Contract analysis

I. INTRODUCTION AND PRELIMINARY NOTES A. Witness Profile Nolan Prescott is a sixty-seven-year-old individual who holds a twenty-five percent (25%) equity interest as a Member of Coastal Palms Franchise Holdings LLC ("Coastal Palms," "CPFH," or the "Company"). Mr. Prescott is a retired commercial real estate developer whose investment in CPFH is characterized — at least nominally — as passive in nature pursuant to the

1. Establish Prescott's knowledge of Coastal Palms' revenue-reporting practices and the systematic underreporting of Gross Room Revenue to Verimark. This is the central objective of the deposition. Even if Prescott did not participate directly in the preparation of GRR reports, his receipt of quarterly financial summaries that included Suncoast revenue lines is powerful evidence that he knew — or should have known —

2. Probe the extent to which Prescott received financial reports from Brecker that reflected or disclosed Suncoast revenue streams. The November 18, 2022 supplemental production of 312,000 documents includes quarterly financial summaries emailed by Brecker to Prescott. These documents are the linchpin of our examination. Each summary contains identifiable line items for Suncoast revenue. The examining attorney should

3. Determine Prescott's awareness of the existence and purpose of Suncoast, the gulfcoastrooms.com website, and off-platform booking channels. Even if Prescott professes ignorance of the technical details of Suncoast's operations, his knowledge that Suncoast existed and generated revenue from hotel operations is sufficient to establish that he was aware of a separate revenue stream not captured in GRR reporting.

4. Identify inconsistencies between Prescott's anticipated claims of ignorance and documents already produced showing he received quarterly financial summaries that included Suncoast revenue lines. This is the impeachment dimension of the deposition. Prescott's credibility will be tested against the documentary record. The examining attorney should be prepared to present specific exhibits and ask Prescott to read lin

5. Establish Prescott's understanding of the Franchise License Agreement ("FLA") obligations, including the GRR definition, royalty requirements, and audit provisions. Even a passive investor with a 25% equity stake in a franchise holding company would be expected to have some basic understanding of the franchise relationship that generates his investment income.

6. Support the civil conspiracy count (Count X) by eliciting testimony on communications among Coastal Palms members regarding franchise-fee obligations. To sustain Count X, we must demonstrate that Prescott was, at minimum, aware of and acquiesced in the scheme to underreport GRR. His receipt of financial summaries reflecting Suncoast revenue, combined with his failure to object or inquire, supports an inference of

7. Lay groundwork for personal-guaranty and collectibility analysis by exploring Prescott's personal financial situation and knowledge of Ironclad National Bank's approximately $94 million lien position. Understanding Prescott's personal net worth, asset structure, and awareness of the Company's debt obligations is important for our damages analysis and for evaluating collection prospects in the event of a judgment.

II. BACKGROUND AND PERSONAL HISTORY A. Personal and Professional Background The examination should begin with standard background questions designed to put the witness at ease while establishing his identity, education, and professional credentials. These questions also serve the important purpose of establishing Prescott's sophistication as a businessperson, which will be relevant to the impeachment strategy outline

III. INVESTMENT IN COASTAL PALMS FRANCHISE HOLDINGS LLC A. Formation and Initial Investment This section is designed to establish the foundational facts of Prescott's investment in CPFH and to lay the groundwork for later questioning about his knowledge of the franchise relationship and revenue-reporting practices. • Timing of initial investment. Determine when Prescott first invested in CPFH. This is important to es

IV. KNOWLEDGE OF FRANCHISE LICENSE AGREEMENTS A. FLA Terms and Obligations This section is designed to establish the baseline of Prescott's knowledge regarding the contractual obligations that Coastal Palms owed to Verimark under the Franchise License Agreements. The level of detail that Prescott can recall or acknowledge is directly relevant to both the breach-of-contract counts and the civil conspiracy count. • Whe

V. RECEIPT OF FINANCIAL INFORMATION A. Quarterly Financial Summaries This is the most critical section of the deposition outline. The quarterly financial summaries emailed by Randall Brecker to Prescott represent the strongest documentary evidence that Prescott was aware of the Suncoast revenue stream. These documents were produced as part of the November 18, 2022 supplemental production, which included 312,000 docum

VI. KNOWLEDGE OF SUNCOAST ROOM MANAGEMENT INC. A. Formation and Purpose • When Prescott first became aware of Suncoast. This is a foundational question. Determine when Prescott first learned of the existence of Suncoast Room Management Inc. If he claims he was unaware, the quarterly financial summaries containing Suncoast revenue lines will be used to impeach that claim. If he acknowledges awareness, establish the da

VII. KNOWLEDGE OF REVENUE-REPORTING PRACTICES A. GRR Reporting to Verimark • Awareness of monthly reporting. Determine whether Prescott was aware that CPFH reported GRR to Verimark on a monthly basis, as required by the FLAs. • Knowledge of reported amounts. Determine whether Prescott was aware of the GRR amounts reported to Verimark for any year. For context, the reported GRR for FY 2021 was $112.4 million, while Ve

VIII. COMMUNICATIONS AMONG CPFH MEMBERS A. Member Meetings and Discussions • Frequency and mode of communication. Establish the frequency and mode of communication between Prescott and Brecker. Determine whether they communicated by phone, email, text message, in-person meetings, or some combination. Establish a general cadence — weekly, monthly, quarterly, or ad hoc. • Typical topics of discussion. Determine the top

IX. KNOWLEDGE OF PROPERTY-LEVEL OPERATIONS A. Gulf Breeze Hospitality LLC • Awareness of entity. Determine whether Prescott was aware of the existence of Gulf Breeze Hospitality LLC, a Florida limited liability company that operates 6 Verimark Suites properties in Southwest Florida, with Randall Brecker serving as Managing Member. • Ownership or role. Determine whether Prescott had any ownership interest, direct or i

X. IRONCLAD NATIONAL BANK LOAN RELATIONSHIP A. Awareness of Lending Relationship • Aggregate loan exposure. Determine whether Prescott was aware that Ironclad National Bank held first-lien mortgage loans on 18 of the 22 Coastal Palms hotel properties, with an aggregate outstanding principal balance of approximately $94 million. The magnitude of this debt is significant both for collectibility analysis and because it

XI. CIVIL CONSPIRACY ALLEGATIONS (COUNT X) A. Awareness and Participation Count X of Verimark's Amended Complaint alleges civil conspiracy among CPFH members — including Prescott — to underreport GRR in violation of the FLAs. Under Florida law, a civil conspiracy requires an agreement between two or more persons to accomplish an unlawful objective or a lawful objective by unlawful means, resulting in damages to the p