1034-00003 · Ridgeway, Tanaka & Schiff LLP · Correspondence

letter-opposing-counsel-discovery.docx DOCUMENT Litigation

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CALDERWOOD & HARKNESS LLP Attorneys at Law

599 Lexington Avenue, 34th Floor New York, New York 10022 Telephone: (212) 558-4000 Facsimile: (212) 558-4001 www.calderwoodharkness.com

November 15, 2023

VIA FIRST CLASS MAIL AND EMAIL (htanaka@ridgewaytanaka.com)

Helen K. Tanaka, Esq. Ridgeway, Tanaka & Schiff LLP 1 MetroTech Center, Suite 2200 Brooklyn, New York 11201

Re: Caldwell et al. v. Whitfield et al., Supreme Court of the State of New York, Kings County, Index No. 519847/2023 — Preliminary Disclosure and discovery Meet-and-Confer

Dear Ms. Tanaka:

I. Introduction and Purpose

I write on behalf of our clients, plaintiff Jonathan R. Caldwell and Caldwell Urban Ventures LLC (collectively, "Plaintiffs"), in connection with the above-captioned action. As you know, Plaintiffs filed their Verified Complaint on September 18, 2023, asserting claims for common-law fraud, fraudulent inducement, constructive fraud, breach of fiduciary duty, unjust enrichment, and aiding and abetting fraud against defendants Marcus D. Whitfield and Pinnacle Greystone Capital LLC (collectively, "Defendants"). The matter is assigned to the Honorable Patricia Velez, J.S.C.

On October 23, 2023, your firm filed an Answer on behalf of Defendants. On November 8, 2023, the Court denied Plaintiffs' motion for a preliminary injunction. While Plaintiffs respectfully disagree with that determination and reserve all rights with respect thereto, Plaintiffs now intend to proceed expeditiously with discovery on the merits of this action. The fraudulent conduct at issue in this case is of a serious nature, and the subject property located at 540-548 Atlantic Avenue, Brooklyn, New York 11217, continues to be developed under circumstances that are of significant concern to our clients. Time is of the essence.

The purpose of this letter is threefold. First, this letter is intended to fulfill the obligation of the parties to confer in good faith regarding disclosure pursuant to CPLR Article 31 and the Uniform Civil Rules for the Supreme Court. Second, this letter sets forth Plaintiffs' proposed discovery schedule for the parties' discussion and ultimate submission to the Court. Third, this letter previews the principal categories of documents that Plaintiffs will be demanding in their forthcoming First Set of Document Demands, so that Defendants may begin their collection and review efforts without delay, and so that the parties may have a productive meet-and-confer discussion regarding the scope and timing of disclosure.

We trust that both sides share an interest in conducting discovery efficiently and in good faith, and we look forward to working with your firm toward that end.

II. Preliminary Disclosure Obligations Under CPLR Article 31

As you are aware, CPLR § 3101(a) provides for "full disclosure of all matter material and necessary in the prosecution or defense of an action, regardless of the burden of proof." The New York Court of Appeals has consistently interpreted the phrase "material and necessary" liberally, requiring disclosure of any facts bearing on the controversy which will assist in preparation for trial. See Allen v. Collll-Collier Publ'g Co., 21 N.Y.2d 403, 406 (1968); Andon v. 302-304 Mott St. Assocs., 94 N.Y.2d 740, 746 (2000). The scope of disclosure under New York practice is deliberately broad and encompasses documents, electronically stored information ("ESI"), and other tangible things in a party's possession, custody, or control. See CPLR § 3101(a)-(d).

The principal disclosure devices available to the parties include, but are not limited to, demands for the production of documents and things pursuant to CPLR § 3120, interrogatories pursuant to CPLR § 3130, and depositions upon oral examination pursuant to CPLR § 3106. Plaintiffs intend to avail themselves of each of these devices in due course.

We note that a preliminary conference has not yet been scheduled by the Court. In light of this, we propose that the parties attempt to agree upon a comprehensive discovery framework in advance of any court-ordered scheduling. If the parties are able to reach agreement—or substantial agreement—on a discovery plan, we can jointly submit a proposed preliminary conference order to the Honorable Patricia Velez for her consideration and, if appropriate, so-ordering. This approach would conserve the Court's resources and allow the parties to commence discovery on an expedited basis. In the event the parties are unable to reach agreement on one or more aspects of the discovery plan, we can of course request a conference with the Court to resolve any disputes.

III. Proposed discovery Schedule

Plaintiffs propose the following discovery schedule. The dates set forth below are approximate and are intended to provide a workable framework for discussion. We are willing to consider reasonable modifications, but we emphasize at the outset that Plaintiffs have a strong interest in an expeditious schedule given the nature and seriousness of the fraud claims at issue in this action, as well as the fact that the subject property at 540-548 Atlantic Avenue, Brooklyn, New York 11217, is actively under development and Defendants continue to make material decisions regarding the project without transparency to Plaintiffs.

A. Document Demands. Plaintiffs intend to serve their First Set of Document Demands within seven (7) days of the date of this letter—i.e., on or before November 22, 2023. Pursuant to CPLR § 3122, Defendants shall respond to such demands within thirty (30) days of service, which would place the initial response deadline on or about December 22, 2023. We would expect that a rolling production would begin on or before that date, even if Defendants require additional time to complete their document collection and review.

B. Interrogatories. Plaintiffs propose that each party serve its first set of interrogatories within thirty (30) days of the date of a stipulated discovery schedule or preliminary conference order. Responses to interrogatories shall be due within twenty (20) days of service. Plaintiffs note that, pursuant to CPLR § 3130, interrogatories in Supreme Court actions are limited to twenty-five (25) in number, and Plaintiffs intend to comply with that limitation.

C. Non-Party Subpoenas. Plaintiffs intend to serve non-party subpoenas duces tecum pursuant to CPLR § 3120 on the following entities promptly following service of their First Set of Document Demands on Defendants: (i) Glenmore Realty Advisors Inc.; (ii) Ridgepoint Environmental Consultants LLC; and (iii) Broadmark Commercial Lending Corp. The substance of these anticipated subpoenas is described in greater detail in Section V below. We will provide courtesy copies of any non-party subpoenas to your office upon service.

D. Depositions. Plaintiffs propose that depositions commence within ninety (90) days of the substantial completion of document production by all parties and non-parties. Plaintiffs currently anticipate seeking depositions of the following individuals:

1. Marcus D. Whitfield — Individually and as the managing member and principal of Pinnacle Greystone Capital LLC and as co-manager of Atlantic Yards Development Partners LLC. Mr. Whitfield is a central figure in every claim asserted in the Verified Complaint, and his deposition testimony will be essential on issues of knowledge, intent, and the nature and scope of his representations to Plaintiffs.

2. Neil Osterberg — As the principal of Glenmore Realty Advisors Inc. and as Mr. Whitfield's brother-in-law. Mr. Osterberg's testimony is material to the circumstances surrounding the April 30, 2021 consulting agreement, the $370,000 "acquisition advisory fee" paid from project funds, and the failure to disclose the familial relationship to Plaintiffs or any other investor.

3. David Poulos — As a loan officer at Broadmark Commercial Lending Corp. Mr. Poulos was the primary contact at the lender and is expected to have direct knowledge of the loan underwriting, the appraisals and environmental reports submitted in connection with the loan, and the August 2023 events that precipitated Plaintiffs' discovery of the concealed tax liens and environmental contamination.

4. A Corporate Representative of Pinnacle Greystone Capital LLC — Pursuant to CPLR § 3106(d), Plaintiffs intend to notice the deposition of a corporate representative of Pinnacle Greystone Capital LLC on topics to be designated in advance, including the entity's formation, its management of Atlantic Yards Development Partners LLC, and its knowledge of and involvement in the transactions at issue.

Plaintiffs reserve the right to identify additional deponents as discovery progresses.

E. Expert Disclosure. Plaintiffs propose that expert designations and the exchange of expert reports follow the completion of fact discovery. As an initial matter, Plaintiffs advise that they have retained the following consulting experts in connection with this action:

• Ellerby & Associates CPAs LLP — A certified public accounting firm retained to conduct a financial analysis of the pro forma projections circulated by Mr. Whitfield, an analysis of the actual rental income and operating expenses of the subject property, and an assessment of the damages sustained by Plaintiffs as a result of the alleged fraud.

• Tidewater Appraisal Group LLC — A real estate appraisal firm retained through Kevin Romero, MAI, to prepare a retrospective appraisal of the subject property as of the date of the May 14, 2021 acquisition, taking into account the environmental contamination and tax lien obligations that were concealed from Plaintiffs.

Plaintiffs may designate one or both of these experts as testifying experts at the appropriate time. The specific schedule for expert disclosure and any expert depositions can be addressed in the proposed preliminary conference order.

F. Note of Issue. Plaintiffs propose a target of approximately eight (8) to ten (10) months from the date of a preliminary conference order for the completion of all discovery and the filing of a Note of Issue and Certificate of Readiness. Given the complexity of the document production anticipated in this case and the number of depositions likely to be required, Plaintiffs believe this timeline is realistic but appropriately aggressive.

We are prepared to discuss alternative timelines if Defendants have specific concerns or scheduling constraints. However, we wish to make clear that Plaintiffs will not agree to any schedule that permits unnecessary delay. The allegations in this case involve serious fraud that has caused Plaintiffs substantial financial harm, and the ongoing development of the subject property creates the potential for further injury if this action is not resolved in a timely manner.

IV. Plaintiffs' Initial Document Demands — Summary of Key Categories

As noted above, Plaintiffs intend to serve a comprehensive First Set of Document Demands on or before November 22, 2023. In order to facilitate Defendants' early collection efforts and to provide a meaningful basis for our meet-and-confer discussion, we set forth below a summary of the principal categories of documents that Plaintiffs intend to demand. This summary is not exhaustive, and the formal document demands may include additional categories and more specific requests. Nevertheless, we believe that previewing these key categories will allow Defendants to begin the process of identifying relevant custodians, locating responsive documents, and implementing appropriate search methodologies for ESI.

A. Glenmore Realty Advisors Inc. Consulting Agreement and Related Documents

Plaintiffs will seek all documents concerning the consulting agreement dated April 30, 2021, between Pinnacle Greystone Capital LLC and Glenmore Realty Advisors Inc. This category includes, but is not limited to, the following:

(i) the fully executed consulting agreement itself;

(ii) all prior drafts, redlines, and markup versions of the agreement;

(iii) all communications—whether by email, text message, telephone memorandum, letter, or any other medium—between Marcus D. Whitfield and Neil Osterberg, or between Marcus D. Whitfield and any other representative, agent, or employee of Glenmore Realty Advisors Inc., concerning the consulting agreement, the scope of services to be provided, the compensation to be paid, or any other terms of the engagement;

(iv) all invoices, payment records, wire transfer confirmations, bank statements, and cancelled checks reflecting payment of the $370,000 "acquisition advisory fee" from the accounts or project funds of Atlantic Yards Development Partners LLC, Pinnacle Greystone Capital LLC, or any related entity;

(v) all documents reflecting the services, if any, actually performed by Glenmore Realty Advisors Inc. under the consulting agreement, including any reports, memoranda, market analyses, or work product delivered by Glenmore to Pinnacle Greystone Capital LLC or Atlantic Yards Development Partners LLC.

In addition, Plaintiffs will seek all documents reflecting any other fee arrangements, consulting agreements, side letters, or payments of any kind between Pinnacle Greystone Capital LLC or Atlantic Yards Development Partners LLC, on the one hand, and Glenmore Realty Advisors Inc. or Neil Osterberg, on the other hand, whether before, during, or after the period of the consulting agreement referenced above.

Plaintiffs will also demand all documents concerning the relationship between Marcus D. Whitfield and Neil Osterberg, including but not limited to any disclosures—or the absence thereof—of their familial relationship (brother-in-law) to Jonathan R. Caldwell, Caldwell Urban Ventures LLC, Broadmark Commercial Lending Corp., or any other investor, lender, or third party involved in the acquisition or development of the subject property.

This category of documents goes directly to the heart of Plaintiffs' claims regarding the undisclosed related-party consulting agreement. As set forth in the Verified Complaint, Mr. Whitfield caused $370,000 in project funds to be paid to his brother-in-law's entity without disclosure to Plaintiffs. The documents in this category are plainly material and necessary to the prosecution of Plaintiffs' fraud and breach of fiduciary duty claims.

B. Ridgepoint Environmental Consultants LLC Phase II Environmental Site Assessment

Plaintiffs will seek all documents concerning the Phase I and Phase II environmental site assessments of the subject property at 540-548 Atlantic Avenue, Brooklyn, New York 11217, performed by Ridgepoint Environmental Consultants LLC. This category includes, but is not limited to:

(i) the Phase I environmental site assessment report for the subject property;

(ii) the Phase II environmental site assessment report completed in or about February 2021, which documented petroleum contamination at the site and estimated remediation costs of approximately $620,000;

(iii) all communications between Marcus D. Whitfield, Pinnacle Greystone Capital LLC, or any agent or representative thereof, on the one hand, and Ridgepoint Environmental Consultants LLC, on the other hand, concerning the engagement of Ridgepoint, the scope of the environmental assessments, the findings and conclusions of those assessments, and any discussions regarding the dissemination or non-dissemination of the Phase II report;

(iv) all engagement letters, contracts, invoices, and payment records reflecting the terms and compensation for Ridgepoint's environmental assessment work;

(v) all field data, sampling results, laboratory analyses, chain-of-custody records, and underlying data supporting the findings of the Phase I and Phase II reports.

Plaintiffs will further demand all documents reflecting any other environmental testing, investigation, monitoring, or remediation performed, proposed, or contemplated in connection with the subject property, whether by Ridgepoint or any other environmental consultant, contractor, or governmental agency.

Of particular importance, Plaintiffs will demand all documents reflecting Mr. Whitfield's representations to Mr. Caldwell that the Phase I environmental assessment was "clean" and that no further environmental investigation was warranted. This includes all emails, text messages, letters, and other communications between Whitfield and Caldwell regarding environmental conditions at the subject property at any time. As alleged in the Verified Complaint, Mr. Whitfield affirmatively concealed the existence of the Phase II report and its findings of petroleum contamination from Mr. Caldwell in order to induce Mr. Caldwell's investment in the project. These documents are essential to establishing Defendants' knowledge, intent, and the falsity of the representations made to Plaintiffs.

C. Broadmark Commercial Lending Corp. Loan Files and Communications

Plaintiffs will seek all documents concerning the $9,620,000 acquisition and construction loan from Broadmark Commercial Lending Corp. to Atlantic Yards Development Partners LLC, secured by a first-priority mortgage on the subject property. This is a broad category that encompasses:

(i) the loan agreement, promissory note, and mortgage, together with all amendments, modifications, extensions, and related instruments;

(ii) all draw requests submitted by the borrower and all approvals or denials thereof by the lender;

(iii) all appraisals of the subject property submitted to or obtained by Broadmark in connection with the loan origination or any subsequent loan modification or extension;

(iv) all environmental reports submitted to or obtained by Broadmark in connection with the loan;

(v) all title reports, title insurance commitments and policies, lien searches, and survey documents submitted to or obtained by Broadmark in connection with the loan;

(vi) all correspondence, emails, and other communications between Marcus D. Whitfield, Pinnacle Greystone Capital LLC, Atlantic Yards Development Partners LLC, or any agent thereof, on the one hand, and Broadmark Commercial Lending Corp. (including David Poulos, Loan Officer, and any other Broadmark representative), on the other hand, concerning the loan, the subject property, or any matter related thereto.

Of particular importance, Plaintiffs will demand all documents concerning the events of August 2023 in which Broadmark required updated title and environmental reports as a condition of extending the construction loan maturity date. It was this requirement that led to Mr. Caldwell's discovery of the previously undisclosed $1,340,000 in outstanding New York City real property tax liens against the subject property, as well as the suppressed Phase II environmental contamination findings. All documents reflecting these events—including all communications between the lender and the borrower, all updated reports obtained, and all internal communications among the principals of Atlantic Yards Development Partners LLC—are highly material to Plaintiffs' claims.

D. Tax Lien Records and Title Documents

Plaintiffs will demand all documents concerning the $1,340,000 in outstanding New York City real property tax liens against the subject property at 540-548 Atlantic Avenue, Brooklyn, New York 11217. This category includes:

(i) all title reports, title insurance commitments and policies, and updates thereto obtained at any time in connection with the acquisition, financing, or development of the subject property;

(ii) all lien searches, including any searches of the records of the New York City Department of Finance, the Office of the City Register, or any title company;

(iii) all records from the New York City Department of Finance or any tax lien servicer reflecting the existence, amount, status, or disposition of real property tax liens against the subject property;

(iv) all communications with any title company, title insurance underwriter, tax lien servicer, or governmental agency concerning the tax liens;

(v) all documents reflecting any payments, partial payments, or negotiations relating to the tax liens.

Plaintiffs will specifically demand all documents reflecting Mr. Whitfield's knowledge of the tax liens at or before the time of the May 14, 2021 acquisition of the subject property. As alleged in the Verified Complaint, Mr. Whitfield represented to Mr. Caldwell that the tax liens had been resolved when, in fact, they had not. Documents reflecting the state of Mr. Whitfield's knowledge—including any title reports or lien searches obtained prior to the acquisition—are directly relevant to establishing the scienter element of Plaintiffs' fraud claims.

E. Pro Forma Financial Projections and Rent Roll

Plaintiffs will seek all documents concerning the pro forma financial projections and rent roll circulated by Marcus D. Whitfield in or about March 2021 to Jonathan R. Caldwell in connection with the proposed co-investment in the subject property. As alleged in the Verified Complaint, the pro forma projected $2,160,000 in annual gross rental income at stabilization and a stabilized property value of $31,200,000. Plaintiffs believe these projections were materially inflated and were designed to induce Mr. Caldwell's investment. Accordingly, Plaintiffs will demand:

(i) the pro forma financial projections circulated to Mr. Caldwell, including all versions, drafts, and revisions;

(ii) all working papers, spreadsheets, models, and underlying assumptions used in preparing the pro forma;

(iii) all market studies, comparable rental analyses, comparable sales data, and any third-party reports relied upon or referenced in preparing the pro forma;

(iv) all communications between Mr. Whitfield and any person concerning the preparation, review, or dissemination of the pro forma;

(v) all documents reflecting actual rental income, leases, letters of intent, tenant correspondence, and occupancy data for the subject property from the date of acquisition (May 14, 2021) through the present date;

(vi) all documents reflecting actual operating expenses, capital expenditures, and net operating income for the subject property from the date of acquisition through the present date.

The comparison between the projected financial performance and the actual financial performance of the subject property is at the core of Plaintiffs' fraudulent inducement claim. Defendants' early attention to this category of documents is therefore essential.

F. Atlantic Yards Development Partners LLC — Formation, Governance, and Financial Records

Plaintiffs will demand the full complement of corporate governance and financial records for Atlantic Yards Development Partners LLC (EIN: 87-1253946), the limited liability company formed on April 22, 2021, through which the co-investment was structured. Caldwell Urban Ventures LLC holds a forty percent (40%) membership interest in Atlantic Yards Development Partners LLC, and Pinnacle Greystone Capital LLC holds a sixty percent (60%) membership interest. Plaintiffs will specifically demand:

(i) the Operating Agreement of Atlantic Yards Development Partners LLC, including all amendments, supplements, and side letters;

(ii) the Articles of Organization or Certificate of Formation filed with the New York Department of State, together with any amendments thereto;

(iii) all related agreements governing the co-investment relationship between Caldwell Urban Ventures LLC and Pinnacle Greystone Capital LLC, including any subscription agreements, contribution agreements, or management agreements;

(iv) all financial statements—whether audited, reviewed, compiled, or internally prepared—of Atlantic Yards Development Partners LLC from formation through the present;

(v) all bank statements for every account maintained by or on behalf of Atlantic Yards Development Partners LLC from formation through the present;

(vi) general ledgers, journals, and other books of account of Atlantic Yards Development Partners LLC from formation through the present;

(vii) all capital call notices, capital contribution records, and evidence of capital contributions made by each member;

(viii) all distribution records and evidence of distributions made to each member;

(ix) all communications between Marcus D. Whitfield and Jonathan R. Caldwell, or between Pinnacle Greystone Capital LLC and Caldwell Urban Ventures LLC, regarding the project, the subject property, the entity, or any matter related thereto.

As a forty percent member of the venture entity, Mr. Caldwell and Caldwell Urban Ventures LLC are entitled to access to the books and records of Atlantic Yards Development Partners LLC as a matter of right under the New York Limited Liability Company Law. To the extent Defendants take the position that any of these documents are not subject to disclosure in discovery, Plaintiffs reserve the right to pursue a books-and-records demand under LLC Law § 1102, in addition to their discovery rights under CPLR Article 31.

G. Broad and Catch-All Requests

In addition to the foregoing categories, Plaintiffs intend to serve broad requests encompassing:

(i) all communications—whether by email, text message, instant message, voicemail, letter, or any other medium—between Marcus D. Whitfield and any third party concerning the subject property, the investment, or any of the claims, defenses, or transactions at issue in this action;

(ii) all insurance policies maintained by or on behalf of Marcus D. Whitfield, Pinnacle Greystone Capital LLC, or Atlantic Yards Development Partners LLC, including without limitation any directors and officers ("D&O") liability policies, errors and omissions ("E&O") policies, general liability policies, and any umbrella or excess policies;

(iii) all documents identified in, referenced by, or responsive to the factual allegations set forth in the Verified Complaint filed September 18, 2023.

We recognize that some of these categories are broad, and we are prepared to discuss reasonable search parameters and custodian limitations during our meet-and-confer. However, the breadth of the fraud alleged in this case necessitates broad discovery, and Plaintiffs do not intend to accept artificial limitations on the scope of their document demands.

V. Non-Party Subpoenas

As noted in Section III above, Plaintiffs intend to serve subpoenas duces tecum pursuant to CPLR § 3120 on the following non-parties. We provide the anticipated scope of each subpoena below for your review and comment:

A. Glenmore Realty Advisors Inc. Plaintiffs intend to subpoena Glenmore Realty Advisors Inc. for the following categories of documents: the consulting agreement dated April 30, 2021, with Pinnacle Greystone Capital LLC; all related payment records, invoices, and banking records reflecting receipt of the $370,000 "acquisition advisory fee" or any other payment from Pinnacle Greystone Capital LLC, Atlantic Yards Development Partners LLC, or Marcus D. Whitfield; all communications between Neil Osterberg (or any other representative of Glenmore) and Marcus D. Whitfield, Pinnacle Greystone Capital LLC, or Atlantic Yards Development Partners LLC concerning the consulting agreement, the subject property, or the co-investment; and all work product or deliverables prepared by Glenmore under the consulting agreement.

B. Ridgepoint Environmental Consultants LLC. Plaintiffs intend to subpoena Ridgepoint Environmental Consultants LLC for its complete files relating to the Phase I and Phase II environmental site assessments for 540-548 Atlantic Avenue, Brooklyn, New York 11217, including all reports (draft and final), field notes, sampling data, laboratory results, chain-of-custody documentation, correspondence with any party, engagement letters, invoices, and any supplemental or follow-up assessments or monitoring conducted at the site.

C. Broadmark Commercial Lending Corp. Plaintiffs intend to subpoena Broadmark Commercial Lending Corp. for the complete loan file relating to the $9,620,000 acquisition and construction loan to Atlantic Yards Development Partners LLC, including all applications, commitments, loan agreements, promissory notes, mortgages, appraisals, environmental reports, title reports, title insurance policies, draw request packages, inspection reports, correspondence with the borrower and its principals (including Marcus D. Whitfield and Jonathan R. Caldwell), and all internal credit memoranda and underwriting analyses.

We request that Defendants advise us whether they have any objection to these non-party subpoenas, or whether Defendants wish to coordinate with Plaintiffs in order to avoid unnecessary duplication of effort. We are amenable to reasonable coordination and will provide Defendants with copies of all non-party subpoenas upon service.

VI. Preservation Obligations

We take this opportunity to remind Defendants of their continuing obligation to preserve all documents and electronically stored information relevant to the claims and defenses in this action. This obligation has been in effect since at least September 18, 2023, the date the Verified Complaint was filed, and arguably earlier, given that the dispute between the parties arose no later than August 2023.

The allegations in the Verified Complaint are broad, encompassing concealed New York City real property tax liens in the amount of $1,340,000, a suppressed Phase II environmental site assessment documenting petroleum contamination and estimated remediation costs of $620,000, materially inflated pro forma financial projections, and an undisclosed related-party consulting agreement pursuant to which $370,000 in project funds were diverted to Mr. Whitfield's brother-in-law. The preservation obligation is correspondingly broad and extends to all documents and ESI—including emails, text messages, instant messages, voicemails, calendars, financial records, and metadata—that are potentially relevant to any of these subjects.

We request that Defendants confirm, in writing, that they have issued and are maintaining a comprehensive litigation hold encompassing all relevant custodians. At a minimum, the litigation hold should cover the files and electronic communications of Marcus D. Whitfield and any employees, agents, consultants, or contractors of Pinnacle Greystone Capital LLC who have knowledge of, or were involved in, any of the transactions at issue in this action. The litigation hold should encompass all devices (including personal devices, to the extent used for business communications), email accounts, cloud storage, file servers, and any other repositories where relevant documents or ESI may reside.

Plaintiffs will not hesitate to seek sanctions, including adverse inference instructions, in the event that any relevant documents or ESI are lost, destroyed, or degraded as a result of Defendants' failure to implement and enforce an adequate litigation hold. See CPLR § 3126; Pegasus Aviation I, Inc. v. Varig Logística S.A., 26 N.Y.3d 543 (2015); VOOM HD Holdings LLC v. EchoStar Satellite L.L.C., 93 A.D.3d 33 (1st Dep't 2012).

VII. Proposed Meet-and-Confer

Plaintiffs propose that the parties meet and confer by telephone or videoconference during the week of November 27, 2023, to discuss the following topics:

1. The proposed discovery schedule set forth in Section III of this letter, including any modifications or alternative timelines Defendants wish to propose;

2. Any objections Defendants may have to the categories of documents summarized in Section IV, so that the parties may attempt to resolve any disputes informally before formal demands are served;

3. Coordination of non-party subpoenas to avoid unnecessary duplication and to streamline the production process;

4. Whether the parties wish to negotiate a confidentiality stipulation and/or seek a protective order from the Court, given the potential for commercially sensitive financial information to be produced in discovery. Plaintiffs are amenable to a reasonable confidentiality stipulation modeled on standard commercial litigation protective orders, and we are prepared to circulate a proposed form for Defendants' review;

5. Preparation of a proposed preliminary conference order for submission to the Honorable Patricia Velez, J.S.C., reflecting the agreed-upon (or, if necessary, disputed) terms of the discovery plan.

We would appreciate it if you or your associate, Robert Feinberg, Esq., would contact the undersigned at your earliest convenience to confirm your availability during the week of November 27, 2023. We are flexible as to the date and time and are prepared to accommodate your schedule to the extent possible.

VIII. Reservation of Rights

Plaintiffs expressly reserve all rights to seek additional discovery beyond the categories identified in this letter, including but not limited to additional document demands, interrogatories, depositions, and requests for admission, as the facts developed in discovery may warrant.

Plaintiffs further reserve the right to seek court intervention pursuant to CPLR § 3124 (motion to compel disclosure) or CPLR § 3126 (penalties for refusal to comply with disclosure orders) in the event that Defendants fail to comply with their disclosure obligations, engage in dilatory tactics, or otherwise obstruct the discovery process.

Nothing in this letter is intended to limit, waive, or otherwise affect any of Plaintiffs' claims, rights, or remedies, including Plaintiffs' claims for compensatory damages in the amount of $6,200,000 and for punitive damages as set forth in the Verified Complaint. Plaintiffs' willingness to engage in good-faith discussions regarding the scope and timing of discovery should not be construed as any concession regarding the merits of Plaintiffs' claims or the seriousness of Defendants' conduct.

We sincerely hope that the parties can cooperate to develop a reasonable and efficient discovery framework and avoid unnecessary and costly motion practice. We believe that the proposed schedule and the discovery categories outlined in this letter are fair, proportionate, and well within the bounds of what is material and necessary under CPLR Article 31.

We respectfully request your response at Defendants' earliest convenience, and in no event later than November 22, 2023. If we do not receive a response by that date, we will proceed to serve our First Set of Document Demands and will request a preliminary conference with the Court to establish a discovery schedule.

Thank you for your attention to this matter. We look forward to hearing from you.

Respectfully submitted,

CALDERWOOD & HARKNESS LLP

By: ________

Patrick Gallagher, Esq. Calderwood & Harkness LLP 599 Lexington Avenue, 34th Floor New York, New York 10022 Direct: (212) 558-4127

Email: pgallagher@calderwoodharkness.com

cc (via email):

Douglas Carmichael, Esq. (Calderwood & Harkness LLP) Francesca Morano, Esq. (Calderwood & Harkness LLP) Robert Feinberg, Esq. (Ridgeway, Tanaka & Schiff LLP) Jonathan R. Caldwell (via separate cover)

CALDERWOOD & HARKNESS LLP Attorneys at Law
599 Lexington Avenue, 34th Floor New York, New York 10022 Telephone: (212) 558-4000 Facsimile: (212) 558-4001 www.calderwoodharkness.com
November 15, 2023
VIA FIRST CLASS MAIL AND EMAIL (htanaka@ridgewaytanaka.com)
Helen K. Tanaka, Esq. Ridgeway, Tanaka & Schiff LLP 1 MetroTech Center, Suite 2200 Brooklyn, New York 11201
Re: Caldwell et al. v. Whitfield et al., Supreme Court of the State of New York, Kings County, Index No. 519847/2023 — Preliminary Disclosure and discovery Meet-and-Confer
Dear Ms. Tanaka:
I. Introduction and Purpose
I write on behalf of our clients, plaintiff Jonathan R. Caldwell and Caldwell Urban Ventures LLC (collectively, "Plaintiffs"), in connection with the above-captioned action. As you know, Plaintiffs filed their Verified Complaint on September 18, 2023, asserting claims for common-law fraud, fraudulent inducement, constructive fraud, breach of fiduciary duty, unjust enrichment, and aiding and abetting fraud against defendants Marcus D. Whitfield and Pinnacle Greystone Capital LLC (collectively, "Defendants"). The matter is assigned to the Honorable Patricia Velez, J.S.C.
On October 23, 2023, your firm filed an Answer on behalf of Defendants. On November 8, 2023, the Court denied Plaintiffs' motion for a preliminary injunction. While Plaintiffs respectfully disagree with that determination and reserve all rights with respect thereto, Plaintiffs now intend to proceed expeditiously with discovery on the merits of this action. The fraudulent conduct at issue in this case is of a serious nature, and the subject property located at 540-548 Atlantic Avenue, Brooklyn, New York 11217, continues to be developed under circumstances that are of significant concern to our clients. Time is of the essence.
The purpose of this letter is threefold. First, this letter is intended to fulfill the obligation of the parties to confer in good faith regarding disclosure pursuant to CPLR Article 31 and the Uniform Civil Rules for the Supreme Court. Second, this letter sets forth Plaintiffs' proposed discovery schedule for the parties' discussion and ultimate submission to the Court. Third, this letter previews the principal categories of documents that Plaintiffs will be demanding in their forthcoming First Set of Document Demands, so that Defendants may begin their collection and review efforts without delay, and so that the parties may have a productive meet-and-confer discussion regarding the scope and timing of disclosure.
We trust that both sides share an interest in conducting discovery efficiently and in good faith, and we look forward to working with your firm toward that end.
II. Preliminary Disclosure Obligations Under CPLR Article 31
As you are aware, CPLR § 3101(a) provides for "full disclosure of all matter material and necessary in the prosecution or defense of an action, regardless of the burden of proof." The New York Court of Appeals has consistently interpreted the phrase "material and necessary" liberally, requiring disclosure of any facts bearing on the controversy which will assist in preparation for trial. See Allen v. Collll-Collier Publ'g Co., 21 N.Y.2d 403, 406 (1968); Andon v. 302-304 Mott St. Assocs., 94 N.Y.2d 740, 746 (2000). The scope of disclosure under New York practice is deliberately broad and encompasses documents, electronically stored information ("ESI"), and other tangible things in a party's possession, custody, or control. See CPLR § 3101(a)-(d).
The principal disclosure devices available to the parties include, but are not limited to, demands for the production of documents and things pursuant to CPLR § 3120, interrogatories pursuant to CPLR § 3130, and depositions upon oral examination pursuant to CPLR § 3106. Plaintiffs intend to avail themselves of each of these devices in due course.
We note that a preliminary conference has not yet been scheduled by the Court. In light of this, we propose that the parties attempt to agree upon a comprehensive discovery framework in advance of any court-ordered scheduling. If the parties are able to reach agreement—or substantial agreement—on a discovery plan, we can jointly submit a proposed preliminary conference order to the Honorable Patricia Velez for her consideration and, if appropriate, so-ordering. This approach would conserve the Court's resources and allow the parties to commence discovery on an expedited basis. In the event the parties are unable to reach agreement on one or more aspects of the discovery plan, we can of course request a conference with the Court to resolve any disputes.
III. Proposed discovery Schedule
Plaintiffs propose the following discovery schedule. The dates set forth below are approximate and are intended to provide a workable framework for discussion. We are willing to consider reasonable modifications, but we emphasize at the outset that Plaintiffs have a strong interest in an expeditious schedule given the nature and seriousness of the fraud claims at issue in this action, as well as the fact that the subject property at 540-548 Atlantic Avenue, Brooklyn, New York 11217, is actively under development and Defendants continue to make material decisions regarding the project without transparency to Plaintiffs.
A. Document Demands. Plaintiffs intend to serve their First Set of Document Demands within seven (7) days of the date of this letter—i.e., on or before November 22, 2023. Pursuant to CPLR § 3122, Defendants shall respond to such demands within thirty (30) days of service, which would place the initial response deadline on or about December 22, 2023. We would expect that a rolling production would begin on or before that date, even if Defendants require additional time to complete their document collection and review.
B. Interrogatories. Plaintiffs propose that each party serve its first set of interrogatories within thirty (30) days of the date of a stipulated discovery schedule or preliminary conference order. Responses to interrogatories shall be due within twenty (20) days of service. Plaintiffs note that, pursuant to CPLR § 3130, interrogatories in Supreme Court actions are limited to twenty-five (25) in number, and Plaintiffs intend to comply with that limitation.
C. Non-Party Subpoenas. Plaintiffs intend to serve non-party subpoenas duces tecum pursuant to CPLR § 3120 on the following entities promptly following service of their First Set of Document Demands on Defendants: (i) Glenmore Realty Advisors Inc.; (ii) Ridgepoint Environmental Consultants LLC; and (iii) Broadmark Commercial Lending Corp. The substance of these anticipated subpoenas is described in greater detail in Section V below. We will provide courtesy copies of any non-party subpoenas to your office upon service.
D. Depositions. Plaintiffs propose that depositions commence within ninety (90) days of the substantial completion of document production by all parties and non-parties. Plaintiffs currently anticipate seeking depositions of the following individuals:
1. Marcus D. Whitfield — Individually and as the managing member and principal of Pinnacle Greystone Capital LLC and as co-manager of Atlantic Yards Development Partners LLC. Mr. Whitfield is a central figure in every claim asserted in the Verified Complaint, and his deposition testimony will be essential on issues of knowledge, intent, and the nature and scope of his representations to Plaintiffs.
2. Neil Osterberg — As the principal of Glenmore Realty Advisors Inc. and as Mr. Whitfield's brother-in-law. Mr. Osterberg's testimony is material to the circumstances surrounding the April 30, 2021 consulting agreement, the $370,000 "acquisition advisory fee" paid from project funds, and the failure to disclose the familial relationship to Plaintiffs or any other investor.
3. David Poulos — As a loan officer at Broadmark Commercial Lending Corp. Mr. Poulos was the primary contact at the lender and is expected to have direct knowledge of the loan underwriting, the appraisals and environmental reports submitted in connection with the loan, and the August 2023 events that precipitated Plaintiffs' discovery of the concealed tax liens and environmental contamination.
4. A Corporate Representative of Pinnacle Greystone Capital LLC — Pursuant to CPLR § 3106(d), Plaintiffs intend to notice the deposition of a corporate representative of Pinnacle Greystone Capital LLC on topics to be designated in advance, including the entity's formation, its management of Atlantic Yards Development Partners LLC, and its knowledge of and involvement in the transactions at issue.
Plaintiffs reserve the right to identify additional deponents as discovery progresses.
E. Expert Disclosure. Plaintiffs propose that expert designations and the exchange of expert reports follow the completion of fact discovery. As an initial matter, Plaintiffs advise that they have retained the following consulting experts in connection with this action:
• Ellerby & Associates CPAs LLP — A certified public accounting firm retained to conduct a financial analysis of the pro forma projections circulated by Mr. Whitfield, an analysis of the actual rental income and operating expenses of the subject property, and an assessment of the damages sustained by Plaintiffs as a result of the alleged fraud.
• Tidewater Appraisal Group LLC — A real estate appraisal firm retained through Kevin Romero, MAI, to prepare a retrospective appraisal of the subject property as of the date of the May 14, 2021 acquisition, taking into account the environmental contamination and tax lien obligations that were concealed from Plaintiffs.
Plaintiffs may designate one or both of these experts as testifying experts at the appropriate time. The specific schedule for expert disclosure and any expert depositions can be addressed in the proposed preliminary conference order.
F. Note of Issue. Plaintiffs propose a target of approximately eight (8) to ten (10) months from the date of a preliminary conference order for the completion of all discovery and the filing of a Note of Issue and Certificate of Readiness. Given the complexity of the document production anticipated in this case and the number of depositions likely to be required, Plaintiffs believe this timeline is realistic but appropriately aggressive.
We are prepared to discuss alternative timelines if Defendants have specific concerns or scheduling constraints. However, we wish to make clear that Plaintiffs will not agree to any schedule that permits unnecessary delay. The allegations in this case involve serious fraud that has caused Plaintiffs substantial financial harm, and the ongoing development of the subject property creates the potential for further injury if this action is not resolved in a timely manner.
IV. Plaintiffs' Initial Document Demands — Summary of Key Categories
As noted above, Plaintiffs intend to serve a comprehensive First Set of Document Demands on or before November 22, 2023. In order to facilitate Defendants' early collection efforts and to provide a meaningful basis for our meet-and-confer discussion, we set forth below a summary of the principal categories of documents that Plaintiffs intend to demand. This summary is not exhaustive, and the formal document demands may include additional categories and more specific requests. Nevertheless, we believe that previewing these key categories will allow Defendants to begin the process of identifying relevant custodians, locating responsive documents, and implementing appropriate search methodologies for ESI.
A. Glenmore Realty Advisors Inc. Consulting Agreement and Related Documents
Plaintiffs will seek all documents concerning the consulting agreement dated April 30, 2021, between Pinnacle Greystone Capital LLC and Glenmore Realty Advisors Inc. This category includes, but is not limited to, the following:
(i) the fully executed consulting agreement itself;
(ii) all prior drafts, redlines, and markup versions of the agreement;
(iii) all communications—whether by email, text message, telephone memorandum, letter, or any other medium—between Marcus D. Whitfield and Neil Osterberg, or between Marcus D. Whitfield and any other representative, agent, or employee of Glenmore Realty Advisors Inc., concerning the consulting agreement, the scope of services to be provided, the compensation to be paid, or any other terms of the engagement;
(iv) all invoices, payment records, wire transfer confirmations, bank statements, and cancelled checks reflecting payment of the $370,000 "acquisition advisory fee" from the accounts or project funds of Atlantic Yards Development Partners LLC, Pinnacle Greystone Capital LLC, or any related entity;
(v) all documents reflecting the services, if any, actually performed by Glenmore Realty Advisors Inc. under the consulting agreement, including any reports, memoranda, market analyses, or work product delivered by Glenmore to Pinnacle Greystone Capital LLC or Atlantic Yards Development Partners LLC.
In addition, Plaintiffs will seek all documents reflecting any other fee arrangements, consulting agreements, side letters, or payments of any kind between Pinnacle Greystone Capital LLC or Atlantic Yards Development Partners LLC, on the one hand, and Glenmore Realty Advisors Inc. or Neil Osterberg, on the other hand, whether before, during, or after the period of the consulting agreement referenced above.
Plaintiffs will also demand all documents concerning the relationship between Marcus D. Whitfield and Neil Osterberg, including but not limited to any disclosures—or the absence thereof—of their familial relationship (brother-in-law) to Jonathan R. Caldwell, Caldwell Urban Ventures LLC, Broadmark Commercial Lending Corp., or any other investor, lender, or third party involved in the acquisition or development of the subject property.
This category of documents goes directly to the heart of Plaintiffs' claims regarding the undisclosed related-party consulting agreement. As set forth in the Verified Complaint, Mr. Whitfield caused $370,000 in project funds to be paid to his brother-in-law's entity without disclosure to Plaintiffs. The documents in this category are plainly material and necessary to the prosecution of Plaintiffs' fraud and breach of fiduciary duty claims.
B. Ridgepoint Environmental Consultants LLC Phase II Environmental Site Assessment
Plaintiffs will seek all documents concerning the Phase I and Phase II environmental site assessments of the subject property at 540-548 Atlantic Avenue, Brooklyn, New York 11217, performed by Ridgepoint Environmental Consultants LLC. This category includes, but is not limited to:
(i) the Phase I environmental site assessment report for the subject property;
(ii) the Phase II environmental site assessment report completed in or about February 2021, which documented petroleum contamination at the site and estimated remediation costs of approximately $620,000;
(iii) all communications between Marcus D. Whitfield, Pinnacle Greystone Capital LLC, or any agent or representative thereof, on the one hand, and Ridgepoint Environmental Consultants LLC, on the other hand, concerning the engagement of Ridgepoint, the scope of the environmental assessments, the findings and conclusions of those assessments, and any discussions regarding the dissemination or non-dissemination of the Phase II report;
(iv) all engagement letters, contracts, invoices, and payment records reflecting the terms and compensation for Ridgepoint's environmental assessment work;
(v) all field data, sampling results, laboratory analyses, chain-of-custody records, and underlying data supporting the findings of the Phase I and Phase II reports.
Plaintiffs will further demand all documents reflecting any other environmental testing, investigation, monitoring, or remediation performed, proposed, or contemplated in connection with the subject property, whether by Ridgepoint or any other environmental consultant, contractor, or governmental agency.
Of particular importance, Plaintiffs will demand all documents reflecting Mr. Whitfield's representations to Mr. Caldwell that the Phase I environmental assessment was "clean" and that no further environmental investigation was warranted. This includes all emails, text messages, letters, and other communications between Whitfield and Caldwell regarding environmental conditions at the subject property at any time. As alleged in the Verified Complaint, Mr. Whitfield affirmatively concealed the existence of the Phase II report and its findings of petroleum contamination from Mr. Caldwell in order to induce Mr. Caldwell's investment in the project. These documents are essential to establishing Defendants' knowledge, intent, and the falsity of the representations made to Plaintiffs.
C. Broadmark Commercial Lending Corp. Loan Files and Communications
Plaintiffs will seek all documents concerning the $9,620,000 acquisition and construction loan from Broadmark Commercial Lending Corp. to Atlantic Yards Development Partners LLC, secured by a first-priority mortgage on the subject property. This is a broad category that encompasses:
(i) the loan agreement, promissory note, and mortgage, together with all amendments, modifications, extensions, and related instruments;
(ii) all draw requests submitted by the borrower and all approvals or denials thereof by the lender;
(iii) all appraisals of the subject property submitted to or obtained by Broadmark in connection with the loan origination or any subsequent loan modification or extension;
(iv) all environmental reports submitted to or obtained by Broadmark in connection with the loan;
(v) all title reports, title insurance commitments and policies, lien searches, and survey documents submitted to or obtained by Broadmark in connection with the loan;
(vi) all correspondence, emails, and other communications between Marcus D. Whitfield, Pinnacle Greystone Capital LLC, Atlantic Yards Development Partners LLC, or any agent thereof, on the one hand, and Broadmark Commercial Lending Corp. (including David Poulos, Loan Officer, and any other Broadmark representative), on the other hand, concerning the loan, the subject property, or any matter related thereto.
Of particular importance, Plaintiffs will demand all documents concerning the events of August 2023 in which Broadmark required updated title and environmental reports as a condition of extending the construction loan maturity date. It was this requirement that led to Mr. Caldwell's discovery of the previously undisclosed $1,340,000 in outstanding New York City real property tax liens against the subject property, as well as the suppressed Phase II environmental contamination findings. All documents reflecting these events—including all communications between the lender and the borrower, all updated reports obtained, and all internal communications among the principals of Atlantic Yards Development Partners LLC—are highly material to Plaintiffs' claims.
D. Tax Lien Records and Title Documents
Plaintiffs will demand all documents concerning the $1,340,000 in outstanding New York City real property tax liens against the subject property at 540-548 Atlantic Avenue, Brooklyn, New York 11217. This category includes:
(i) all title reports, title insurance commitments and policies, and updates thereto obtained at any time in connection with the acquisition, financing, or development of the subject property;
(ii) all lien searches, including any searches of the records of the New York City Department of Finance, the Office of the City Register, or any title company;
(iii) all records from the New York City Department of Finance or any tax lien servicer reflecting the existence, amount, status, or disposition of real property tax liens against the subject property;
(iv) all communications with any title company, title insurance underwriter, tax lien servicer, or governmental agency concerning the tax liens;
(v) all documents reflecting any payments, partial payments, or negotiations relating to the tax liens.
Plaintiffs will specifically demand all documents reflecting Mr. Whitfield's knowledge of the tax liens at or before the time of the May 14, 2021 acquisition of the subject property. As alleged in the Verified Complaint, Mr. Whitfield represented to Mr. Caldwell that the tax liens had been resolved when, in fact, they had not. Documents reflecting the state of Mr. Whitfield's knowledge—including any title reports or lien searches obtained prior to the acquisition—are directly relevant to establishing the scienter element of Plaintiffs' fraud claims.
E. Pro Forma Financial Projections and Rent Roll
Plaintiffs will seek all documents concerning the pro forma financial projections and rent roll circulated by Marcus D. Whitfield in or about March 2021 to Jonathan R. Caldwell in connection with the proposed co-investment in the subject property. As alleged in the Verified Complaint, the pro forma projected $2,160,000 in annual gross rental income at stabilization and a stabilized property value of $31,200,000. Plaintiffs believe these projections were materially inflated and were designed to induce Mr. Caldwell's investment. Accordingly, Plaintiffs will demand:
(i) the pro forma financial projections circulated to Mr. Caldwell, including all versions, drafts, and revisions;
(ii) all working papers, spreadsheets, models, and underlying assumptions used in preparing the pro forma;
(iii) all market studies, comparable rental analyses, comparable sales data, and any third-party reports relied upon or referenced in preparing the pro forma;
(iv) all communications between Mr. Whitfield and any person concerning the preparation, review, or dissemination of the pro forma;
(v) all documents reflecting actual rental income, leases, letters of intent, tenant correspondence, and occupancy data for the subject property from the date of acquisition (May 14, 2021) through the present date;
(vi) all documents reflecting actual operating expenses, capital expenditures, and net operating income for the subject property from the date of acquisition through the present date.
The comparison between the projected financial performance and the actual financial performance of the subject property is at the core of Plaintiffs' fraudulent inducement claim. Defendants' early attention to this category of documents is therefore essential.
F. Atlantic Yards Development Partners LLC — Formation, Governance, and Financial Records
Plaintiffs will demand the full complement of corporate governance and financial records for Atlantic Yards Development Partners LLC (EIN: 87-1253946), the limited liability company formed on April 22, 2021, through which the co-investment was structured. Caldwell Urban Ventures LLC holds a forty percent (40%) membership interest in Atlantic Yards Development Partners LLC, and Pinnacle Greystone Capital LLC holds a sixty percent (60%) membership interest. Plaintiffs will specifically demand:
(i) the Operating Agreement of Atlantic Yards Development Partners LLC, including all amendments, supplements, and side letters;
(ii) the Articles of Organization or Certificate of Formation filed with the New York Department of State, together with any amendments thereto;
(iii) all related agreements governing the co-investment relationship between Caldwell Urban Ventures LLC and Pinnacle Greystone Capital LLC, including any subscription agreements, contribution agreements, or management agreements;
(iv) all financial statements—whether audited, reviewed, compiled, or internally prepared—of Atlantic Yards Development Partners LLC from formation through the present;
(v) all bank statements for every account maintained by or on behalf of Atlantic Yards Development Partners LLC from formation through the present;
(vi) general ledgers, journals, and other books of account of Atlantic Yards Development Partners LLC from formation through the present;
(vii) all capital call notices, capital contribution records, and evidence of capital contributions made by each member;
(viii) all distribution records and evidence of distributions made to each member;
(ix) all communications between Marcus D. Whitfield and Jonathan R. Caldwell, or between Pinnacle Greystone Capital LLC and Caldwell Urban Ventures LLC, regarding the project, the subject property, the entity, or any matter related thereto.
As a forty percent member of the venture entity, Mr. Caldwell and Caldwell Urban Ventures LLC are entitled to access to the books and records of Atlantic Yards Development Partners LLC as a matter of right under the New York Limited Liability Company Law. To the extent Defendants take the position that any of these documents are not subject to disclosure in discovery, Plaintiffs reserve the right to pursue a books-and-records demand under LLC Law § 1102, in addition to their discovery rights under CPLR Article 31.
G. Broad and Catch-All Requests
In addition to the foregoing categories, Plaintiffs intend to serve broad requests encompassing:
(i) all communications—whether by email, text message, instant message, voicemail, letter, or any other medium—between Marcus D. Whitfield and any third party concerning the subject property, the investment, or any of the claims, defenses, or transactions at issue in this action;
(ii) all insurance policies maintained by or on behalf of Marcus D. Whitfield, Pinnacle Greystone Capital LLC, or Atlantic Yards Development Partners LLC, including without limitation any directors and officers ("D&O") liability policies, errors and omissions ("E&O") policies, general liability policies, and any umbrella or excess policies;
(iii) all documents identified in, referenced by, or responsive to the factual allegations set forth in the Verified Complaint filed September 18, 2023.
We recognize that some of these categories are broad, and we are prepared to discuss reasonable search parameters and custodian limitations during our meet-and-confer. However, the breadth of the fraud alleged in this case necessitates broad discovery, and Plaintiffs do not intend to accept artificial limitations on the scope of their document demands.
V. Non-Party Subpoenas
As noted in Section III above, Plaintiffs intend to serve subpoenas duces tecum pursuant to CPLR § 3120 on the following non-parties. We provide the anticipated scope of each subpoena below for your review and comment:
A. Glenmore Realty Advisors Inc. Plaintiffs intend to subpoena Glenmore Realty Advisors Inc. for the following categories of documents: the consulting agreement dated April 30, 2021, with Pinnacle Greystone Capital LLC; all related payment records, invoices, and banking records reflecting receipt of the $370,000 "acquisition advisory fee" or any other payment from Pinnacle Greystone Capital LLC, Atlantic Yards Development Partners LLC, or Marcus D. Whitfield; all communications between Neil Osterberg (or any other representative of Glenmore) and Marcus D. Whitfield, Pinnacle Greystone Capital LLC, or Atlantic Yards Development Partners LLC concerning the consulting agreement, the subject property, or the co-investment; and all work product or deliverables prepared by Glenmore under the consulting agreement.
B. Ridgepoint Environmental Consultants LLC. Plaintiffs intend to subpoena Ridgepoint Environmental Consultants LLC for its complete files relating to the Phase I and Phase II environmental site assessments for 540-548 Atlantic Avenue, Brooklyn, New York 11217, including all reports (draft and final), field notes, sampling data, laboratory results, chain-of-custody documentation, correspondence with any party, engagement letters, invoices, and any supplemental or follow-up assessments or monitoring conducted at the site.
C. Broadmark Commercial Lending Corp. Plaintiffs intend to subpoena Broadmark Commercial Lending Corp. for the complete loan file relating to the $9,620,000 acquisition and construction loan to Atlantic Yards Development Partners LLC, including all applications, commitments, loan agreements, promissory notes, mortgages, appraisals, environmental reports, title reports, title insurance policies, draw request packages, inspection reports, correspondence with the borrower and its principals (including Marcus D. Whitfield and Jonathan R. Caldwell), and all internal credit memoranda and underwriting analyses.
We request that Defendants advise us whether they have any objection to these non-party subpoenas, or whether Defendants wish to coordinate with Plaintiffs in order to avoid unnecessary duplication of effort. We are amenable to reasonable coordination and will provide Defendants with copies of all non-party subpoenas upon service.
VI. Preservation Obligations
We take this opportunity to remind Defendants of their continuing obligation to preserve all documents and electronically stored information relevant to the claims and defenses in this action. This obligation has been in effect since at least September 18, 2023, the date the Verified Complaint was filed, and arguably earlier, given that the dispute between the parties arose no later than August 2023.
The allegations in the Verified Complaint are broad, encompassing concealed New York City real property tax liens in the amount of $1,340,000, a suppressed Phase II environmental site assessment documenting petroleum contamination and estimated remediation costs of $620,000, materially inflated pro forma financial projections, and an undisclosed related-party consulting agreement pursuant to which $370,000 in project funds were diverted to Mr. Whitfield's brother-in-law. The preservation obligation is correspondingly broad and extends to all documents and ESI—including emails, text messages, instant messages, voicemails, calendars, financial records, and metadata—that are potentially relevant to any of these subjects.
We request that Defendants confirm, in writing, that they have issued and are maintaining a comprehensive litigation hold encompassing all relevant custodians. At a minimum, the litigation hold should cover the files and electronic communications of Marcus D. Whitfield and any employees, agents, consultants, or contractors of Pinnacle Greystone Capital LLC who have knowledge of, or were involved in, any of the transactions at issue in this action. The litigation hold should encompass all devices (including personal devices, to the extent used for business communications), email accounts, cloud storage, file servers, and any other repositories where relevant documents or ESI may reside.
Plaintiffs will not hesitate to seek sanctions, including adverse inference instructions, in the event that any relevant documents or ESI are lost, destroyed, or degraded as a result of Defendants' failure to implement and enforce an adequate litigation hold. See CPLR § 3126; Pegasus Aviation I, Inc. v. Varig Logística S.A., 26 N.Y.3d 543 (2015); VOOM HD Holdings LLC v. EchoStar Satellite L.L.C., 93 A.D.3d 33 (1st Dep't 2012).
VII. Proposed Meet-and-Confer
Plaintiffs propose that the parties meet and confer by telephone or videoconference during the week of November 27, 2023, to discuss the following topics:
1. The proposed discovery schedule set forth in Section III of this letter, including any modifications or alternative timelines Defendants wish to propose;
2. Any objections Defendants may have to the categories of documents summarized in Section IV, so that the parties may attempt to resolve any disputes informally before formal demands are served;
3. Coordination of non-party subpoenas to avoid unnecessary duplication and to streamline the production process;
4. Whether the parties wish to negotiate a confidentiality stipulation and/or seek a protective order from the Court, given the potential for commercially sensitive financial information to be produced in discovery. Plaintiffs are amenable to a reasonable confidentiality stipulation modeled on standard commercial litigation protective orders, and we are prepared to circulate a proposed form for Defendants' review;
5. Preparation of a proposed preliminary conference order for submission to the Honorable Patricia Velez, J.S.C., reflecting the agreed-upon (or, if necessary, disputed) terms of the discovery plan.
We would appreciate it if you or your associate, Robert Feinberg, Esq., would contact the undersigned at your earliest convenience to confirm your availability during the week of November 27, 2023. We are flexible as to the date and time and are prepared to accommodate your schedule to the extent possible.
VIII. Reservation of Rights
Plaintiffs expressly reserve all rights to seek additional discovery beyond the categories identified in this letter, including but not limited to additional document demands, interrogatories, depositions, and requests for admission, as the facts developed in discovery may warrant.
Plaintiffs further reserve the right to seek court intervention pursuant to CPLR § 3124 (motion to compel disclosure) or CPLR § 3126 (penalties for refusal to comply with disclosure orders) in the event that Defendants fail to comply with their disclosure obligations, engage in dilatory tactics, or otherwise obstruct the discovery process.
Nothing in this letter is intended to limit, waive, or otherwise affect any of Plaintiffs' claims, rights, or remedies, including Plaintiffs' claims for compensatory damages in the amount of $6,200,000 and for punitive damages as set forth in the Verified Complaint. Plaintiffs' willingness to engage in good-faith discussions regarding the scope and timing of discovery should not be construed as any concession regarding the merits of Plaintiffs' claims or the seriousness of Defendants' conduct.
We sincerely hope that the parties can cooperate to develop a reasonable and efficient discovery framework and avoid unnecessary and costly motion practice. We believe that the proposed schedule and the discovery categories outlined in this letter are fair, proportionate, and well within the bounds of what is material and necessary under CPLR Article 31.
We respectfully request your response at Defendants' earliest convenience, and in no event later than November 22, 2023. If we do not receive a response by that date, we will proceed to serve our First Set of Document Demands and will request a preliminary conference with the Court to establish a discovery schedule.
Thank you for your attention to this matter. We look forward to hearing from you.
Respectfully submitted,
CALDERWOOD & HARKNESS LLP
By: ________
Patrick Gallagher, Esq. Calderwood & Harkness LLP 599 Lexington Avenue, 34th Floor New York, New York 10022 Direct: (212) 558-4127
Email: pgallagher@calderwoodharkness.com
cc (via email):
Douglas Carmichael, Esq. (Calderwood & Harkness LLP) Francesca Morano, Esq. (Calderwood & Harkness LLP) Robert Feinberg, Esq. (Ridgeway, Tanaka & Schiff LLP) Jonathan R. Caldwell (via separate cover)

CALDERWOOD & HARKNESS LLP Attorneys at Law

CALDERWOOD & HARKNESS LLP

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