles of organization by its Amended and Restated

Articles of Organization, filed May 13, 2015 (NYSCEF Doc. 98).

33. In relevant part, the amendment expanded the company's purpose beyond its

prior special and sole purpose and permitted any lawful act or activity under the LLC law, with

certain (upon information and belief inapplicable) exceptions (Restated Articles of

BORAH,

Â°Êc e Organization ¶ 7).

.NAHINS &GOIDEL, P.C.


(212) 431-1300

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(v) Amcaded & Restated LLC Operating Agreemêñt (5/12/15)

34. WWW also amended and restated its Operating Agreement as of May 12, 2015

("2015 Operating Agreement") (NYSCEF Doc. 99).

35. The 2015 Operating Agreement defines "ManagingMember"

as before,

substituting "BALE CORP."for "555 SHORE ROAD CORP."

(2015 Operating Agreement § 2

at pg. 3).

36. In a section addressing Purpose (section 3), the purpose was expanded to cover

the multiple properties, providing:

The purpose of the Company shall be to own, hold, maintain,

manage, operate, improve, lease and, if and when appropriate, to sell

or otherwise dispose of the Properties, together with such activities

as may be necessary or advisable in connection with the ownershipand management of the Properties. The Company shall not engage in

any blisiness or own any .assets other than those related to the

Properties or otherwise in furtherance of the purpose of the

Company.

37. In a section titled Members (section 5), the 2015 Operating Agreement provides

(in relevant part):

(a) . . . The business and affairs of the Company shall be managed bythe members. The Members shall have the power to do any and all

acts necessary or convenient to or for the furtherance of the purposes

described herein, including all powers, statutory or otherwise,

possessed by members under the laws of the State of New York. . . .

(b) At all times the Company shall have at least one member which

owns at least a 1% interest in the Company and whose articles of

incorporation are substantially similar to those of BALE CORP. (the

"Managing Member").BORAH,

c (c) Upon the withdrawal or the disassociation of the ManagingNAHlNS & Member from the Company, the Company shall immediately appoint

37 BROADWNY, NY 10013-3993

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38. Section 16 of the 2015 Operating Agreement, titled Separateness, repeats the

provisions of that section in the prior Operating Agreement.

39."Affiliate"

is def-med in the 2015 Operating Agreement as in the prior Operating

Agreement (2015 Operating Agreement § 2 at pg. 2).

40. Section 7 of the 2015 Operating Agreement, titled Management of the

Company, provides (in relevant part & with emphasis added):

(a) Any action to be taken by the Company shall require the

affirmative unanimous vote of Members. Any action so approved

may be taken by any Member on behalf of the Company. . . .

(c) No Members shall take, or cause to be taken, any action that

would result in any Member having any personal liability for the

obligations of the Company. Notwithstanding the foregoing, any

Member, [sic] may take any action that such Member deems

advisable, in such Member's sole and absolute discretion, which may

result in such Member having a personal liability for an obligation of

the Company, such as, for example, the undertaking of a personal

guaranty of any loans made to the Company. The Members shall be

under a duty as described herein to conduct the affairs of the

Company in the best interests of the Company and of the Members

including the safekeeping and use of all Company funds and assets

and the use thereof for the exclusive benefit of the Company.

(d) No Member shall be liable, responsible or accountable in

damages or otherwise to the Company or to any other member for (i)

any act performed within the scope of the authority conferred on the

Members by this Agreement except for the gross-negligence or

willful misconduct of such Member in carrying out the obligations of

such Member hereunder, (ii) such Member's failure or refusal to

perform any act, except those expressly required by or pursuant to

the terms of this Agreement, (iii) such Member's performance of, or

failure to perform, any act on the reasonable reliance on advise of

legal counsel to the Company or (iv) the negligence, dishonesty or

BORAH, bad faith of any agent, consultant or broker of the Company selected,

cH engaged or retained in good faith. In any threatened, pending or

NAHINS & completed action, suit or proceeding, each Member shall be fully

37 BROAD ANY, NY 10013-3993 againSt all liabilitiCS. ObligatiOnS, lOSses, damages, penalties, actions,(212) 431-1300 judgments, suits, proceedings, costs, expenses and disbursements of

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any kind or nature whatsoever (including, without limitation,

reasonableattorneys'

fees, costs of investigation, fines, judgments

and amounts paid in settlement, actually incurred by any such

Member in connection with such action, suit or proceeding) by virtue

of its status as Members or with respect to any action or omission

taken or suffered in good faith, other than liabilities and losses

resulting from the gross negligence or willful misconduct of such

Member; provided, however, that any such Member shall not be so

indemnified for any acts determined to be in contravention of this

Agreement or in breach of its fiduciary duties. The indemnification

provided by this paragraph shall be recoverable only out of the assets

of the Company, and no Member shall have any personal liability on

account thereof.

41. Section 8 of the 2015 Operating Agreement, titled Consent of Members,

requires the "affirmative prior written unanimous consent of the Members of theCompany"

for

various actions, "which consent shall not be unreasonably withheld, delayed orconditioned"

(2015 Operating Agreement ¶ 8 at pgs. 5-6).

B. Managing Members

(i) 555 Shore Road Corp.

(appointed @ 3/4/98, dissolved 12/26/01)

42. WWW's initial Managing Member was 555 Shore Road Corp. (as reflected in

WWW's March 1998 Amended Articles of Organization and Operating Agreement). j

43. 555 Shore Road Corp. was dissolved by proclamation and its authority annulled

by New York State on December 26, 2001 (NYSCEF Doc. 105).

44. Nonetheless, not until letter dated March 28, 2008, to WWW, did 555 Shore

Road Corp. purport to resign as WWW's managing member "effectiveimmediately"

BORAH, (WWW004498). (NYSCEF Doc. 100). The letter was signed solely by Leon Weinstein asGOLDSTEIN,

ALTSCHULER,NAHINS & President of 555 Shore Road Corp.

GOIDEL, P.C.377 BROADWAYNY, NY 10013-3993

(212) 431-1300

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(ii) 553 Shore Road Corp.

(scr:inted 4/2/08. dissolved 10/26/11)

45. Virtually simultaneously, on March 26, 2008, 553 Shore Road Corp. was

formed under the laws of New York State (NYSCEF Doc. 106).

46. By Consent of Members of WWW dated April 2, 2008 (WWW004499-4500), a

financing of the property not to exceed $6 million was authorized, and 553 Shore Road Corp.

was appointed as WWW's Managing Member, with a 1% interest in WWW (NYSCEF

Doc.101).

47. The Consent was signed by only Leon and Kenneth Weinstein as members of

WWW and Leon and Kenneth Weinstein as President and Vice President of Managing Member

553 Shore Road Corp.

48. Jeffrey Weinstein did not sign the Consent and there is no indicated place within

it for him to sign.

49. Upon information and belief, 553 Shore Road Corp. had no Independent

Director, as required by Section 17 of the WWW Operating Agreement.

50. 553 Shore Road Corp. was dissolved by proclamation and its authority annulled

by New York State on October 26, 2011 (NYSCEF Doc. 106).

51. By letter dated January 29, 2013, to WWW, 553 Shore Road Corp. purported to

resign as WWW's managing member "effectiveimmediately"

(WWW005187). The letter was

signed solely by Leon Weinstein as President of 553 Shore Road Corp. (NYSCEF Doc. 102).

BORAH, 52. Leon Weinstein as President of 553 Shore Road Corp. also signed anGoLDSTEIN,

ALTSCHULER,NAHINS & Assignment of Membership Certificate dated January 29, 2013 (DEF 0019), stating for value

GOlDEL, P.C.377 BROADWAYNY, NY 10013-3993

(212) 431-1300

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received, selling, assigning and transferring its one membership unit representing its

membership interest in WWW to Bale Corp. (NYSCEF Doc. 103).

(iii) Bale Corn. (anpointed 1/29/13]

53. Bale Corp. had been formed under the laws of New York State on January 25,

2013. (NYSCEF Doc. 107).

54. Upon information and belief, Leon Weinstein is Bale Corp.'s President, and

Kenneth Weinstein is its Secretary and Treasurer.

55. Pursuant to a Consent of Members of WWW dated January 29, 2013 (DEF

0017-0018 (NYSCEF Doc. 104)), a financing of the property not to exceed $10.2 million was

purportedly authorized, and Bale Corp. was appointed WWW's Managing Member, having a

1% interest in WWW.

56. The Consent was signed by only Leon and Kenneth Weinstein as members of

WWW and Leon and Kenneth Weinstein as Bale Corp 's President and Secretary/Treasurer.

57. Jeffrey Weinstein did not sign this Consent and there is no indicated place

within it for him to sign.

58. Upon information and belief, Bale Corp. has had no valid Independent Director,

as required by Section 17 of the WWW Operating Agreement.

(iv) Managing Member Information Harbored from Plaintiff

59. Plaintiff had not been informed of and did not learn of 555 Shore Road Corp.'s

dissolution until after this lawsuit began.BORAH,

cu?"

60. Plaintiff had not been offered the opportunity to consent, nor did he, to 555

NAHINS &

37 BROAD AO e Oa O CS g aS a e e O , aS provided for in section 11 of WWW's

NY, NY 10013-3993

(212) 431-1300Operating Agreement.

16



16 of 49

61. Plaintiff had not been informed and did not learn of 553 Shore Road Corp.'s

existence, its role and ownership interest in WWW, and its dissolution until after this lawsuit

began.

62. Nor had plaintiff been offered the opportunity to consent, nor did he, to 553

Shore Road Corp. resigning as a member of WWW, as provided for in section 11 of WWW's

I Operating Agreement.

63. Plaintiff had not been informed and did not learn of Bale Corp 's existence and

its role and ownership interest in WWW until after this lawsuit began.

(v) The Individüal Defendants as De Facto Managing Members

64. Leon Weinstein has controlled and participated in WWW's management as de

facto managing member, including during periods when there was no managing member entity

in existence.

65. No managing member of WWW existed during the periods December 26, 2001

through April 2, 2008, and October 26, 2011 through January 29, 2013.

66. Kenneth Weinstein has participated in WWW's management, upon information

and belief at Leon Weinstein's control and behest.

67. Plaintiff's verified complaint, filed July 31, 2014, asserts in part that "Leon

Weinstein is the managing member of theLLC" (NYSCEF Doc. 1 at ¶ 7).

68. In the Verified Answer, the then defendants (all but Bale Corp.) "[a]dmit that

LEON WEINSTEIN is the Managing Member of theLLC" (NYSCEF Doc. 4 at ¶ 7).

BORAH,

Â°r cuuÎ 69. Under the Operating Agreements, the managing member must own at least 1%NAHINS &

3ßÿ oa;of the company (Operating Agreement § 5(b); Amended & Restated Operating Agreement

NY, NY 10013-3993

(212) 431-1300§ 5(b)).



17 of 49

70. The tax Form K-1s issued by WWW for the years 2008 through and including

2015 (obtained through discovery), also do not list any managing member, but recite that

WWW is owned 100% cumulatively by Leon Weinstein (50%), Jeffrey Weinstein (25%), and

Kenneth Weinstein (25%) (NYSCEF Doc. 108).9

71. Leon Weinstein also admitted at his deposition that he was the managing

member with a 50% interest (LW 5/13/16 EBT at 9-10), never mentioning any other managing

member. (NYSCEF Doc. 166).

72. He also admitted at his deposition that he supervises everyone at the business:

"I supervise everybody, even in 2016 at 92 yearsold" (LW 10/20/16 EBT at 262:5-:6)

(NYSCEF Doc. 168).

C. Lack of Governance Formalities

73, WWW has operated with an almost complete lack of governance formalities,

except to the extent and only when required by outside parties, such as bank lenders.

74. WWW maintained no minute books ((10/6/16 LW EBT at 188) (NYSCEF Doc.

167).

75. WWW held no meetings of members (10/6/16 LW EBT at 189) (NYSCEF Doc.

168).

76. WWW has produced no membership ledgers.

77. WWW's assets were commingled with those of its parent and affiliates, contrary

to its Amended Articles of Organization ¶ 9(4).BORAH,

GOLDSTEIN, -

ALTSCHULER, 9 WWW Forms K-1 for 2008 (WWW003786, WWW003788, WWW003790), 2009

GO D L P.C. (WWW003830, WWW003832, WWW003834), 2010 (WWW003848, WWW003850,377 BROADWAY WWW003952), 2011 (WWW003868, WWW003870, WWW003872), 2012 (WWW003889,

3 30993WWW003892, WWW003895), 2013 (WWW003907, WWW003910, WWW003913).

Defendant produced 2014 and 2015 tax returns without control page-stamps.

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78. WWW failed to maintain an arm's length relationship with any parent or

affiliate, contrary to its Amended Articles of Organization ¶ 9(8) and Section 16(a)(vii) of its

Operating Agreement.

79. The members of WWW, including the individual defendants and Bale Corp.,

failed to conduct the affairs of WWW in the best interests of WWW and its members, including

use of WWW funds and assets for the exclusive benefit of WWW, contrary to Section 7(c) of

the Operating Agreement.

80. Leon and Kenneth Weinstein are responsible for these breaches of duties,

including by their failure to avoid conflicts of interest.

81. Such conduct by Leon and Kenneth Weinstein constituted gross negligence

and/or willful misconduct.

II. WWW's REAL ESTATE ASSETS ANDPLAINTIFF'S ATTEMPTS FOR TRANSPARENCY

A. The Somers New Jersey Apartment Comolex

82. From its inception, and at the time this litigation was filed, WWW owned,

directly and/or indirectly, a garden apartment complex in Somers Point, New Jersey.

83. The garden apartment complex consisted of 202 apartment units, previously

known as Atlantis Apartments ("Somers Atlantis Property").

84. Until its sale in November 2014, Somers Atlantis was WWW's sole asset.

B. Plaintiff's Formal Attemots for WWW Information

BORAH' 85. Each year plaintiff would be provided by WWW a Form K-1 showing gain orGOLDSTEIN,

ALTSCHULER,NAHINS & loss for his own share interest, but no other information, and no payment of dividends or

GOlDEL, P.C.377 BROADWAYNY, NY 10013-3993 monetary distributions.

(212) 431-1300. .

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86. On October 26, 2012, plaintiff's counsel, David R. Brody, Esq. wrote to

WWW's counsel Matthew Dollinger, Esq. (NYSCEF Doc. 92, stating:

This letter is sent as a follow-up to our discussion of last week.

As stated, Jeffrey Weinstein has asked me to protect and have

oversight of his interests with respect to W.W.W. Associates,

including the possible sale of this property.

In this context, you had told me that an additional two weeks

(approximately) of due diligence time had been given to the potential

buyer. My inquiry at this time is what, if anything, has happened

with that due diligence and what, if anything, is happening with the

prospects of the sale of the property?

As per our conversation, please keep me informed of all

developments including but not limited to intended closing dates.

87. In response, Mr. Dollinger sent a fax to Mr. Brody (NYSCEF Doc. 93) stating:

I write in response to your letter of October 26, 2012 relating to the

above matter.

I am advised there have been discussions with the prospective buyer

over the past few weeks.

The principal is to meet in New York with Kenneth Weinstein in an

effort to try to finalize a deal or to terminate the Contract.

I will keep you advised of the results of that meeting as soon as I am

advised.

88. Subsequently, attempts were made for access to WWW's books and records,

and promises were made by WWW's counsel that such access would be provided by WWW's

accountants to Jeffrey Weinstein's accountants. But when Jeffrey Weinstein's accountants

ORAH SOught such access, they were rebuffed and access was denied on the basis of lack of authority

ALTSCHULER,NAHINS & frOm WWW.


(212) 431-1300



20 of 49

89. On June 27, 2014, Mr. Brody again wrote to Mr. Dollinger (by letter misdated

June 27, 2012 (NYSCEF Doc. 94)), stating:

I am writing you because notwithstanding our prior conversations,

when my client's accountant, Stephen Ferraro, requested access to

review the W.W.W. Associates files which the LLC's accountant is

holding, he was told that he needed permission from the owners. I

had thought that permission was already granted and that there

would be no issue.

I am reaching out to you and asking you to clear the way for myaccountant and to make access to the financial document review as

easy as is possible. In this context, if you think it will take anyamount of time to obtain your client's permission for us to review

documents that are, in actuality, also my client's, I would request that

you also agree to a standstill with respect to any applicable statutes

of limitations concerning the accounting and any other claims that

may exist.

90. Access and information was still not provided.

C. WWW's Secret Contract to Sell the Somers Atlantis Pronerty

91. On August 24, 2014, while this litigation was pending, WWW entered into a

contract to sell the Sommers Atlantis Property.

|| 92. WWW's transactional counsel for the sale was the same attorney then defending

this litigation (Matthew Dollinger, Esq. of Dollinter Gonski & Grossman), and the same

attorney with whom plaintiff's counsel had spoken and corresponded concerning keeping

plaintiff advised of developments in any impending sale and any closing date.

93. At the time, neither plaintiff nor his counsel were informed of this contract to

sell WWW's sole asset.BORAH,

Â°r c u , 94. Even when the parties appeared before the court before Law Clerk Michael J.

NAHINS &

37 ROAD A an , Esq. for a status conference on September 16, 2014, and discussed the case and

NY, NY 10013-3993 I(212) 431-1300

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underlying situation in detail, including that its principal asset was the New Jersey apartment

complex, neither the court nor plaintiff was informed of the impending sale.

95. In the meantime, on August 20, 2014, plaintiff's counsel serveddefendants'

counsel with Plaintiff's First Request for Production of Documents (NYSCEF Doc. 161),

pursuant to CPLR 3120 and Commercial Division Rule 11, demanding responsive documents

by September 10, 2014. Among the documents requested were: "All documents concerning

the Atlantis Apartments"; "All documents concerning any efforts to market or sell the Atlantis

Apartments"; and "All documents relating to any offers to purchase or expressions of interest in

purchasing interests in the LLC and/or the AtlantisApartments"

(Request ¶¶ 8-10). Defendants

served no timely objections to the request.

96. September 10, 2014, came and went, and without objecting to the request,

defendants still failed to inform plaintiff or his counsel of the impending sale, or produce any

documents. Defendants produced certain documents by letter dated September 26, 2014,

delivered by Fed-Ex, but none concerning or revealing the impending sale (NYSCEF Doc.

162).

97. Instead the defendants waited until November 12, 2014, just before a court

compliance conference held that day, to inform plaintiff through his counsel that the property

was being sold and that a closing was scheduled TWO DAYS HENCE, on November 14, 2014,

and that plaintiff's signatures would be required -affording plaintiff less than two

days'notice

to review all the paperwork and terms, including of the transaction, mortgage, loans, and

BORAH,

Â°Êc governance documents and attempt to determine the implications, including financial and tax,

NAHINS &

37 BROADOf Same of a transaction that had been contracted into since August 2014 and planned before

NY, NY 10013-3993

(212) 431-1300

22



22 of 49

then (see 11/18/14 Letter of Brian D. Graifman Esq. to Court, NYSCEF Doc. 10) (NYSCEF

Doc. 163).

98. WWW's sale of the Somers Atlantis Property closed on November 25, 2014.

99. The sale was planned and made with the expectation that it would be one leg of

a 1030 tax-deferred exchange, and that qualified properties would be purchased to defer or

minimize the tax effect of the sale.

D. WWW's New York Properties Obtained in

2015 & Late Pronerty Mañagement Reports

100. As part of a 1030 tax deferred exchange, WWW purchased two commercial

buildings in Long Island.

101. It purchased 875 Old Country Road, Plainview, New York, on May 12, 2015

(the "Plainview Property").

102. It purchased 480 Forest Avenue, Locust Valley, New York, on May 21, 2015

(the "Locust Valley Property").

103. WWW presently owns and maintains those two commercial properties.

104. Since the purchases, the properties have been managed by Leba, Inc., upon

information and belief a company owned and controlled by Leon and Kenneth Weinstein.

105. The property management agreements dated May 12, 2015 (NYSCEF Doc.

109), and May 21, 2015 (NYSCEF Doc. 110), require delivery of monthly, quarterly, and

annual directly to Jeffrey Weinstein:

BORAH, 2.4.2. Monthly, Quarterly and Annual Statements. Manager shall prepare

A c and remit to Owner monthly and quarterly statements showing in detail all

NAHlNS & receipts and disbursements for the respective periods and an annual

37 ROADStatement summarizing receipts and disbursements of the preceding calendar

NY, NY 10013-3993 year or portion thereof. Manager shall remit monthly and quarterly, along(212) 431-1300 with such statements, copies of all receipted bills. Copies of all reports,

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certified by the Manager as to the accuracy of the contents thereof shall be

sent certified mail, return receipt requested, postage prepaid to [JeffreyWeinstein home with copy to him at work address].

106. Despite this requirement, reports for various periods have not been delivered to

Jeffrey Weinstein or his counsel more than two years after the monthly period, and various

reports were delivered approximately a year or more after the end of the months reported.

107. When Jeffrey Weinstein noted such delays at his deposition,defendants' long-

time counsel Matthew Dollinger stated "if there is a week or two of delay, I can understandit,"

and otherwise said he would speak with Kenneth (5/11/16 JW EBT at 50-51) (NYSCEF Doc.

170). Instead, the omissions and delays worsened.

III. IMPROPER DIVERSION OF WWW FUNDS

108. One way in which the defendants facilitated diversion of funds from WWW was

to convert equity to cash through periodic multi-million dollar mortgage refinancings of the

Somers Atlantis property.

A. Refinancing Diversions

(i) The 2008 Banco PopularMortgage Refinancing

109. On April 2, 2008, WWW refinanced the Somers Atlantis property with a

$6,000,000 loan from Banco Popular North America (WWW004225, et seq.). (NYSCEF Doc.

112).

110. After satisfying a prior loan and closing costs, WWW netted $972,978.14

(WWW004227).BORAH,



377 BROADWAY jNY, NY 10013-3993

(212) 431-1300

24



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111. The $972,978.14 was deposited that day into WWW's Banco Popular checking

account ending 2412 (WWW bank statement at WWW002162; WWW General Ledger at

WWW000488) (NYSCEF Doc. 113).10

112. Among other amounts, $298,000 was then transferred from that account to

Banle Associates on April 3, 2008 (WWW bank statement at WWW002163, WWW GL at

WWW00487 (NYSCEF Doc. 114)); and $257,600 was paid from the account to Leon

Weinstein on April 7, 2008 by check # 10709 (WWW BSM at WWW002163; check at

WWW002173-2174; WWW GL at WWW000487 (NYSCEF Doc. 115)).

113. Upon information and belief, Banle Associates is an entity controlled by Leon

Weinstein, which (he testified) previously owned the building at 163-03 Horace Harding

Expressway, a property thereafter owned by another of his entities, Banled (LW 5/13/16 EBT

at 25).

114. Two additional transfers were made from the WWW bank account ending in

2412 to Banle Associates, totaling $120,000: $20,000 on January 23, 2009 (WWW BSM at

WWW002351; WWW GL at WWW000492 & WWW000522 (NYSCEF Doc. 116)), and

$100,000 on October 12, 2010 (WWW BSM at WWWW002559; WWW GL at WWW000503

& WWW000523 (listed as 10/22/10) (NYSCEF Doc. 117)).

115. Upon information and belief, Leon Weinstein reviewed and wrote his initials by

hand on the WWW April 2008 bank statement reflecting these $298,000 transfer to Banle

Associates and the $257,600 payment to Leon Weinstein (WWW BSM at WWW002162-2166;

c u ea, 10/20/16 LW EBT at 243 (NYSCEF Doc. 118)).



(212) 431-130010 Bank statement is hereafter abbreviated as "BSM"; General Ledger as "GL".

25



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116. Upon information and belief, Kenneth Weinstein reviewed and wrote his initials

by hand on the WWW bank statements reflecting the $20,000 and $100,000 debits to Banle

Associates (WWW BSMs at WWW002351 & WWWW002559 (NTSCEF Doc. 119)).

(ii) The 2010 Banco Popular Mortgage Refinancing

117. On October 15, 2010, WWW refinanced the Somers Atlantis property with a

$2,200,000 loan from Banco Popular North America (WWW004658, et seq.) (NYSCEF Doc.

120).

118. After closing costs, WWW netted $2,074,266.30, plus a credit of $2,500,

totaling $2,076,766.30 (WWW004660).

119. The $2,076,766.30 (separate credits of $2,074,266.30 and $2,500.00) was

deposited that day into WWW's Banco Popular checking account ending 2412 (WWW BSM at

WWW002559; WWW General Ledger at WWW000503) (NYSCEF Doc. 121).

120. On October 18, 2010, $2,000,030 was wired out of the WWW bank account

(WWW BSM at WWW002559) with $2,000,000 of that amount in WWW's general ledger

credited to Banle BW Equity (WWW GL at WWW000503 & WWW000525) (NYSCEF Doc.

122).

121. The WWW bank statement produced in discovery contains handwritten

notations next to the $2,000,000 debit memo, stating "Directly to TD Bank to pay off equity",

"BW LW 237"and "To pay off TD 237 equity

line"(WWW002559).

122. Upon information and belief, this amount was used to pay off an obligation ofBORAH, .

c u Banle Associates unrelated to WWW.NAHINS &

37 BROAD ANY, NY 10013-3993

(212) 431-1300 (WWW BSM at WWW002559), credited to Banle Associates (WWW GL at WWW000503 &

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WWW000523 (both referenced as "loan")). The description on the WWW bank statement

attributes these outgoing funds to the WWW refinancing, stating (among other things) "BAL $

ON RE-FINANC" (WWW BSM at WWW002559) (NYSCEF Doc. 123).

124. On October 29, 2010, $210,791 was transferred from WWW's bank account to

Metropolitan's bank account ending in 2305 (WWW BSM at WWW002560; Metropolitan

BSM at Metro001094) (NYSCEF Doc. 124).

125. On November 1, 2010, $190,000 was transferred from the Metropolitan bank

account to Banle (Metropolitan BSM at Metro001101 (including handwritten entry with arrow

to the debit stating "out 190000 Banle"); Metropolitan GL at Metro000031 & Metro000097

(under account ID Due To/From Banled starting at Metro000096)) (NYSCEF Doc. 125).

126. On November 2, 2010, $14,590.65 was electronically remitted to American

Express out of the Metropolitan bank account (Metropolitan BSM at Metro001102). That

entry reflects on Metropolitan's general ledger at Metro000031 and Metro000102, the latter

attributing the payment to "Due to/From L & B Weinstein" (Metro000101- Metro000102)

(NYSCEF Doc. 126).

127. Next to the $14,590.65 debit on the bank statement (produced by defendants) is

a handwritten entry "OK RW&KW"(Metro001102), the same initials Rena Walsh (defendants

and Metropolitan's bookkeeper) and Kenneth Weinstein. Upon information and belief, as this

reflects, Kenneth Weinstein approved the transaction.

128. Upon information and belief, Kenneth Weinstein reviewed and wrote his initialsBORAH,

A CHUL by hand on the WWW bank statements reflecting the $2,000,030 wired to Banle BW Equity,NAHINS &

37 ROÃD the $74,266.30 to Banle Associates, and the $210,791 to Metropolitan (WWW BSMs at

NY, NY 10013-3993(212M31-1300

WWW002559-WWW002260) (NYSCEF Doc. 127).

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129. Upon information and belief, Kenneth Weinstein also reviewed and wrote his

initials by hand on the Metropolitan bank statements reflecting the $190,000 to Banle, and the

$14,590.65 to Americañ Express for L & B Weinstein (Metropolitan BSM at Metro001101-

Metro001102) (NYSCEF Doc. 128).

(iii) The 2013 Arbor Mortgage Refinancing

130. On February 13, 2013, WWW refinanced the Somers Atlantis property with a

$9,459,300 loan from Arbor Commercial Funding, LLC (WWW005095, et seq.) (NYSCEF

Doc. 129)."

131. Following payoffs of the prior loans and costs, the refinancing netted WWW

$1,557,003.22 (WWW005098 (closing statement list of disbursements); WWW005103) (email

confirming wire transfers)).

132. The $1,557,003.27 was deposited that day into WWW's People's United Bank

checking account ending 3730 (WWW BSM at WWW001898; WWW GL at WWW000919)

(NYSCEF Doc. 130).

133. On February 14, 2013, $1,500,000 transferred from WWW's People's United

Bank account ending 3730 (WWW BSM at WWW001899) into, and opened, WWW's new

People's United Bank Premier Business Money Market account ending in 5879 (WWW BSM

at WWW001862) (WWW GL at WWW000919 & WWW000925) (NYSCEF Doc. 131).

134. On February 19, 2013, $25,000 transferred from WWW's People United Bank

account ending 3730 (WWW BSM at WWW001899) to Metropolitan's People's United BankBORAH,



377 BROADWAY -

2 30011 The closing date is mis-titled on the Closing Statement as February 13, 2012

(WWW005096). The correct year is 2013.

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Checking account ending 3729 (Metropolitan BSM at Metro000465) (WWW GL at

WWW000919) (NYSCEF Doc. 132).12

135. On February 25, 2013, $20,000 transferred from WWW's People United Bank

account ending 3730 (WWW BSM at WWW001899) to Banled Associates (Banled account

number ending 3726 per WWW BSM at WWW001899) (WWW GL at WWW000919)

(NYSCEF Doc. 133).

136. Upon information and belief, Banled is Banied Associates, LLC, a New York

limited liability company.

137. A number of transfers were made from WWW's new People's United Bank

Premier Business Money Market account ending in 5879 (the account infused with the initial

transfer of $1,500,000).

138. On March 18, 2013, $500,000 was transferred out of that new WWW account

(Bank Subpoena Responses 1/4/2016 pg. 52 of 375), attributed on WWW's general ledger as

$250,000 for Leon Weinstein and $250,000 for Barbara Weinstein (WWW000925)

(NYSCEF Doc. 134).

139. That same day, another $500,000 was transferred out of the new WWW account

(Bank Subpoena Responses 1/4/2016 pg. 52 of 375) to LBK Money Market (WWW GL at

WWW000925) (NYSCEF Doc.134).

140. On March 20, 2013, $297,000 was transferred out of the new WWW account

(Bank Subpoena Responses 1/4/2016 pg. 52 of 375) to Banle Asseciates (WWW GL atBORAH,

Êt°r cuu e"i WWW000925) (NYSCEF Doc. 134).

NAH1NS &GOIDEL, P.C.

377BROADWAY

2o0993 '2 Upon information and belief, this transfer does not reflect in Metropolitan's general

ledger (Metro000001-Metro000347).

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141. On March 20, 2013, $168,255 was transferred from the new WWW account

(Bank Subpoena Responses 1/4/2016 pg. 52 of 375) to Barbara Weinstein (WWW GL at

WWW000926) (NYSCEF Doc. 135).

142. On March 20, 2013, $27,745 was transferred from the new WWW account

(Bank Subpoena Responses 1/4/2016 pg. 52 of 375) to the Metropolitan People's United Bank

checking account ending in 3729 (Metropolitan BSM at Metro000468) (WWW GL at

WWW000925; Metropolitan GL at Metro000058 & Metro000091) (NYSCEF Doc. 136).

143. On that same day $7,000 was transferred from the new WWW account (Bank

Subpoena Responses 1/4/2016 pg. 52 of 375) to Leon Weinstein (WWW GL at

WWW000926) (NYSCEF Doc. 135).

144. On March 20, 2013, $250,000 was transferred into the new WWW People's

United Bank account ending in 5879 (Bank Subpoena Responses 1/4/2016 pg. 52 of 375) from

LBK Money Market and/or BW Money Market (WWW GL at WWW000925 (listed as from

BW Money Market)). These funds were subsequently transferred to Leon Weinstein and Leba,

Inc. as follows: $100,000 to Leon Weinstein on April 9, 2013 (WWW BSM at WWW001864,

WWW GL at WWW000926); $50,000 to Leon Weinstein on April 23, 2013 (WWW BSM at

j WWW001864, WWW GL at WWW000926); and $100,000 to Leba, Inc. on May 22, 2013

(WWW BSM at WWW001866, WWW GL at WWW000926) (NYSCEF Doc. 137).

145. In the meantime, of the $25,000 transferred to the Metropolitan People's United

Bank checking account ending in 3729 on February 19, 2013 (supra), $15,000 was transferredBORAH,

Â°Êc u to an account ending in 3723 (Metropolitan BSM at Metro000465), reflected in Metropolitan's

NAHINS &

37 BROA ACCOrds as a loan to Bargil (Metropolitan GL at Metro000056 & Metro000082) (NYSCEF Doc.

NY, NY 10013-3993

(212) 431-1300 138).

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146. Bargil, upon information and belief, is Bargil Associates LLC, a New York

limited liability company.

147. Bargil is owned by Leon and Kenneth Weinstein (LW 5/13/16 EBT at 164-65).

148. Bargil owns a shopping center in Myrtle Beach, South Carolina (LW 5/13/16

EBT at 164-65).

149. Of the $27,745 transferred to the Metropolitan People's United Bank checking

account ending in 3729 on March 20, 2013 (supra), $25,679 was electronically paid to

American Express that day (Metropolitan BSM at Metro000468, Metropolitan GL at

Metro000057), increasing the amount L & B Weinstein owed to Metropolitan (Metropolitan

GL at Metro000104) (NYSCEF Doc. 139).

150. Upon information and belief, Kenneth Weinstein reviewed and wrote his initials

by hand on at least one page of the WWW bank statements reflecting the transfers out of

WWW resulting from the 2013 Arbor Mortgage refmancing referenced above, including the

$25,000 to Metropolitan, $20,000 to Banled Associates, $500,000 for Leon and Barbara

Weinstein, $297,000 to Banle Associates, $168,255 to Barbara Weinstein, $27,745 to

Metropalitañ, $7,000 to Leon Weinstein, $100,000 to Leon Weinstein, $50,000 to Leon

Weinstein, and $100,000 to Leba, Inc. (WWW BSMs at WWW001898-WWW001899,

WWW001862-WWW001865) (NYSCEF Doc. 140).

151. WWW's production of bank statements omitted the first page of its March 31,

2013 statement for the People's United Bank account ending in 5879 (WWW001862-

BORAH,Â°

c WWW001863 (NYSCEF Doc. 147)). That page would reflect the following debits discussed

NAHINS &

37 BROÀ ANY, NY 10013-3993

(212) 431-1300(a) $500,000 to Leon and Barbara Weinstein ($250,000 each);

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(b) $500,000 to LBK Money Market;

(c) $297,000 to Banle Associates;

(d) $168,255 to Barbara Weinstein;

(e) $27,745 to Metropolitan; and

(d) $7,000 to Leon Weinstein. (NYSCEF Doc. 141).

152. Plaintiff was instead forced to subpoena the banks directly and obtain (among

other things) an electronic version of this missing page (Bank Subpoena Responses 1/4/2016

pg. 52 of 375) (NYSCEF Doc. 148).

153. Various of WWW's bank statements as kept in WWW's ordinary course of

business include hand-written notations bearing on and explaining transactions.

154. Plaintiff has been deprived of that additional source of information in the

missing page.

155. Upon information and belief, no interest was charged or paid on any loans made,

directly or indirectly, with WWW funds.

156. Notwithstanding that Leon Weinstein has testified as to the existence of loans to

affiliated persons and entities to justify the taking of funds, and certain WWW financial

documents reflect after-the-fact accounting of fund transfers as loans, defendants have

produced no such loan documents setting forth the existence and terms of such loans.

B. "Ordinary" Course Funds Diversions

(i) Diversions Directly From WWWBORAH,

GOLDSTElNALTSCHULE 157. Diversion of funds from WWW occurred not only from refinancing funds, but

NAHINS &

37 POAD Out of what would have been business profits.

NY, NY 10013-3993

(212) 431-1300

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158. An accountant's spreadsheet of WWW Intercompany Balances 2005-2012

reflects that Banled owed WWW $485,395 as of the end of 2012, an amount and debt not

reflected in the prior years (WWW005511) (NYSCEF Doc. 111).

159. Upon information and belief, Banled is owned by Leon Weinstein, either alone

or with his wife (LW 10/6/16 EBT at 211-15).

160. Upon information and belief, Banled owned a building on Horace Harding

Boulevard (LW 10/6/16 EBT at 211-12).

161. When asked at his deposition if Banled received actual monies from WWW for

that loan, Leon Weinstein responded "I can't tell you thatanswer" (LW 10/6/16 EBT at

215:18).

162. Upon information and belief, the amount due to WWW by Banled remains

outstanding.


reflects that LBKC owed WWW $200,000 as of the end of 2012, an amount and debt not

reflected in the prior years (WWW005511) (NYSCEF Doc. 111).

164. Upon information and belief, LBKC is LBKC Associates, LLC, a New York

limited liability compañy, a company used by Leon Weinstein and owned by, and the initials

standing for, Leon, Barbara, Kenneth, and Candee (a/k/a Candi) Weinstein (Leon and Barbara

Weinstein's daughter and Jeffrey and Kenneth Weinstein's sister) (5/13/16 LW EBT at 236-

BORAH,GOLDSTEIN

ALTSCHULER, 165. Upon information and belief, the amount due from LBKC remains outstanding.NAHINS &


(212) 431-1300



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reflects that Straw Market owed WWW $91,171 as of the end of 2012, an amount and debt

not reflected in the prior years (WWW005511) (NYSCEF Doc. 111).

167. Upon information and belief, Straw Market is an entity owned (in whole or part)

and controlled by Leon Weinstein and owns a shopping center in Myrtle Beach, South Carolina

(10/20/16 LW EBT at 233-35).

168. Upon information and belief, the amount due by Straw Market remains

outstanding.


reflects that Bacan owed WWW $6,571 between the end of 2005 and end of 2012

(WWW005511) (NYSCEF Doc. 111).

170. Upon information and belief, Bacan is an entity owned Leon and Barbara

Weinstein (5/13/16 LW EBT at 171; 10/20/16 LW EBT at 232-33).

171. Upon information and belief, the amount due by Bacan remains outstanding.

(ii) Diversions from WWW to and through Metropolitan

(a) Personal Expenses

172. Diversion of WWW funds were made through Metropolitan, which operated

until the end of 2013 and acted as a clearinghouse enabling comingling funds of various other

businesses owned and controlled (including with other family members) by Leon Weinstein

(5/13/16 LW EBT at 135-36), including businesses in which Jeffrey Weinstein has noBORAH,

GOLDSTEINALTSCHlJLER, OWnership or involvement (id at 63-64). Leon Weinstein testified that services for various of

NAHINS &

37 3RO D his entities "ran thoughMetropolitan"

(id at 136).

NY, NY 10013-3993

(212) 431-1300

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173. During his deposition, Leon Weinstein stated that had he known of this lawsuit

he would not have done it that way (5/13/16 LW EBT at 152-153).

|| 174. WWW's accountant's spreadsheet of Intercompany Balances reflected that as of

the close of 2012, Metrapõlitañ owed WWW $1,002,564 ($242,798 + $134,766 + $625,000) j

(WWW005511) (NYSCEF Doc. 111).

175. From 2008 through 2013, Metropolitan paid Leon Weinstein's auto expenses

for his 2007 Bentley and later his 2013 Bentley (Metro000181-Metro000184; 5/13/16 LW

EBT at 53-56) (NYSCEF Doc. 152).

176. From 2008 through 2013, Metropolitan paid auto expenses for Kenneth

Weinstein's Porsche (Metro000184-Metro000187; 5/13/16 LW EBT at 62-63) (NYSCEF

Doc. 153).

177. These automobiles, the Bentleys and a Porsche, are overly extravagant vehicles

for businesses such as WWW and/or Metropolitan.

178. WWW and Metropolitan have not paid distributions or dividends to their owners

during the relevant period.

179. During this period, Metropolitan was also paying expenses for Leon

Weinstein's boat, including marina, mortgage, and insurance (Metro000193-196; 5/13/16 LW

EBT at 129-132) (NYSCEF Doc. 154).

180. The properties owned by WWW are landlocked, and are not adjacent or near to

any navigable body of water.BORAH,

GOLDSTElNALTSCHULER, 181. The Somers Atlantis Property previously owned in New Jersey was also

NAHINS &

37 3 landmarked and not adjacent to any navigable body of water. Upon information and belief,

NY, NY 10013-3993

(212) 431-1300



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Leon Weinstein's boat was docked in Long Island and could not be and was not used to travel

to New Jersey.

182. Metropolitan also paid for Leon Weinstein's Florida house. (Metro000337-

Metro000338; 5/13/16 LW EBT at 158) (NYSCEF Doc. 155).

183. At his deposition, Leon Weinstein stated that this was a personal expense

(5/13/16 LW EBT at 158 ("Very clear, my money. Go ahead, next case.")).

184. Upon information and belief, Metropolitan pays for Leon and Barbara

Weinstein's cell phe-ncs (Metro000198-Metro000202; 5/13/16 LW EBT at 133-134)

(NYSCEF Doc. 156).

185. Metropolitan was also paying Candee Weinstein (a/k/a Candi) on payroll

(Metropolitan GL at Metro000265-Metro000278) (NYSCEF Doc.157).

186. As Leon Weinstein explained, "She was always able to take money, okay,

because of the services she had done for all of us many years before . .."

(5/13/16 LW EBT at

151-52).

(b) Personal American Express Charges

187. One significant way in which the Weinstein defendants depleted funds through

Metropolitan was by having it pay American Express charges on the account of Weinprop Inc.

(Leon Weinstein), including personal expenses of Leon Weinstein, Kenneth Weinstein,

Barbara Weinstein (plaintiff's mother), and Candee (aka Candi) Weinstein (plaintiff's sister).

BOPAH,GOLDSTEIN,

ALTSCHULER,NAHINS &

GOlDEL, P.C377 BROADWAYNY, NY 10013-3993

(212) 431-1300

36



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188. This was done through at least two American Express ("Amex") accounts for

Weinprop: account ending in (i) 1009, and (ii)8001.13

189. As example, personal expenses were taken for the year 2010 on the 1009

account (Metro001649-Metro001753) (NYSCEF Doc. 158), and for the year 2011 on the 8001

account (Metro001834-Metro0012016) (NYSCEF Doc. 159). Payments are reflected on

Metropolitan's General Ledger (Metro000023-000042) (NYSCEF Doc. 160).

190. Prior and subsequent years for each account show a substantially similar

transaction history and method of payment, the vast majority (if not all) of the payments being

made by Metropolitan.

(1) WeinpropInc.- Leon Weinstein

Amex Acet # -1009 for 2010

191. Amex monthly charges ending mid-January 2010 total $31,953.70

(Metro001649-001656), include personal charges for airline tickets to West Palm Beach for

Adam Weihstein (Kenneth's son) (Metro001652), women's lingerie (Metro001653), and

Kenneth's Porsche (Metro001654). These charges were paid on February 11, 2010

(Metrol 657) by Metropolitan (Metro0000023).

192. Amex monthly charges ending mid-February 2010 total $17,135.90

(Metro001657-001666), including personal charges of women's lingerie (Metro001660), Boca

Raton grocery stores (Metro001661), airliñê tickets to West Palm Beach (Metro001662),

and hotels and flights to Atlantic City (Metro001603-1604). These charges were paid on

GO S EIN,c , 2010 (Metro001667) by Metropolitan (Metro0000024).

ALTSCHULER,NAHINS &

GOIDEL, P.C.377 BROADWAY 13 Upon information and belief, Weinprop is, was meant to be, or was the de facto

3,-o30993continuation of Weinprop Inc., a New York corporation run by Leon Weinstein dissolved by

proclamation in 1999.

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193. Amex monthly charges ending mid-March 2010 total $19,990.07 (Metro001667-

001674), including personal charges of golfing equipment (Metro001670), pet supplies

(Metro001670-1671), and airliñê tickets to Salt Lake City (Metro001672). These charges

were paid on April 6, 2010 (Metro001675) by Metropolitan (Metro0000025).

194. Amex monthly charges ending mid-April 2010 total $26,397.31 (Metro001675-

1686), including personal charges of home furnishings for Leon's home in Boca Raton

(Metro001677-1678), pet supplies (Metro001679), and marina fees (Metro001680). These

charges were paid on May 18, 2010 (Metro001687) by Metropolitan (Metro0000026).

195. Amex monthly charges ending mid-May 2010 total $36,556.67 (Metro001687-

1694), including personal charges of women's lingerie (Metro001689), jewelry

(Metro001690), marina fees (Metro001692), and hotel fees in Atlantic City(Metro001692-

93). These charges were paid on June 18, 2010 (Metro001695) by Metropolitan

(Metro0000027).14

196. Amex monthly charges ending mid-July 2010 total $3,611.11 (Metro001703-

1701), including personal charges of jewelry (Metro001706), and hotels in Atlantic City

(Metro001707). These charges were paid on August 5, 2010 (Metro001713) by Metropolitan

(Metro0000028).

197. Amex monthly charges ending mid-August 2010 total $8,602.29 (Metro001711-

1717), including personal of jewelry (Metro 001714), women's cosmetics (Metro001715), and

Youthology lip emaathing treatments (Metro001715). These charges were paid on AugustBORAH,

GoLDSTEIN,ALTSCHULER,


377 BROADWAY -o30993 14 The payment is reflected on the next month's invoice (Metro001695-1702). The source

of payment of the charges for that monthly period ending mid-June 2010 is unclear.

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30, 2010 (Metro001721) by Metropolitan (Metro0000029), and authorized by Kenneth

Weinstein.15

198. Amex monthly charges ending mid-October 2010 total $12,342.03

(Metro001719-1726), including pet supplies (Metro001723), pet food (Metro001724), and

Porsche payments (Metro001725). These charges were paid in the November billing cycle by

Metropolitan, authorized by Leon Weinstein (Metro001737,Metro0000031).16

199. Amex monthly charges ending mid-November 2010 total $25,737.37

(Metro001735-1742), including personal charges of "Fountain of Youth" treatments by Dr.

Elizabett (Metro001738), and Atlantic City hotels (Metro001740). These charges were paid

on December 16, 2010, by Metropolitan, authorized by Leon Weinstein (Metro001745,

Metro0000032).

200. Amex monthly charges ending mid-December 2010 total $8,809.29

(Metro001743-001753), including personal charges of "youthology" eye treatments

(Metro001746), and airline tickets to Palm Beach (Metro001747-1749). These charges were

paid by Metropolitan (Metro0000033).

(2) Weinprop Inc. - Leon Weinstein

Amex Acet. # -8001 for 2011

201. Amex monthly charges ending mid-December 2010 (paid in 2011) total

$17,596.37 (Metro001834-1846), including personal charges of airline tickets to Palm Beach

(Metro001844-1845), "Fountain of Youth" treatments by Dr. Elizabett (Metrol 845), onlinc

GOLDS E N, dating services J-Date (Metro001845), and pet supplies (Metro001846). These charges were

ALTSCHULER,NAHINS &

GOlDEL, P.C.377 BROÅDWAY

300993 ¹5 The source of the payment for the statement ending mid-September 2010 is unclear.'6 Various of the Amex statements name the person authorizing the payments.

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paid on January 18, 2011, by Metropolitan, authorized by Leon Weinstein (Metro001849,

Metro0000033).

202. Amex monthly charges ending mid-January 2011 total $15,753.88

(Metro001847-1858), including personal charges of airline tickets to Palm Beach

(Metro001855), online dating services J-Date (Metro001857), pet supplies (Metro001857),

and pet food (Metro001858). These charges were paid on February 22, 2011, by Metropolitan,

authorized by Leon Weinstein (Metro001861, Metro0000034).

203. Amex monthly charges ending mid-February 2011 total $18,248.71 (Metrol 875-

1891), including personal charges of pet supplies (Metro001878), airline tickets to Palm

Beach (Metro001886), pet gr::ring and pet food (Metro001890-1891), and onliñc dating

services - a J-Date (Metro001890). These charges were paid on March 14, 2011, by

Metropolitan, authorized by Leon Weinstein (Metro001861, Metro000034).

204. Amex monthly charges ending mid-April 2011 total $30,223.96 (Metrol 892-

1904), including personal charges of airline tickets (Metro001896), ôñliñc dating services -

chemistry.com (Metro001899), weight loss supplements (Metro001899), travel agencies

(Metro001900), pet supplies (Metro001903), pet food (Metro001904), and online dating

services -J-Date (Metro001904). These charges were paid on May 23, 2011, by Metropolitan,


205. Amex monthly charges ending mid-May 2011 total $42,951.54 (Metro001905-

1916), including"Youthology" eye treatments (Metro001912), Atlantic City hotels

GoLDSTEIN,ALTSCHULER,

NAHINS &GOlDEL, P.C. 17 The payment is reflected on the next month's invoice (Metro001859-1874). We have

3 B A9DA33993

not established the source of payment of the charges for that month ending mid-March 2011,

(212) 431-1300 and so excluded that from our analysis.

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(Metro001914-1915), weight loss supplements (Metro001916), pet supplies (Metro001916),

enline dating services J-Date (Metro001916), and "Fountain of Youth" treatments by Dr.

Elizabett (Metro001916). These charges were paid on June 29, 2011, by Metropolitan,

!


206. Amex monthly charges ending mid-June 2011 total $31,053.25 (Metro001917-

1928), including pet supplies (Metro001925), pet food (Metro001927), and online dating

services - J-Date (Metro001928). These charges were paid on July 25 of 2011, by


207. Amex monthly charges ending mid-July 2011 total $38,067.81 (Metro001929-

1941), including jewelry charges (Metro001935), airline tickets (Metro001936-1937), pet

supphs and food (Metro001940-1941), and online dating services J-Date (Metro001940).

These charges were paid on August 18 of 2011, by Metropolitan, authorized by Leon Weinstein

(Metro001944, Metro0000039).

208. Amex monthly charges ending mid-August 2011 total $51,931.13

(Metro001942-001952), including personal charges of jewelry repair (Metro001948), marina

I fees (Metro001948), performance watercraft services (Metro001950), specialty pet supplies

(Metro001950), Porsche payments (Metro001951), pet food (Metro001952), and online

dating services J-Date (Metro001952). These charges were paid on Sept 22 of 2011, by


209. Amex monthly charges ending mid-S_eptember 2011 total $43,084.05

GOLDSTEIN,ALTSCHULER, (Metro001953-001964), including personal charges of women's lingerie (Metro001958), pet

NAHINS &

37 BROAD supplies (Metro001962), online dating services J-Date (Metro001962), and pet styling

NY, NY 10013-3993

(212) 431-1300



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services (Metro001963). These charges were paid on October 4 of 2011, by Metropolitan,


210. Amex monthly charges ending mid-October 2011 total $56,566.52

(Metro001964-001976), including personal charges of 6ñliñe dating services, chemistry.com

(Metro001971), specialty pet supplies (Metro001974), pet food (Metro001976), and online

dating services J-Date (Metro001976). These charges were paid on November 4 of 2011, by


211. Amex monthly charges ending mid-November 2011 total $71,231.10

(Metro001977-001990), including personal charges of Porsche payments (Metro001988), pet

services (Metro001990), and online dating services J-Date (Metro001990). These charges

were paid on December 21 of 2011, by Metropolitan, authorized by Leon Weinstein

(Metro002005, Metro0000042).

212. Amex monthly charges ending mid-December 2011 total $15,865.72

(Metrol991-2002), including pet services (Metro002000-2001), and online dating services J-

Date (Metro002001). These charges were paid on January of 2012, by Metropolitan, authorized

by Leon Weinstein (Metro002005, Metro0000042).

213. These charges are for personal expenses.

214. These charges have nothing to do with WWW or managing its property.

215. The American Express charges paid for by Metropolitan on these accounts,

limited to the months analyzed, was $191,136 for account ending 1009 for 2010; and $432,574BORAH,

GOLDSTEIN,ALTSCHULER, for aCCount ending 8001 for 2011.

NAHINS &

37 ROAD 216. As stated during his May 13, 2016 deposition, Leon Weinstein did not believe

NY, NY 10013-3993(212M31-1300 all payments on the American Express were business related (see Leon Weinstein 5/13/16 EBT

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at 173:17-:23). He justified using thebusiness'

funds for these personal expenses, stating in

part: "If I let her take money on American Express - - - I'm her father. So if I said go ahead and

take it, she took it. . . . (id 174).

C. The IndividüâlDefendants'

Responsibility

For Diversions and Malfeasance

217. As noted above, and upon information and belief, Leon and/or Kenneth

Weinstein review and approve each bank statement of WWW and Metropolitan, initialing

them.

218. Upon information and belief, Leon and Kenneth Weinstein are the only persons

having check signing authority for WWW (10/6/16 LW EBT at 218).

219. Upon information and belief, Leon and Kenneth Weinstein are the only persons

with check signing authority for Metropolitan.

220. During his deposition, Leon Weinstein could not explain any of these diversions

of funds from WWW.

221. During his deposition, Leon Weinstein could not explain any of the diversions

of funds from WWW through Metropolitan.

222. During his deposition, when asked about outgoing funds from WWW, and by

extension Metropolitan, Leon Weinstein periodically referenced supposed loans from him years

ago, and that the payments to his benefit was to compensate him for the loans.

223. Leon Weinstein could not state any details regarding such loans - not the date,

GOLDS ElN, amount, Or CircumStance.

ALTSCHULER,NAHINs & 224. Any accounting that might refer to such loan type shows no change or reduction

GOlDEL, P.C.377 BROADWAYNY, NY 10013-3993 OVer the years (e.g., WWW005510-WWW005511) (NYSCEF Doc. 111).(212) 431-1300

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FIRST CAUSE OF ACTION

(INSPECTION OF BOOKS & RECORDS - LLC LAW § 1102)(As Against All Defendants)

18

225. Plaintiff repeats and re-alleges the allegations of this amended and supplemental

complaint as if set forth in full herein.

226. Plaintiff has not engaged in any conduct that in equity would deny him equity.

227. Plaintiff has no adequate remedy at law.

228. Pursuant to Limited Liability Company Law § 1102, plaintiff (or his designated

agent) is entitled to inspection of WWW's books and records, including reasonable access for

the purpose of reviewing and copying, including (without limitation) governance records,

financial records, property management reports, and records reflecting monies received,

transferred and expended and obligations incurred and/or resolved from August 1, 2008 to

present.

SECOND CAUSE OF ACTION

(EQUITABLE ACCOUNTING). | (As Against the Weinstein Defcñdants and Bale Corp.)19



230. Plaintiff is entitled to an accounting of the finances of WWW, including a long-

form accounting, reflecting monies received, transferred, expended, and obligations incurred

and/or resolved, including the underlying reasons and supporting documents and/or references

to same, for the period August 1, 2008 to present, or earlier as necessary to understand

GOLDSTEINALTSCHULER, tranSaCtiOns from August 1, 2008 to date.


377 BROADWAYo30993 18 Decision at 4, 5 & n.5, 7.

19 Decision at 4, 5 & n.5, 7.

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THIRD CAUSE OF ACTION

(BREACH OF FIDUCIARY DUTY OWED TO PLAINTIFF)

(As Against the Weinstein Defendants and Bale Corp.)20



232. Each of the individual Defendants has a duty of trust and fair dealing to

Plaintiff.

233. Each of the managing members, including Bale Corp. and the individuals

managing Bale Corp., when existing and acting as such, had a duty of trust and fair dealing to

Plaintiff.

234. By the acts recited herein above the Defendants have breached their fiduciary

duties and duties of trust and fair dealing to Plaintiff.

235. As a result, Plaintiff and WWW have been damaged in an amount to be

determined at trial, but believed to be in excess of $5,000,000.00 (exclusive of punitive

damages, interests, costs, disbursements and counsel fees).

FOURTH CAUSE OF ACTION

(BREACH OF FIDUCIARY DUTY OWED TO WWW)(As Against the Weinstein Defendants and Bale Corp.)21



237. Each of the individual Defendants, as a member of WWW, has a duty of trust

and fair dealing to WWW.BoRAH,


NAHINS &GOIDEL, P.C.

377 BROADWAY -

30020 Deciaion at 4, 5 & n.5, 6, 8-9.21 Decision at 4, 5 & n.5, 6, 8-9.

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238. Each of the managing members, including Bale Corp., when existing and acting

as such, too had a duty of trust and fair dealing to Plaintiff.

239. By the acts stated herein above, the Defendants have breached their fiduciary

duties and duties of trust and fair dealing to the LLC.

240. Plaintiff brings this cause of action derivatively on behalf of WWW.

241. Any demand that might have been made to WWW to bring this action would

have been futile.

242. As a result, plaintiff has been damaged in an amount to be determined at trial,

but believed to be in excess of $5,000,000.00 (exclusive of punitive damages, interests, costs,

disbursements and counsel fees).

FIFTH CAUSE OF ACTION

(BREACH OF OPERATING AGREEMENT)(Against the Weinstein Defendants and Bale Corp.)22



244. Leon Weinstein, Kenneth Weinstein, and Bale Corp. breached the Operating

Agreement, including as amended and restated, including without limitation by failing to

(a) maintain an arm's length relationship with any parent or affiliate, in violation of Section

16(a)(vii) of the Operating Agreement; and (b) conduct the affairs of WWW in the best

interests of WWW and its members, including failing to use WWW funds and assets for the

exclusive benefit of WWW, in violation of Section 7(c) of the Operating Agreement.BORAH,

GOLDSTEINALTScHULER, 245. Those defendants are liable to plaintiff directly and to WWW, each of which has

NAHINS &

37 BRO D A een ama e in M amOud 10 be detemined at Mal, but believed to be in excess of

NY, NY 10013-3993

(212) 431-130022 Decision at 6, 8-9.

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$5,000,000.00 (exclusive of punitive damages, interests, costs, disbursements and counsel

fees).

SIXTH CAUSE OF ACTIOly(FOR APPOINTMENT OF RECEIVER)

(As Against All Defendants)23



247. Upon information and belief, property of WWW is being and is at risk of being

dissipated by the Defendants.

248. Upon information and belief, a specific fund of money or real property owned

by WWW is in danger of and is being materially injured or destroyed.

249. In order to protect Plaintiff's interest in WWW, it is necessary that a receiver be

appointed in order to carry on WWW's business and affairs.

250. Plaintiff has no adequate remedy at law.

251. Plaintiff requests that the Court appoint a receiver to carry on WWW's business

and affairs and protect its assets.!

WHEREFORE, Plaintiff, Jeffrey Weinstein, requests a Judgment:

(a) on the first cause of action, as against all defendants, granting Plaintiff, as a

member of WWW (or his designated agents) an inspection of WWW'sbooks and records, including reasonable access for the purpose of reviewingand copying, including (without limitation) governance records, financial

records, property management reports, and records reflecting monies

received, transferred and expended and obligations incurred and/or resolved

from August 1, 2008 to present;BORAH,

cH e (b) on the second cause of action, granting Plaintiff, as against Leon Weinstein,

NAH INS & Kenneth Weinstein, and Bale Corp., an accounting of the finances of

37 BROAD ANY, NY .10013-3993

(212) 431-130023 Decision at 6, 8-9.

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received, transferred, expended, and obligations incurred and/or resolved,

including the underlying reasons and supporting documents and/or

references to same, for the period August 1, 2008 to present, or earlier as

necessary to understand transactions from August 1, 2008 to date;

(c) on the third cause of action, granting Plaintiff, as against Leon Weinstein,

Kenneth Weinstein, and Bale Corp., a money judgment in favor of Plaintiff

in an amount to be determined at trial, but believed to be in excess of

$5,000,000.00 (exclusive of punitive damages, interests, costs,

disbursemei1ts and counsel fees);

(d) on the fourth cause of action, as against Leon Weinstein, Kenneth

Weinstein, and Bale Corp., ordering restitution to WWW in an amount to be

determined at trial, but believed to be in excess of $5,000,000.00 (exclusive

of punitive damages, interests, costs, disbursements and counsel fees);

(e) on the fifth cause of action, as against Leon Weinstein, Kenneth Weinstein,

and Bale Corp., damages in an amount to be determined at trial, but believed

to be in excess of $5,000,000.00 (exclusive of punitive damages, interests,

costs, disbursements and counsel fees);

(f) on the sixth cause of action, as against all defendants, appointing a receiver

to carry on WWW's business and affairs; and

(g) granting any and all relief that the Court may deem just and proper, together

with costs and disbursements of this action, together with interest.

Dated: New York, New York

August 16, 2018

BORAH, OLDS CHULER,NAHIN GOI L, .

Attorn l ti

By: )

D D B ODBRIAN . G FMAN377 Bro wNew York, ew York 10013

BORAH,GoLDSTEIN,

ALTSCHULER,NAHINS &

GolDEL, P.C.377 BROADWAYNY, NY 10013-3993

(212) 431-1300

48



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VERIFICATION

STATE OF NEW YORK }}s.s,:

COUNTY OF NEW YORK }

JEFFREY WEINSTEIN, being duly sworn, states that he is the plaintiff in this actiot

and that the foregoing amended and supplemeñtal complaint is true to his own knowledge,

except as to matters therein st ted to be alleged on information and beHef and as to those

matters he believes them to be true.

. .

By:/

Sworn to before me this

/Á day of August 2018

Aotary Public

JOANNAMAltIECOOKNOTARY PUBLIC, STATEOFNEWYORK

Tenn expinsMay29,2

BORAH,GOLD5TElN,ALTacHol,ER,

NAt$1NS&Goton.P,C,

3T7 BROADWAYNY, NY 10013-3993(212) 421-1300



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