Contract analysis

I. PRELIMINARY STATEMENT This Confidential Mediation Statement is respectfully submitted on behalf of Plaintiff Jonathan R. Caldwell in connection with the mediation of his claims against Defendants Marcus D. Whitfield and Pinnacle Greystone Capital LLC (collectively, "Defendants"), scheduled to take place on December 14, 2023, before Jerome Aschkenazy, Esq. of Meridian Dispute Resolution Services LLC. At its core, t

II. THE PARTIES A. Plaintiff Jonathan R. Caldwell Jonathan R. Caldwell is an individual investor, age 58, residing at 440 East 72nd Street, Apt. 18D, New York, New York 10021. Mr. Caldwell is a seasoned real estate and asset management professional with decades of experience evaluating, structuring, and managing complex real estate investments in the New York metropolitan area. Mr. Caldwell holds a Bachelor of Scienc

III. FACTUAL BACKGROUND A. The Investment Opportunity In or about March 2021, Mr. Whitfield approached Mr. Caldwell with a co-investment opportunity to acquire and redevelop a mixed-use building located at 540-548 Atlantic Avenue, Brooklyn, New York 11217. The Property consists of a 42,000-square-foot mixed-use building situated on an approximately 0.38-acre lot in Brooklyn. The Property is zoned C6-2A, a commercial

IV. THE FOUR CATEGORIES OF FRAUD A. Concealment of $1,340,000 in Pre-Existing NYC Real Property Tax Liens At the time of the acquisition on May 14, 2021, the Property at 540-548 Atlantic Avenue was encumbered by $1,340,000 in outstanding New York City real property tax liens. These liens represented unpaid real property taxes that had accrued over a multi-year period prior to the acquisition and had been sold by the

V. PROCEDURAL HISTORY A. Pre-Litigation. Following the discovery of the fraud in August 2023, Mr. Caldwell immediately took steps to investigate the full scope of Mr. Whitfield's misconduct and to preserve his legal rights. Mr. Caldwell retained Calderwood & Harkness LLP pursuant to an engagement letter dated September 11, 2023, to investigate the claims, assess the available evidence, and pursue all available legal

VI. LEGAL ANALYSIS — STRENGTH OF PLAINTIFF'S CLAIMS A. Common-Law Fraud Under well-established New York law, the elements of a cause of action for common-law fraud are: (1) a material misrepresentation or omission of fact; (2) made with knowledge of its falsity (scienter); (3) upon which the plaintiff reasonably relied; and (4) which proximately caused damages to the plaintiff. See Eurycleia Partners, LP v. Padilla &

VII. DAMAGES ANALYSIS A. Overview. Mr. Caldwell seeks total compensatory damages of $6,200,000, representing the aggregate of his out-of-pocket equity investment, his pro rata share of the diverted Glenmore advisory fee, and additional carrying costs, professional fees, and lost opportunity costs. In addition, Mr. Caldwell seeks punitive damages in an amount to be determined at trial, given the egregious, intentional

VIII. CALDWELL'S SETTLEMENT DEMAND A. Initial Demand Mr. Caldwell's initial settlement demand is $4,750,000. This demand reflects a good-faith discount from the full compensatory damages claim of $6,200,000, and entirely foregos the substantial punitive damages to which Mr. Caldwell would be entitled at trial. The demand represents Mr. Caldwell's recognition of the inherent uncertainties and costs of litigation, as w

1. Cash Payment: Payment of $4,750,000 in immediately available funds to Jonathan R. Caldwell (or, at Mr. Caldwell's election, to Caldwell Urban Ventures LLC), to be made within thirty (30) days of the execution of a definitive settlement agreement.

2. Transfer of Membership Interest: Simultaneous with the payment, Caldwell Urban Ventures LLC will transfer its 40% membership interest in Atlantic Yards Development Partners LLC to Pinnacle Greystone Capital LLC (or to a designee designated by Mr. Whitfield), free and clear of any claims by Mr. Caldwell.

3. Mutual General Releases: Execution of mutual general releases between Jonathan R. Caldwell, Caldwell Urban Ventures LLC, Marcus D. Whitfield, and Pinnacle Greystone Capital LLC, releasing all claims, counterclaims, and cross-claims arising out of or relating to the Project, the investment, and the matters alleged in the Complaint.

4. Confidentiality Provisions: Incorporation of customary confidentiality provisions restricting the parties from disclosing the terms of the settlement, subject to exceptions for legal, tax, and regulatory purposes.

5. Dismissal: Dismissal of the action (Index No. 519847/2023) with prejudice, with each party to bear its own costs and attorneys' fees. C. Justification for the Demand Mr. Caldwell submits that his demand of $4,750,000 is eminently reasonable in light of the evidence and the applicable legal standards. The demand represents a significant concession from Mr. Caldwell's full compensatory damages claim of $6,200,000 —

IX. CONCLUSION The evidence overwhelmingly supports Mr. Caldwell's claims of common-law fraud, fraudulent inducement, constructive fraud, breach of fiduciary duty, unjust enrichment, and aiding and abetting fraud. Mr. Whitfield systematically concealed four separate categories of material adverse information from his co-investor — $1,340,000 in pre-existing tax liens, a Phase II environmental assessment revealing $62