WROBEL & SCHATZ LLP

1040 Avenue of the Americas, 11th Floor

New York, New York 10018
Tel: (212) 421-8100
Attorneys for Plaintiffs

SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF NEW YORK

08602706

--------------------------------- - ----------- -------------------- -)(

SAVOY SENIOR HOUSING CORPORATION and
SAVOY LIBERTY VILLAGE LLC,
Plaintiffs,
-againstTRBC MINISTRIES, LLC,
Defendant.

Index No.
SUMMONS

Summons & Verified

Complaint Filed on
September _, 2008

You are hereby summoned to answer the Verified Complaint in this action
and to serve a copy of your answer on plaintiffs' attorney within 20 days after
service of this Summons, exclusive of the date of service, or within 30 days after
completion of service where service is made in any other manner than by personal
service within the state. In case of your failure to appear or answer, judgment will be
taken against you by default for the relief demanded in the Verified Complaint.
Plaintiffs designate the County of New York as the place of trial. The basis
of venue is CPLR 503(c), plaintiffs' principal place of business. Plaintiffs' principal
place of business is located at 885 Second Avenue, New York, New York.
Dated: New York, New
York September 18,
2008

WROBEL & SCHATZ LLP

David C. Wrobel

1040 Avenue of the Americas

New York, New York 10018

(212) 421-8100
To:

TRBC Ministries, LLC

1971 University
Boulevard
Lynchburg, Virginia
24502

Supreme Court Records Online Library - page 1of 16

Attorneys for Plaintiffs

WROBEL & SCHATZ LLP

1040 Avenue of the Americas, 11th Floor
New York, New York 10018
Tel: (212) 421-8100
Attorneys for Plaintiffs
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
-------------------------------- --------------------- - -----------)(
SAVOY SENIOR HOUSING CORPORATION and
SAVOY LIBERTY VILLAGE LLC,
Plaintiffs,
againstDefendant.
TRBC MINISTRIES, LLC,

Index No.
VERIFIED
COMPLAINT

08602706

------ ------------------------- ------------------------------------- :X:

Plaintiffs Savoy Senior Housing Corporation ("SSHCn) and Savoy Liberty
Village LLC ("SLV"), by and through their attorneys, Wrobel & Schatz LLP, as and for
their Verified Complaint against defendant TRBC Ministries, LLC ("TRBC"), allege as
follows:
Parties and Other Relevant Entities

1.

The parties to this action were partners in a Delaware limited partnership

located in New York, New York, named Liberty Village Associates Limited
Partnership ("LVA,,). LVA was formed for the purpose of developing a senior housing
development for the followers of the Reverend Jerry Falwell on Liberty Mountain in
Lynchburg, Virginia (hereinafter the "Development").
2.

Plaintiff SSHC is a New York c01poration with a principal office located at

885 Second Avenue, New York, New York. SSHC is a real estate developer with a

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proven track record in developing senior housing. It was named the General
Partner of

LVA and granted an initial 1% ownership interest in the enterprise.

3.

Plaintiff SLV is a Delaware limited liability company with a principal office located

at 885 Second Avenue, New York, New York. SLV was created to serve as a
vehicle for equity investors and was a limited partner in LVA and it was granted an
initial 89% ownership interest in the enterprise. (Hereinafter SSHC and SLV are
sometimes referred to collectively as the "Savoy plaintiffs''.)
4.

Defendant TRBC is a Virginia limited liability company with a principal office

located at 1971 University Boulevard, Lynchburg, Virginia. The initials "TRBC" are
derived from the Thomas Road Baptist Church, the church of the late Reverend
Jerry Falwell. Upon information and belief, the members of TRBC, at all relevant
times, were the Lynchburg Christian Academy and the Liberty Broadcasting
Network, Inc., two entities within the umbrella of the Thomas Road Baptist
Church's organization. TRBC named a limited partner of LVA with a non-dilutable
10% interest in the enterprise

Introduction and Background

5.

This case concerns breach of contract and breach of trust. As further explained
herein, TRBC, although denominated as a limited partner of LVA, was an essential
party to the enterprise with express duties and responsibilities to the limited
partnership and its members. The Savoy plaintiffs relied upon TRBC to their
detriment, and now TRBC owns and controls LVA' s assets and it is poised to
unfairly benefit from the labors and investments of the Savoy defendants.

6.

At the start, the partnership between the Savoy defendants and TRBC held great
promise: SSHC brought to the project its know-how as a developer of senior

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..
housing and an ability to raise capital; TRBC had developable land and countless senior
followers of Reverend Falwell and the Thomas Road Baptist Church.
7.

As a Falwell-related enterprise in Lynchburg, Virginia - the home to numerous

Falwell-related enterprises that include ministries, foundations, political
organizations, broadcast and media companies and schools, including a private K12 academy, a college and a law school-- TRBC was uniquely well-placed to
develop local real property. It was for that reason that TRBC, in addition to
assuming responsibility for marketing, promised to assist in obtaining all necessary
governmental approvals and permits for the construction of the Development.

8.

TRBC sought out the services of SSHC because of SSHC's proven track record as a
developer of senior housing and because of SSHC's ability to raise capital for such
projects. SSHC agreed to share its know-how and its relationships with TRBC with the
understanding that TRBC would act as a partner to SSHC in furtherance of a
common goal.

9.

Significantly, at SSHC's request, TRCB expressly agreed to an "Exclusivity" clause

(set forth in Section I 0.13 of the LVA Limited Partnership agreement) pursuant to
which TRCB agreed that it would not, for ten years, without the prior written
consent of SSHC, participate in the development of any senior housing within 25
miles of the City of Lynchburg, Virginia.
IO.

Notwithstanding its promising beginning, LVA' s Development was beset by

construction problems and ultimately LVA filed for bankruptcy protection in the
Southern District of New York. Thereafter, following a series of transactions, many
unbeknownst to the Savoy plaintiffs, TRBC obtained control of LVA's property for
the

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purpose of development. Upon information and belief, TRBC has done this by
acting in a secretive manner, through the use of non-disclosed agents and
intermediaries, in a purposeful scheme to deprive the Savoy plaintiffs of the fruits of
their investment and labors.
11. Furthermore, upon information and belief, TRBC stands in blatant violation of the
Exclusivity clause that it signed and to which it is still bound.

Facts
The Origin, Financing and Structure of LVA

12. During 1999, representatives of the Jerry Falwell ministries contacted SSHC, a
New York-based owner and operator of urban senior-housing and assisted living
facilities, with a view towards discussing a possible senior-housing development
in Lynchburg, Virginia, to serve the followers of Jerry Falwell and his church,
Thomas Road Baptist Church.
13. TRBC, an affiliate of Jerry Falwell's Thomas Road Baptist Church, owned or
controlled an approximately 140acre site on Liberty Mountain in Lynchburg, which
Jerry Falwell wished to have developed as a senior housing community for his
followers.
14. Following repeated and lengthy negotiations conducted in the City and County of New
York in 1999 and 2000, an agreement was reached between TRBC and SSHC to form
a new limited liability partnership, LVA 1 which would acquire the 140 - acre site and
develop a senior housing project that would include active adult housing, independent
living, and assisted living for senior citizen followers of Jerry Falwell, his church and
his ministries.

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15. TRBC was to contribute the land and provide the marketing effort to sell units to its
followers, and for its efforts would be entitled to a non-dilutable 10% interest in the
partnership and would be paid marketing fees generated from each sale. In addition,
since TRBC was a longtime owner of the property and well acquainted with
Campbell County, Virginia, TRBC was also charged with assisting in obtaining all
permits required for the project.
16. SSHC, for its part, was to act as developer, design the project, execute on a business
plan and source the equity and debt capital necessary for the transaction. SSHC was

to be paid a development fee and share in the profits in the event that the project
was successful.
17. In2000 SSHC sourced approximately $2 million of equity for the project through
third party investors, who invested that capital through plaintiff SLV as a limited
partner in LVA. Initially SLV was to have an 89% ownership interest in LVA. The
balance of I% of the LVA was initially owned by SSHC, which acted as the sole
general partner of the limited partnership.
18. SSHC also sourced loans totaling $20 million from Community National Bank
to improve the land and develop the project.

The Exclusivity Clause

19. Although SSHC was a successful developer with a proven track record in
developing senior housing, its experience was limited to urban settings and it
certainly had no experience with development in the Lynchburg, Virginia area.

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20. Because SSHC would need to devote considerable resources to the TRBC project
--to the exclusion of other profitable work- and because of the overwhelming
advantage that TRCB and its related entities had as marketers in the Lynchburg,
Virginia area, SSHC agreed to partner with TRBC on the condition that TRBC, for
itself and its affiliates, agree not to compete with the Development.
21.

Consequently, TRBC expressly agreed to an "Exclusivity" clause (set forth in

Section 10.13 of the LVA Limited Partnership agreement) pursuant to which TRCB
agreed that it would not, for ten years, without the prior written consent of SSHC,
participate in the development of any senior housing within 25 miles of the City of
Lynchburg, Virginia.

22. SSHC would not have proceeded with the Development and the limited
partnership were it not for TRBC's agreement to the Exclusivity clause

The Failure of the LVA Development and the Chapter 11 Filing

23. From the outset, the LVA Development was beset by construction issues peculiar
to the locality of Campbell County Virginia.
24. Although SSHC utilized contractors, subcontractors and consultants recommended
by TRBC and Reverend Falwell

at least one of whom was a relative

of Falwell-- SSHC was unable to complete the Development.

25. As a result, on March 11, 2004, LVA filed a Chapter 11 Reorganization Petition
in the Southern District of New York.

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The Sale of LVA' s Assets

26. During the course of the LVA bankruptcy proceedings, efforts were made to sell the
assets of LVA, most notably the 140-acre site on Liberty Mountain upon which the
Development was to be built

27. During the course of the LVA bankruptcy proceedings, the Savoy plaintiffs were
approached by American Heritage Communities/ Liberty Village LLC ("AHC") an
entity that agreed to purchase the General Partnership interest of SSHC for $1
million and the Limited Partnership interest of SLV for $2 million.
28. In addition, because AHC was allegedly interested in ultimately developing the senior
housing in conjunction with TRBC, AHC agreed to purchase from SSHC a waiver

of TRBC's Exclusivity clause for an additional $1 million.

29. To effectuate the foregoing, AHC and the Savoy plaintiffs entered into a written
Partnership Interest Purchase Agreement dated March 16, 2005 (the "PIPA").
30. Notably, in the PIPA, AHC represented and warranted that it was a "wholly owned
subsidiary of American Heritage Communities, Inc."
31. AHC defaulted upon its purchase promises in the PIP A Instead, in connection
with a Plan of Reorganization approved by the Bankruptcy Court in March 2006,
ARC purchased the real property of LVA.
32. At no time during the course of its dealings with the Savoy plaintiffs or the
Bankruptcy Court did AHC represent that it was in any way related to TRBC or
any other Falwell-related entity. To the contrary, every indication was given by
AHC and TRBC that they were entirely independent enterprises.

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33. Because AHC defaulted, and never closed, under the PIPA, SSHC never released

TRBC or its related entities from their obligations wider the Exclusivity clause,
which are still extant and binding upon them.

SSHC's Recent Discovery Regarding AHC and TRBC

34. Recently the Savoy plaintiffs learned, to their surprise, that, without the knowledge
or consent of the Savoy plaintiffs, and undisclosed to the Bankruptcy Court, LYA's
Liberty Mountain property was transferred, not to AHC, but to Liberty Ridge,
LLC, an entity owned and controlled by TRBC.
35. Upon information and belief, AHC was nothing but a front, controlled by TRBC for
the purpose of acquiring LVA's land in a manner consistent with its fiduciary duties

and its duty of good faith,

36. Upon information and belief, TRBC acquired its land in furtherance of a
scheme to usurp for itself the benefits of the investment and hard work of its
partners SSHC and SLY.
37. Upon information and belief, TRBC's now stands in violation of the
Exclusivity clause.
First Cause of Action
(Breach of Fiduciary Duty)
38. Plaintiffs hereby repeat and reallege the allegations set forth in paragraphs 1 through
37 above as if fully set forth herein.
39. As a result of the foregoing, TRBC owed a fiduciary duty to its partners, the Savoy
plaintiffs, and TRBC breached that duty.

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40. As a result of that foregoing, the Savoy plaintiffs have been damaged in an
amount in excess of $30 million, to be proven at trial.
41. Plaintiffs are entitled to punitive damages of at least $30 million, to be
assessed at trial.
Second Cause of
Action (Breach of
Contract)
42. Plaintiffs hereby repeat and reallege the allegations set forth in paragraphs 1 through
37 above as if fully set forth herein.
43. As a result of the foregoing, TRBC assumed contractual obligations to the Savoy
plaintiffs and TRBC breached those obligations.
44. As a result of that foregoing, plaintiffs have been damaged in an amount in
excess of $30 million, to be proven at trial, together with incidental and
consequential
damages.
Third Cause of Action

(Breach of Duty of Good Faith and Fair Dealing)

45. Plaintiffs hereby repeat and reallege the allegations set forth in paragraphs 1
through 37 above as if fully set forth herein.
46. As a result of the foregoing, TRBC owed a duty of good faith and fair
dealing to the Savoy plaintiffs and TRBC breached that duty.
47. .

As a result of that foregoing, the Savoy plaintiffs have been damaged

in an amount in excess of $30 million, to be proven at trial.

48. Plaintiffs are entitled to punitive damages of at least $30 million, to be
assessed at trial.

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..
Fourth Cause of Action

(Constructive Trust)
49. Plaintiffs hereby repeat and reallege the allegations set forth in paragraphs I
through 37 above as if fully set forth herein.
50. As a result of the foregoing, TRBC holds as trustee for the Savoy plaintiffs the
property that TRBC has appropriated for itself, including information developed
exclusively for LVA.
Fifth Cause of Action
(Unjust Enrichment)

51. Plaintiffs hereby repeat and reallege the allegations set forth in paragraphs 1 through
37 above as if fully set forth herein.

52. As a result of the foregoing, TRBC has been unjustly enriched by the
investment and hard work of the Savoy plaintiffs

53. As a result of that foregoing, plaintiffs are entitled to an award of

compensatory damages in excess of $30 million, to be proven at trial.
Six.th Cause of Action

(Intentional Misrepresentation/Fraud)
54. Plaintiffs hereby repeat and reallege the allegations set forth in paragraphs 1 through
37 above as if fully set forth herein.
55. TRBC, with the intention that the Savoy plaintiffs rely, caused AHC to make
misrepresentations to the Savoy plaintiffs regarding AHC's independence from

TRBC.
56. The Savoy plaintiffs reasonably relied upon the representations of AHC, to their
detriment.

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57. As a result of its reliance, plaintiffs have been damaged in an amount in excess
of $30 million, to be proven at trial.
58.

Plaintiffs are entitled to punitive damages of at least $30 million, to be assessed

at trial.
Seventh Cause of Action

(Quantum Meruit)
59. Plaintiffs hereby repeat and reallege the allegations set forth in paragraphs 1 through

37 above as if fully set forth herein.

60.

TRBC benefited from the investment and hard work of its fellow partners, the

reasonable value of which is an amount in excess of $30 million, to be proven at

trial.
Eighth Cause of Action

(Injunctive Relief)
61. Plaintiffs hereby repeat and reallege the allegations set forth in paragraphs 1
through 37 above as if fully set forth herein.

62. TRBC stands in violation of the Exclusivity clause pursuant to which it agreed
that it would not, without the prior written consent of SSHC, participate in the
development of any senior housing within 25 miles of the City of Lynchburg,
Virginia.
63. As a result of the foregoing, TRBC should be enjoined from participating in the
development of any senior housing within 25 miles of the City of Lynchburg for the
term of the Exclusivity clause.
64. Plaintiffs have no remedy at law and TRBC has expressly waived any
argument to the contrary.

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Ninth Cause of Action

(Tortious Interference With Contractual Obligations/Business Relations)

65. Plaintiffs hereby repeat and realleges the allegations set forth in paragraphs 1
through 37 above as if fully set forth herein.

66. As a result of the foregoing, TRBC has wrongfully interfered with the Savoy
defendants' PIPA with AHC.
67. As a result of its reliance, plaintiffs have been damaged in an amount in excess

of $30 million,to be proven at trial.

WHEREFORE, Plaintiffs demand judgment against TRBC Ministries, LLC as

follows:
A.

On the First Cause of Action, compensatory damages in an amount in excess of $30

million, to be proven at trial, together with punitive damages in excess of $30
million;

B.

On the Second Cause of Action, compensatory damages in an amount in excess of

$30 million, to be proven at trial, together with incidental and consequential
damages;

C.

On the Third Cause of Action, compensatory damages in an amount in excess of

$30 million, to be proven at trial, together with punitive damages inexcess of $30
million;

D.

On the Fourth Cause of Action, an Order that TRBC holds as trustee for plaintiffs
the "Company Property" that TRBCC has appropriated for itself, including
information developed exclusively for LVA

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On the Fifth Cause of Action, compensatory damages in an

amount in excess of $30 million, to be proven at trial;

G.

On the Sixth Cause of Action, compensatory damages in an amount in

excess of $30 million, to be proven at trial, together with punitive damages in excess
of $30 million;
H.

On the Seventh Cause of Action, compensatory damages in an amount in excess of

$30 million, to be proven at trial;
I.

On the Eighth Cause of Action, an injunction against TRBC enjoining TRBC

from participating in the development of any senior housing within 25 miles of

the City of Lynchburg for the term of the Exclusivity clause;

J.

On the Ninth Cause of Action, compensatory damages in an amount in excess of

$30 million, to be proven at trial; and

K.

The costs and disbursements of this action, including reasonable attorney's

fees and such other and further relief as this Court deems just and proper.
Dated: September 18, 2008
New York, NY

WROBEL & SCHATZ LLP

By:

David C. Wrobel, Esq.

Attorneys for Plaintiffs Savoy Senior Housing
Corporation and Savoy Liberty Village LLC
1040 Avenue of the Americas, Suite 1101
New York, New York 10018
212-421-8100

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VERIFICATION
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
JACOB FRYDMAN, being duly sworn, deposes and says that:
I am the President of Savoy Senior Housing Corporation, a New York Corporation,
and a plaintiff in the within action. I have read the foregoing VERIFIED COMPLAINT and

know the contents thereof; the same is true to my knowledge, except as to matters stated upon
information and belief, and as to those matters, I believe them to be true. The grounds of
my belief as to alJ matters not stated upon information and belief are as follows: the

information contained in the file.

Jacob Frydman
Sworn to before me this
18111 day of September 2008

otary Public
SANORA BALL POOLE
NOTARY PUBLIC, Stata of New York
No, 01P04836550
Qualified in New York County
Commission Expires
April30,20..!..L.

Supreme Court Records Online Library page 15 of 16

Index No.:

SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF NEW YORK
v----------------------- ----------

SAVOY SENIOR HOUSING CORPORATION and

SAVOY LIBERTY VILLAGE LLC,
Plaintiffs,
-againstTRBC MINISTRIES, LLC,
Defendant.
-==-=:::;==========;;;;;;;;;:=-=====:::::==================-

SUMMONS & VERIFIED COMPLAI NT

Pursuant to 22 NYCRR 130-t.t-a

David C. Wrobel, Esq.

WROBEL & SCHATZ, LLP

Attorneys for Plaintiffs
1040 Avenue of the Americas, 11th Floor
New York, NY
10018 (212) 4218100

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