LET Defendant, Messier Partners LLC, or its attorney, Show Cause before this Court at IAS Part -, to be held in and for the County of New york, at the courthouse, 60 centre street, New york, New York. Or a soon thereaRcr as should not be compelled to furnish its books and records to el for inspection pursuant to New York limited liability company Law 0 1 102@) and 6 Delaware Code 0 18-305.
LET Defendant, Messier Partners LLC, or its attorney, Show Cause before this Court at IAS Part -, to be held in and for the County of New york, at the courthouse, 60 centre street, New york, New York. Or a soon thereaRcr as should not be compelled to furnish its books and records to el for inspection pursuant to New York limited liability company Law 0 1 102@) and 6 Delaware Code 0 18-305.
LET Defendant, Messier Partners LLC, or its attorney, Show Cause before this Court at IAS Part -, to be held in and for the County of New york, at the courthouse, 60 centre street, New york, New York. Or a soon thereaRcr as should not be compelled to furnish its books and records to el for inspection pursuant to New York limited liability company Law 0 1 102@) and 6 Delaware Code 0 18-305.
State of New York, County of New York, held in and for the County of New York, at the Courthouse thereof, at 60 Centre Street, New York, New York, on the - day of February, 2007. PRESENT: Hon. , J ustice SUPREME COURT OF THE STATE OF NEW YORK 22,2007, together with all of the exhibits annexed thereto, LET Defendant, Messier Partners LLC ('Messier Partners" or "), or its attorney, show cause before this Court at IAS Part -, to be held in and for the County of New York, at the courthouse, 60 Centre Street, New York, New York, in Room , on the day of March, 2007, at co Phi& for inspection pursuant to New York Limited Liability Company Law 0 1 102@) and 6 Delaware Code 0 18-305 in accordance with NaktifEs lawful noon of that day, or a soon thereaRcr as should not be compelled to furnish its books and records to el can be heard, why ! ZOW pt . h tip 4Lh therefore; it is further ORDERED, that pending the hearing of this motion Messier Partners and its controlling member J ean-Marie Messier, its employees, and all other persons with notice herewith Supreme Court Records OnLine Library - page 1 of 24 I * * 8 * I are hereby restrained and prohibited from transferring or disposing of lkfhdmb 's books and records for the years 2004-2007; and it is further ORDERED, that service of a copy of this order and the papers upon which it is based and day of February, 2006, by serving copies Messier Partners LLC at One Rockefeller Plaza, Suite 1502, New York, NY the undertaking herein, be made on or before the thereof on 10020, by hand. &nt Entered: J.S.C. GAPS Cllenta\hyt\Ordar to Show Cause 2 - 2 3 4 7 . d ~ - 2 - Supreme Court Records OnLine Library - page 2 of 24 T r t 4 Index No.: Jg---<T-& OF FATINE LAYT FOR AN ORDER COMPELLING ACCESS TO BOOK$ AND RECORDS 1. Fatine Layt (%ktW or Layt), an individual residing in France, makes the following to compel Messier Partners LLC (Defendant or WF ), a Delaware limited liabili York, to grant access to Pkrrt&t to its books and records pursuaptto 6 Delaware Code 01 8-305 and N.Y. Limited Liability Compmy Law 6 1 102(b).2 any with its only office at One Rockefeller Plaza, New York, New /Le&) %$ a? 4&w 2J* I 1 6 Delaware Code 518-305 provides in pertinent part as follows (eqhasi@@@ * 1 . ; (a) Each member of a limited liability company has the right, subject to such reaso forth in a limited liability company agreement or otherwise established by the m by the members, to obtain from the limited liability company from time to time upon reasonable demand for any purpose reasonably related to the members interest as a member of the limited liability compahy: (1) True and full information regarding the status of the business and financial condition of the limited liability company; (2) Promptly after becoming available, a copy of the limited liability companys federal, state and local income tax returns for each year; (3) A current list of the name and last known business, residence or mailing address of each member and manager; (4) A copy of any written limited liability company agreement and certificate of formation and all amendments thereto, together wi thexecuted copies of any written powers of attorney pursuant to whch the limited liability company agreement and any certikate and all amendments thereto have been executed; (5) True and full dormation regarding the amount of cash and a description and statement of the agreed value of any other property or services contributed by each member and which each member bas agreed to contribute in the future, and the date on which each became a member; and (6) Other information regarding the affairs of the limited liability company as is just and reasonable. N.Y. Limited Liability Company Law $1 102@) provides as follows (emphasis added): @) Any member may, subject to reasonable standards as may be set forth in, or pursuant to, the operating agreement, inspect and copy at hs or her own expense, for anypurpose reasonably related to the members interest as a member, the records referred to in subdrvision (a) of this section, any financial statements maintained by the limited liability company for the three most recent fiscal years and other information regarding the aflairs of the limited liability company as is just and reasonable. Supreme Court Records OnLine Library - page 3 of 24 r T 8 ~ - 2 - r&tionw 2. Based on the facts set forth in the attached affidavit 2007 (the Layt Affidavit or Lap Aff.), and the exhibits thereto, the books and records of defendant pursuant k p /+I t-- member of bm&nt owning a 25% interest in reasonably related to the members interest as a member for examining s books and cinyd records, and (c) the books and records I haUseeks to investigating her claims of diversion or misuse of defendants funds, to valuing P k k W s interest in Mp , and to calculating and paying her share of taxes on M l s income. 6 Del. Code 4 18-305; N.Y. Limited Liability Company Law 61 102(b). 3. 43ekkdW Messier Partners is majority owned by J ean Marie Messier. Mr. Messier was previously the Chief Executive Officer of the large French public company Vivendi Universal S.A. (Vivendi). As a result of his improper conduct at Vivendi, in 2002, Mr. Messier was removed from his position as CEO of Vivendi. Under a consent decree he signed with the US. Securities and Exchange Commission, he was compelled to relinquish nearly $25 million in severance payments from Vivendi and banned by the SEC from acting as an officer or director of any US. publicly traded companies. A copy of press release issued by the SEC concerning this matter is attached to the Layt Affidavit as Exhibit A. Set Layt Aff. 76. 4. In addition, Messier is a defendant inlitigation brought by Vivendi shareholders allegedly injured by the drop in price of Vivendi stock during Mr. Messiers tenure. &g Layt Aff. 78. 5. Following his departure from Vivendi, in2002 Messier established a consulting firm to render advice in the area of mergers and acquisitions, named Messier Partners LLC, in New York. Stc Layt Aff. 79. Supreme Court Records OnLine Library - page 4 of 24 * 4 r .. f I fQ-47 t; D d l w . . 6. In 2003, Mi . Messier first approached PkM&t bout becoming involved in the consulting business he had established and she initially purchased a 20% interest therein. In addition, Layt and Messier established two more companies, Messier Partners SAS (France) (Messier France) in Paris, and Messier Partners SA (UK) (Messier UK) inLondon (with Messier Partners LLC, the Messier Companies). pleamtlfflater purchased an additional 5% p+,&hw interest in Defendant and currently owns 25% of each of the Messier Companies. Layt Aff, 7. The onlv office of Mp is located in One Rockefeller Plaza in New York. +v.P*t- 4kfcdmkonducts its business activities from this office with the regular involvement of the office of Messier France where Layt was located. & Layt M. 71 1. FWh t 8. The consulting services furnished by4cfoadapt are furnished in New York and Paris. See Layt Aff. 712. 9. Messier frequently contacted-by e-mail or phone fiom the office of MP in New York. See Layt Aff. 713. Layt also had duties relating to MEs projects originating in New York. & Layt Aff. 114. Proof of P h M W s Membership Status in MP 10. Mrs. Layt is clearly the owner of a significant membership interest i m . In 2004, plaintiff purchased a 20% interest in defendant from Messier which was to be paid for by reducing the future profit distributions she would receive fkom p @ & g U l t ; . See Layt Aff. 715. @+mh t- 11. To confirm Layts status as a member of J2&daat , Messier sent Lap a Written Consent For The Transfer of Interest In Messier Partners LLC signed by Messier, as Managing Member of Messier Partners LLC. & Layt Aff. Exhibit 73. This document states: Pursuant to Article I V sections 6.01 and 6.02 of the Messier Partners LLC limited liability operating agreement, I, Jean Marie Messier, in my capacity as the managing member of Messier Partners LLC, - 3 - Supreme Court Records OnLine Library - page 5 of 24 0 T hereby consent to the transfer of a twenty percent interest in Messier Partners LLC from J ean Marie Messier to Fatine Layt. The effective date of the transfer is January 1 , 2004, on which day Fatine Layt shall be admitted as a member of qe limited liability company. u y i - pA-d-ioaclr 12. t en proceeded to pay PhrnM distributions of its profit on account of her membership interest in Mp for 2004 and 2005 on the basis of pktm@owning a 20% inter st in that company. In October 2005, F%rrWacquired an additional 5% interest in last distribution H&ifreceived due to her ownership interest in l bf- d- i o4J &t i o w- &&. The was paid on January F&kOmc/ 23,2006 (relating to 2005 profits) in the amount of Euros 750,000 (about $900,000) which equaled 25% of $L f y- i 4Wf rofits reflecting I?kw&&Fs 25% ownerslup interest in - See Layt Aff. y17. 13. MP distributed its income to Layt on the following dates: Year/ LaYt LaYt Messier Distribution # Percentage Amount Percentage 2004-1 Sept. 15,2004 20% $100,000 80% 2005-1 Jan. 24,2005 20% $15,000 80% 2005-2 Sept. 15,2005 21% 127,006 79% 2005-3 Sept. 19,2005 21% 5 85,704 79% 2005-4 Oct. 18,2005 21% 126,759 79% 2005-5 Dec. 20,2005 25% 1,000,000 75% 2006-1 Jan 23,2006 25% 750,000 75% (See Layt Aff, 718). 14. Copies of the statements from Mp confuming plaintiffs 20%, and later 25%, equity interest in MY, and showing that Mp made the above profit distributions based thereon to Layt are annexed to the Layt Affidavit as mb i t C, Messier also received these profit distribution letters. Layt Aff. 15. As further proof of s equity interest in MP, Layt received the 2004 Form 1065 (U.S. Return of Partnership Income) of MP. Stt Layt Aff. Exhibit D. Messier signed -4- Supreme Court Records OnLine Library - page 6 of 24 1 c 4 this return certifying underpenalty ofperjury that the statements made therein, including the statement that a 20% interest in Mp, were true. See Layt 9 720. perC-r.hayuf 16. Page 2 of the Mps K-1 form attached to the return lists pknrrtWas 20% owner and lists Layts address as c/o Messier Partners LLC, One Rockefeller Plaza, New York, N.Y. Layt Aff. 721. 17. Moreover, Messier has acknowledged PkthtS as a minority shareholder in other on December 1,2005 to Mps / LJ&h&/ writings. For example, Messier sent an e-mail (copied to tax consultant in which Messier: (a) acknowledges that -is a 20% shareholder; and (b) MhJnw states that ths is without any specific U.S. shareholder agreement. See Layt Aff. Exhibit E. and Layt Aff. 722. 18. In September 2005, b z u i r e d an additional 5% interest in MP. Only recently has Messier claimed for the first time that Layt is not a member of MP, despite the tax returns of Mp and other documents from him stating otherwise. & Layt Aff. 723. 19. Indeed, Messers claim that Layt does not own an interest in t is belied by a letter he wrote just days ago in which he acknowledged that Layt was entitled to 20% of h4Fs profits for 2006. (See copy of letter dated February 14,2007 from Messier ta Layt attached as Exhibit A to annexed Affirmation of Patrick P. Salisbury, Esq. dated February 22,2007). Termination and Fraud by Mr. Messier 20. Disputes arose between Messier and Layt in 2006. These disputes involved Messiers improper use of the companys funds to pay his personal legal fees not relating to company business and ,fo pay expenses incurred by his latest girlfriend, Crista1 Delaval, for her personal travel. S believes these improper payments exceeded $150,000 through the latest ~4 l ~w - . . date for which she has financial information from Mp . & Layt Aff. 724. - 5 Supreme Court Records OnLine Library - page 7 of 24 I - L / I c@f l Qm t- 21. Additionally, Mp became far more profitable in 2006. 3dBRhnt is believed to have earned at least $12 million in 2006 (some of which may have been booked in other Messier Companies), of which Naidffs 25% share would be $3 million. Messier refused to distribute Layts share of these profits or even to show FMnMthe records of the company which would allow her to determine how much she is due. Stc Layt Aff. 725. ~ . h oqw3 P &l4drlWJ 22. In October 2006, while these disputes were on-going, Messier dismissed Layt from her position in Messier France on a pretextual basis due to her objections concerning Messiers improper use of funds from MP for his personal expenses and her demand for her twenty-five percent share of the profits at Mp . See Layt Aff. 726. a& . . 23. Priorto dismissal, Messier had employed his girlfriend, Ms. Delaval, as a consultant of MP, despite her complete lack of experience in the mergers and acquisitions area. Messier paid this girlfriend many tens of thousands of dollars of3dcnch& funds without plaintiffs consent. Mp continues to employ Ms. Delaval and pays her substantial sums solely because of her close personal relationship wit Messier. @pflM Layt M. 727. /&Lc 24. Following her dismissal, l&kktiR became aware of the diversion of other funds from Mps profits to pay the personal expenses of Messier or expenses of other Mi . Messier ventures. See Layt Aff. 728. f&ti O d W 25. Perhaps even more importantly, Phkti4Zbecame aware of extremely improper pYJp.l nof9bl t conduct by Messier in which he, through acquisition transactions involving major publicly traded companies. This advising both sides was not disclosed by Messier to the clients and was wholly improper. Set Layt Aff. 728. , provided advice to both sides in large 26. Layt has also become aware of potentially improper commissions being paid by Messier using MP s funds to representatives of MP s clients relating to advisory work being - 6 - Supreme Court Records OnLine Library - page 8 of 24 I 3 FQ-yB b4-j performed by Messier, through -for both sides of large transactions involving major public companies. @ Layt Aff. p. 8). /b(-l F-; B M W Y s Request for Access to Defendants Books and Records Denialof PhfhKHY a 27. Following Layts dismipsal, she retained her membership interest in and 1 , A &-loy the other Messier Companies. cpeatedly requested information from Messier regarding the financial affairs of Be&&mh n which she still owned a 25% interest. After Messier refused to provide any information, w4d- was forced to engage U.S. counsel to request access to the books and records of Messier Partners on her behalf. Stt Layt Aff. 729 and Exhibit F. 28. In Messier demanded that first request for access to the financial records of MP, prove that she was a member of Mp . See Layt Aff. Exhibits F and Exhibit G. Notably, this is an entity with just two owners, Messier and Layt. In his letter, Messier did not deny that Layt was a member of MP. A copy of the first letter from counsel requesting financial information dated October 25,2006 and Messiers responsive letter dated October 27,2006 are attached to the Layt Affidavit as Exhibits F and G. Layt Aff, 130). 29. Subsequently, Messier claimed through his New York attorney in a telephone call that Layt was only an employee, suggesting that he could somehow terminate her ownership interest in Mp . A copy of counsels letter dated January 18,2007 summarizing that phone call is attached to the Layt Affidavit as Exhibit H. (!&g Layt Aff. 73 1). Ph.ciPyld 30. Ultimately, Mp agreed to let&m&k eview only the tax returns of Messier Partners for 2004,2005 and 2006 (when it becomes availabl .) Messier knows that Layt already has the 2004 and 2005 US. tax returns of l hkhrd, and thus proposes giving Layt nothing as the b p 9 w + + 2006 tax return is not available now and will not be available for months. A copy of this letter dated January 22,2007 is attached to the Layt Affidavit as Exhibit I, ( & Layt fdf. 732). - 7- Supreme Court Records OnLine Library - page 9 of 24 31. Inview claim that some of MFs information is confidential, h - w b w c r willing to execute a confidentiality order regarding any client information of Mp and to abide by any other restrictions on review of that information that the court may deem appropriate. (See Layt Aff. 733). Fht hrt Ws Lawful Demands for Inspection 32. In his October 25,2006 letter to Messier Partners, counsel wrote (See Layt Aff. Exhibit F): Pursuant to such statute, Mrs. Layt hereby demands access to all of the financial statements of Mp , including but not limited to all balance sheets, profit and loss statements and statements of cash flows since inception, together with a copy of all of Mp s federal, state and local income tax returns. Moreover, Mrs. hyt requests copies of all documents demonstrating MP s compliance with all federal, state and local licensing statutes governing the operation of MPs business activities. In particular, Mrs. Layt requests copies of any applicable investment advisory, or investment banking licenses held by MP. The purpose of this request is for Mrs. Layt to determine whether MP is being operated in accordance wi th applicable law and to determine the value of her interest in MP. 33. On January 18,2007, counsel repeated Plaintiffs request for access to the: . . .complete records of Mp. This includes access to Mp s financial statements, bank account statements, tax returns, documents evidencing any so-called bonuses, commissions or other payments of any kind to employees or third parties, copies of all engagement letters (including the engagement letter with Publicis) and any documents purporting to issue membership interests or amend the Operating Agreement of policies of MP. See Layt Aff. Exhibit H. This Court Has Jurisdiction Over MP 34. The Layt Affidavit confirms that cd in New York.J3&@$s only office is at One Rockefeller Plaza. Messier himself lives at 228 E. 67 Street, New York, - 8 - Supreme Court Records OnLine Library - page 10 of 24 I * I L v i N.Y., and previously lived at 160 East 66th Street and 5 15 Park Avenue, New York, N.Y. See Layt Aff. 75 and Exhibit C. Messier Partners business is conducted in or from New York, with assistance from the Paris office. See Layt Aff. flll-14. 35. Where a Delaware limited liability company is based in New York, an owner may bring in action inNew York under N. Y, Limited Liability Company Law 5 1102(b) to compel access to the Delaware companys books and records. Sachs v. Adeli, 2005 N.Y. Slip opp. 9049, 26 A.D. 3d 52,804 N.Y.S. 2d 731 (First Dept November 29,2005). In SachS, the First Department ruled that the substantial New York contacts warranted the exercise of jurisdiction over the Delaware company. 26 A.D.3d at 55, 804 N.Y.S.2d at 733. Mer noting that Delaware Code 6 18-305 is substantially similar to Section 1 102(b), the Sachs court went on to cite Delaware case law (Somerville S Trust v, TJSV Pmer$. 2002 Del. Ch. LEXIS 103 (New Castle 2002)) on inspection of books and records with approval. 26 A.D.3d at 58,804 N.Y.S.2d at 735. The court ordered access to the books and records of the Delaware limited liability company. 36. Here, as in Sachs, this Court has jurisdiction over ME because limited liability company based in New York which conducts its business from New York. Satisfaction of Statutow Renuirements 37. The Layt Affidavit also establishes that has more than one purpose reasonably related to the members interest as a member of MY, and that such documents are essential for the purposes identified. N. Y. Limited Liability Company Law 5 1 102(b); 6 Del. Code 618-305. &g Sachs, 26 A.D.3d at 56-57, 804 N.Y.S.2d at 733-734. See also Sornefille S Trust, supra, 2002 Del. Ch. LENS 103; Arbor Place. L,P . v. EDCQ re Opp~ rtunitv Fund LLC, 2002 Del. Ch. LEXIS 102 (New Castle 2002). 38. Courts have recognized that the investigation of specific claims of waste and mismanagement constitutes a legitimate reason to examine a companys books and records, - Y - Supreme Court Records OnLine Library - page 11 of 24 I O r including tax records. Sachs, 26 A.D.3d at 58, 804 N.Y.S.2d at 735 ([tlhe possibility of fraud goes directly to the plaintiffs interest in [the company]); Thomas & Be#$ Corn, v, Lcviton Manufacturinn Co.. Inc., 685 A.2d 702,710. (Del. Ch. Newcastle 1995) {suit for inspection of corporate books under access provision of 8 Del. Code $220). The purpose of valuing ones interest in a non-public company is also a valid basis to inspect the books and records. Thomas & Betts, supra, at 713. The risk that confidential information might be discussed is not, in and of itself, a basis to refuse access to an owner, especially where the plaintiff has agreed to execute a confidentially agreement. u. at 709-71 0. 39. Layt has also shown that the documents she seeks are essential for the purposes Layt has identified - establishing and valuing her interest as a member, investigating evidence of misuse of company funds, and the accurate payment of her taxes. & Layt Aff., pp. 7-9. 40, In response to that Layt works for a competitor, Layt is willing to execute a confidentially agreement and to comply with other reasonable restrictions with respect to her review of Mp s books and records. & Layt AK 733. The Necessity of the Books and Records Requesteg &kipnw 41. Wdl!ft% is entitled to inspect the books and records necessary to investigate her claims. See Sachs, 26 A.D.3d at 56-57, 804 N.Y.S.2d at 734; Somerville S Trust 2002 Del. Ch. LEXIS at *27. Moreover, whcn there is evidence of mismanagement, a more wide-ranging inspection may be justified. Freund v. Lucent T ec h~l ~n e$, Inc., 2003 Del. Ch. LEXIS 3, *14- * 16 (New Castle 2003) (shareholder inspection of books and records under 8 Del. Code 5220) (the order allowing plaintiffs requested books and records inspection will be limited to those documents reasonably required to satisfy the purpose of the demand (citation omitted)). - 10- Supreme Court Records OnLine Library - page 12 of 24 m r Establishment and valuation of ownership: Mif; . . 0 4 L r 42. F%mhfhetds to examine the files of MP relating to the payments made to Layt and the corporate records of Mp which will demonstrate Layts ownership interest in Mp . In addition, to value Layts interest in Mp , Layt needs to see all of Mp s advisory agreements with clients, its bank account statements which will show receipts and payments, and the accountants work papers which will provide the information on the finances of Mp needed to value Mp . As a consulting company MPs value is almost entirely based upon the revenue from consulting agreements. 43. MP has used MPs funds to pay Messiers personal legal fees in other matters related to Messiers many difficulties while at his previous at Vivendi. These attorneys did no work for MP. A review of the attorneys billing statements paid by Mp will demonstrate that the legal work paid for by Mp was unrelated to MP s business. 44. MP also employed Messiers girlfriend, Delaval, for personal purposes and paid her with MP s funds. Delaval provided no services to Mp and has no experience in the merger and acquisitions business in which MP is involved. Del. Ch. LEXIS 18 1 (New Castle No. 18,2005) (plaintiff entitled to inspect documents relating to Sutberland v. Dardanelle Lumber Co., 2005 salary and benefits received by relatives of founder). Mp also paid extensive costs for Delaval to accompany Messier to such places as the Dominican Republic where Delaval has a vacation home, but where Mp does no business. As detailed above, Layt has become aware of other payments siphoned from Mp for purposes unrelated to the consulting business of u. In &ywht- order to investigate the potential diversion of substantial profits fiom MI? and the other misuse of Mp by Messier, Layt needs to examine the expenses paid by ddmdanband documents connecting h , b d b r i 11 - Supreme Court Records OnLine Library - page 13 of 24 ' c i I L) such payments to defendant's legitimate consulting projects. Set Somerville S Trust, 2002 Del. Ch. At *27-*34. Determination of nrgfit for filing tax return: 45. Finally, Layt needs access to the financial records of Mp to determine Mp's actual income, including only valid deductible expenses, in order to pay U.S. income taxes on Layt's share of the profits in the United States. Layt paid her previous U.S. taxes, but plaintiff has no information on which to base her 2006 tax payments. A limited liability company such as &$D&+- is taxed as a "partnership" for US. income tax purposes. Therefore, Layt must pay tax on her 25% of its earnings even if these amounts are not distributed to her. Further, if Mp has improperly reduced its profits by improperly deducting payments made by MP at Messier's direction for his personal legal expenses, and/or the personal expenses of his girlfiend, etc, MP may have underreported its income, subjecting Layt to possible civil or criminal penalties. Without access to s financial records, Layt cannot determine her U.S. tax liability for 2006. & Xachs, 26A.D. 3d at 58,804 NYS 2d at 735 (ordering access to tax records). 46. No previous application has been made for ectfully requested that the compel access to and records as identified herein be granted, together with such other and further relief as the Court deems just and proper. Dated: New York, New York February 23,2007 0: WS ClicntaVmytMpplication.doc By: George Schwab (GS 6153) Salisbury & Ryan LLP 1325 Avenue of the Americas, Suite 704 New York, New York 10019 T: 212-977-4660//F: 212-977-4668 - 12- Supreme Court Records OnLine Library - page 14 of 24 SUPREME COURT OF TJXE STATE OF NEW YORK COUNTY OF NEW YORK FATINE LAYT, Plaintiff, -against-- MESSIER PARTNERS LLC, Defendant. I t Index No.: AFFIDAVIT OF FATINE: LAYT IN SUPPORT OF APPLICATION FOR ACCESS TO COMPANY FWCORDS STATE OF NEW YORK ) COUNTY OF NEW YO=) ) ss.: Fatine Layt, being duly sworn, deposes and says: 1. I am a citizen of France and reside at 95 rue Monceau, 75008 Paris, France. I am a member of Defendant Messier Partners LLC (Defendant or MI) and own a twenty-five percent (25%) equity interest therein. As such, I am the minority member of the Defendant. The only other member is Jean-Marie Messier who owns the remaining 75%. 2. I am over the age of 18 and make this affidavit on personal knowledge, in support of my motion as member of MP for access to the books to records of Mp pursuant to Delaware Code 5 18-305 and N.Y. Limited Liability Law 5 1 102(b). 3. Defendant is a Delaware limited liability company located at One Rockefeller Plaza, New York, N.Y. 4. Defendants majority shareholder is Jean-Marie Messier (Mi. Messier). 5. Upon information and belief, Mr. Messier currently resides at 228 E. 67th Street, New York, N.Y. Mr. Messier previously lived at 160 E. 66* Street, New York, N.Y. and 5 15 Park Avenue, New York, N.Y. Supreme Court Records OnLine Library - page 15 of 24 D r * * 6. Mr. Messier was previously the Chief Executive Officer of the large French public company Vivendi Universal S.A. (Vivendi). As a result of his improper conduct at Vivendi, in 2002 Mr. Messier was removed from his position as CEO of Vivendi. Under a consent decree he signed with the U.S. Securities and Exchange Commission, he was compelled to relinquish nearly $25 million in severance payments fiom Vivendi and banned by the SEC fiom acting as an officer or director of any U.S. publicly traded companies. A copy of press release issued by the SEC concerning this matter is attached hereto as Exh ibit A. 7. Mr* Messier was also fined more than $1 million by the French regulatory equivalent of the SEC for his conduct at Vivendi. 8. Mr. Messier is a defendant in litigation brought by Vivendi shareholders allegedly injured by the drop in price of Vivendi stock during Mr. Messiers tenure. Establishment of Mesg ier Partners LLC i n New YQrk 9. Following his departure from Vivendi, in 2002 Mr. Messier established a consulting firm to render advice in the area of mergers and acquisitions named Messier Partners LLC in New York, 10. In 2003, Mi. Messier first approached me about becoming involved in the consulting business he had established and we created two more companies, Messier Partners SAS (France) (Messier France) in Paris, and Messier Partners SA (UK) (Messier UK) in London (with Messier Partners LLC, the Messier Companies). I currently own 25% of each of these companies. 1 1. The only office of Defendant MP is located in One Rockefeller Plaza in New York. Defendant conducts its business activities from this office with the regular involvement of the office of Messier France where I was located. - 2 - Supreme Court Records OnLine Library - page 16 of 24 m t 1 I * 12. The consulting services furnished by Defendant are furnished in New York and Paris. 13. M. Messier frequently contacted me by e-mail or phone from the office of Messier Partners in New York 14. I also had duties relating to Messier Partners projects originating in New York. Proof of Plaintiffs Membership Status in I vl I p 15. In 2004, I purchased a 20% interest in Defendant from Mi . Messier which was to be paid for by reducing the future profit distributions I would receive from Defendant. 16. To confirm my status as a member of Defendant, Mr. Messier sent me a Written Consent For The Transfer of Interest In Messier Partners LLC signed by Mr. Messier, as Managing Member of Messier Partners LLC. A copy of this transfer document is attached to this affidavit as Exhibit B. This document states: Pursuant to Article 1V sections 6.01 and 6.02 of the Messler Partners LLC limited liability operating agreement, I, Jean Marie Messier, in my capacity as the managing member of Messier Partners LLC, hereby consent to the transfer of a twenty percent interest in Messier Partners LLC from Jean Marie Messier to Fatine Lap. The effective date of the transfer is January 1,2004, on which day Fatine Layt shall be admitted as a member of the limited liability company. 17. Defendant then proceeded to pay me distributions of its profit on account of my membership interest in MP for 2004 and 2005 on the basis of my owning a 20% interest in that company. In October 2005, I acquired an additional 5% interest in Defendant. The last distribution I received due to my ownership interest in Defendant was paid on January 23,2006 in the amount of Euros 750,000 (about $900,000) which was 25% of Defendants profits reflecting my 25% ownership interest in Defendant. - 3 - Supreme Court Records OnLine Library - page 17 of 24 S t 3 18. Messier Parhers distributed its income to me on the following dates: Yearf mu t i o n # . . 2004- 1 2005-1 2005-2 2005-3 2005-4 2005-5 2006- 1 Sept. 15,2004 Jan. 24,2005 Sept. 15,2005 Sept. 19,2005 Oct. 18,2005 Dec. 20,2005 Jan 23,2006 LaYt PerctmtaKe 20% 20% 21% 21% 21% 25% 25% LaYt A!mm $100,000 $1 5,000 127,006 585,704 126,759 1,000,000 750,000 Messier F!!YUaw 80% 80% 79% 79% 79% 75% 75% 19. Copies of the statements from MP confirming my 20%, and later 25%, equity interest in MP and showing that MP made the above profit distributions based thereon to me are annexed hereto as Exhibit C. Mr. Messier also received these letters. 20. As further proof of my equity interest in Mp , Furthermore, I received the 2004 Form 1065 (U.S. Return of Partnership Income) of Messier Partners, a copy of which is attached as Exhibit D. Mr. Messier signed this return certifying underpenalty ofperjuy that the statements made therein, including the statement that I owned a 20% interest in MP, were true. 2 1. Page 2 of the Messier Partners K- 1 form attached to the r em lists me BS 20% owner and lists my address as c/o Messier Partners LLC, One Rockefeller Plaza, New York, N.Y. 22. Moreover, Mr. Messier has acknowledged me as a minority shareholder in other writings. I attach an email dated December 1,2005 fiom Mr. Messier to Messier Partners tax consultant (and copied to me) in which Mr. Messier: (a) acknowledges that I am a 20% shareholder; and @) states that this is without any specific U.S. shareholder agreement. A copy of Mr. Messiers e-mail is attached hereto as Exhibit E, - 4 - Supreme Court Records OnLine Library - page 18 of 24 B I 23. In September 2005, I acquired an additional 5% interest in MP. Only recently has Mr. Messier claimed for the first time that I am not a member of ME, despite the tax returns of MP and other documents fiom him stating otherwise. wmi nat i on and Fraud bv Mr. Megsier 24. Disputes arose between Mr. Messier and me in 2006. These disputes involved Mr. Messiers improper use of the companys funds to pay his personal legal fees not relating to company business and to pay expenses incurred by his latest girlfriend, Crista1 Delaval, for travel. I believe these improper payments exceeded $150,000 through the latest date for which I have financial information from MP. 25. Additionally, MP became far more profitable in 2006. It is my belief that Defendant earned $12 million in 2006 (some of which may have been booked in other Messier Companies), ot which my share would be $3 million. Mr. Messier rehsed to distribute my share of these profits or even to show me the records of the company which would allow me to determine how much I am due. 26. In October 2006, while these disputes were on-going, Mr. Messier dismissed me from my position in Messier France on a pretextual basis due to my objections concerning his improper use of funds from Mp for his personal expenses and my demand for my twenty-five percent share of the increased profits at Mp . 27. Prior to my dismissal, Mr. Messier had employed his girlfriend, Ms. Delaval, as a consultant of Messier Partners, despite her complete lack of experience in the mergers and acquisitions area. He paid this girlfriend many thousands of dollars of Defendants funds without my consent. MP continues to employ Ms. Delaval and pays her substantial sums solely because of her close personal relationship with Mr. Messier. - 5 - Supreme Court Records OnLine Library - page 19 of 24 other funds from MP profits to pay the personal expenses of Mr. Messier or expenses of other Mr. Messier ventures. Perhaps even more importantly, I became aware of extremely improper conduct by Mi. Messier in which he, through Mp , provided advice to both sides in large acquisition transactions involving major publicly traded companies. This advising both sides was not disclosed by him to the clients and is wholly improper. Denial of Mv Renuat for Accw to Defeadante Boob and Records 29. Following my dismissal, I retained my membership interest in Defendant and the other Messier Companies. I repeatedly requested information from Mr. Messier regarding the financial affairs of Defendant in which I still owned a 25% interest. He refused to provide any information. I then engaged the New York law firm of Salisbury & Ryan LLP to request access to the books anarecordmfM i-asi j m m York and Delaware law. I 30. In response to my attorneys first request for access to the financial records of MP, Mr. Messier asked that I prove that I was a member of MP. Notably, this is an entity with just two owners, Mr. Messier and I. In his letter Mr. Messier did not deny that I was a member of Messier Partners. A copy of the first letter from my attorney requesting financial information dated October 25,2006 and Mr. Messiers responsive letter dated October 27,2006 are attached as Exhibits F and G. 3 1. Subsequently, Mr. Messier claimed through his New York attorney in a telephone call that I was only an employee, suggesting that he could somehow terminate my ownership interest in Mp . A copy of my attorneys letter dated January 18,2007 summarizing that phone call is attached as Exhibit H, - 6 - Supreme Court Records OnLine Library - page 20 of 24 I 1 f * 32. Ultimately, MP agreed to let me review only the tax returns of Messier Partners for 2004,2005 and 2006 (when it becomes available,) Mi . Messier knows that I already have the 2004 and 2005 U.S. tax returns of Defendant, and thus proposes giving me nothing as the 2006 tax return is not available now and will not be available for months. A copy of this letter dated January 22, 2007 is attached as Exhibit 9. 33. In view of Defendants further claim that some of Mp s information is confidential, which I regard as a transparently pretextual, I am willing to execute a confidentiality order regarding any client information of Mp and to abide by any other restrictions on review of that information that the court may deem appropriate. Purmw for the Reqeestfx! Ex amination and Necessary Documents (a) To Establish and Value M y Owners hip Meres t in the Company. biven that Messier Partn em has denied that 1 have an ownership interest in the company, I need to examine the files of Messier Partners relating to the payments made to me and the corporate records of Mp which will demonstrate my ownership interest in MP. In addition, to value my interest in MP, I need to see all of MPs advisory agreements with clients, its bank account statements which will show receipts and payments and the accountants work papers which will provide the information on the finances of MP needed to value MP. .. (b) To Investigate Diversion and Misuse Q f Messier Partners funds by Mr. Messier. Mr. Messier clearly used MPs fimds to pay his legal fees in other matters related to Mr. Messiers many difficulties while at Vivendi. These attorneys did no work for MP. A review of the attorneys billing statements paid by MP will demonstrate that the legal work paid for by MP was unrelated to MPs business. -7- Supreme Court Records OnLine Library - page 21 of 24 I 1 1 Mr. Messier also employed his girlfriend, Ms. Delaval, for personal purposes and paid her with MPs funds. Ms. Delaval provided no services to Mp and has no experience in the business in which MP is involved. Mr. Messier also used MPs finds to pay for extensive and costly international travel by Ms. Delaval who accompanied Mr. Messier to such places as the Dominican Republic where she lives and where the MP does no business. I have become aware of other payments siphoned from MF for purposes unrelated to the consulting business of Defendant. I have also become aware of potentially improper commissions being paid to representatives of clients relating to advisory work being performed by Mr. Messier, through Defendant, for both sides of large transactions involving major public companies. In order to investigate the potential diversion of substantial profits from Mp and the other t improper business activities 01 Mr. Messier, 1 need to examine the expenses paid by Uetendant and documents connecting such payments to Defendants consulting projects. (c) To Determine Income of Messier P me rs in Order to Pay Mv U.$, Inc~m e Tax. Finally, I need access to the financial records of Mp to determine Messier Partners actual income, including only valid deductible expenses, in order to pay U.S. income taxes on my share of the profits in the U.S. I paid my previous U.S. taxes, but have no informatian on which to base my 2006 taxpayments. A limited liability company such as Defendant is taxed as a partnership for U.S. income tax purposes. Therefore, I must pay tax on my 25% of its earnings even if these amounts are not distributed to me. Further, if MP has improperly reduced its profits by improperly deducting payments made by MP at Mr. Messiers direction for his personal legal expenses, the expenses of his girlfiiend, etc, it may underreport income subjecting - 8 - Supreme Court Records OnLine Library - page 22 of 24 a 1 1 P me to possible civil or criminal penalties. Without access to Defendant's financial records, I cannot determine my U.S. tax liability for 2006. 34. No prior application for the relief requested herein has been made. WHEREFORE, it is respectfully requested that this application for an order compelling access to the books and records of Defendant Messier Partners LLC be granted, together with such other relief as the court deems just and proper. Paris, France Fatine Layt 4 I - sworn to berore me tnis /Iz/ day of February 2007 1 ', - 9 - Supreme Court Records OnLine Library - page 23 of 24 Plaintiff, --against-- MESSIER PARTNERS LLC, ORDER TO SHOW CAUSE AND APPLICATION OF FATlNE LAYT FOR AN ORDER COMPELLING ACCESS TO BOOKS AND RECORDS Salisbury & Ryan, LLP Counsel to PlaintzE Funtine Layt 1325 Avenue of the Americas, Suite 704 New York, New York 10019 (2 12) 977-4660 Supreme Court Records OnLine Library - page 24 of 24