SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF NEW YORK

x
Index No.

SAVOY MANAGEMENT CORPORATION,

/07

---Date of Filing: May 4, 2007

Plaintiff,
-against-

SUMMONS

LEVIEV FULTON CLUB, LLC, WONDER WORKS

CONSTRUCTION CORP., FULTON CLUB, LLC
and CONWAY STORES, INC.,

0 7601503

In accordance with CPLR

503, the proper place of trial
is the County of New York,
wherein the Plaintiff resides.

Defendants.

x
TO THE ABOVE NAMED DEFENDANTS:
YOU ARE HEREBY SUMMONED to answer the complaint of the Plaintiff, Savoy
Management Corporation, in this action and to serve a copy of your answer, or, if the complaint
is not served with this summons, to serve a notice of appearance, on the Plaintiff s attorneys
within twenty (20) days after the service of this summons, exclusive of the day of service (or
within thirty (30) days after the service is complete if this summons is not personally delivered
to you within the State of New York); and in case of your failure to appear or answer,
judgment will be taken against you by default for the relief demanded i n the complaint.
Dated: New York, New York
May 4, 2007

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TO:

LEVlEV FULTON CLUB, LLC

c/o United Corporate Services, Inc.
10 Bank Street, Suite 560
White Plains, New York 10606

WONDER WORKS CONSTRUCTION CORP.

18 West 21st Street, 4th Floor
New York, New York 10010
FULTON CLUB, LLC
clo Wonder Works

18 West 21st Street, 4th Floor

New York, New York 10010

CONWAY STORES, INC.,

c/o The Conway Organization
1333 Broadway, 3rd Floor
New York, New York 10018

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SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF NEW YORK

SAVOY MANAGEMENT CORPORATION,

Plaintiff,

Index No. -

/07

--against-

C OMPLAlNT

LEVTEV FULTON CLUB, LLC, WONDER WORKS

CONSTRUCTTON CORP., FULTON CLUB, LLC and
CONWAY STORES, INC,

07601503

Defendants.

Plaintiff, Savoy Management Corporation ("Plaintiff ' or Savoy) , by and through its
attorneys, Ganfer & Shore, LLP, as and for its Complaint against Defendants Leviev Fulton

Club, LLC ("Leviev"), Wonder Works Construction Corp. ("Wonder Works"), Fulton Club, LLC
("Fulton'') and Conway Stores, inc. ("Conway") (collectively, "Defendants"), alleges as
follows:
NATURE OF THE ACTION

1.

This litigation arises from Defendants' failure to comply with the express terms

of a settlement agreement by which Savoy and Defendants settled a lawsuit almost one year

ago. Pursuant to the terms of the parties' Stipulation of Settlement executed and So-Ordered
by the Court in or about July 2006 (the "Settlement Agreement'), Savoy agreed, among other
things, to vacate and surrender possession of a portion of the fourth floor of the building located
at 143-155 William Street a/k/a 101-117 Fulton Street a/k/a 52-6 Ann Street, New York, New

York (the "Building") within six months of the date of the Settlement Agreement, and
Defendants agreed, among other things, to pay Savoy a "Termination Fee" of $2,000,000 at such

time and an additional fee of $1,500,000 if and when certain construction was done on the roof
of the Building. (A copy of the Settlement Agreement is annexed hereto as Exhibit "A" and

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incorporated herein by reference). The Settlement Agreement further provided for the payment
of certain liquidated damage sums and interest if the required payments were not timely made.

2.

Defendants have breached the Settlement Agreement by failing and/or refusing to

pay, despite due demand, all of the fees due and owing Plaintiff under the Settlement Agreement
in a timely manner. By reason of such breaches, Defendants now owe Plaintiff in excess of
$1,800,000, plus interest, and additional liquidated damages of $2,750.00 per day.
THE PARTIES

3.

At all times relevant hereto, Savoy was a domestic corporation, organized and

existing under and by virtue of the laws of the State of New York.

4.

Upon information and belief, at all times relevant hereto, Defendant Leviev was a

foreign limited liability company, organized and existing under and by virtue of the laws of the
State of Delaware, authorized to conduct business in the State of New York, and having a
principal place of business at c/o United Corporate Services, Inc., 10 Bank Street, Suite 560,
White Plains, New York.

5.

Upon information and belief, at all times relevant hereto, Defendant Wonder

Works was a domestic corporation, organized and existing under and by virtue of the laws of the
State of New York, and having a principal place of business at 18 West 21st Street, 4th Floor,
New York, New York.

G. Upon information and belief, at all times relevant hereto, Defendant Fulton was a

domestic limited liability company, organized and existing under and by virtue of the laws of the
State of New York, and having a principal place of business at c/o Wonder Works, 18 West 21st
Street, 4th Floor, New York, New York.

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7.

Upon information and belief, at all times relevant hereto, Defendant Conway was

a domestic corporation, organized and existing under and by virtue of the laws of the State of

New York, and having a principal place of business at c/o The Conway Organization, 1333
Broad way, 3rd Floor, New York, New York.
AS AND FOR A FIRST CAUSE OF ACTION
(Breach of Contract)
8.

Plaintiff repeats and realleges each of the foregoing paragraphs as if fully set forth

herein.
A.

The Settlement Agreement

9.

On or about June 5, 2006, Savoy commenced a lawsuit in this Court against

Defendants captioned Savoy Management Corp. v. Leviev Fulton Club, LLC, et al., Index
No. 107734/06 (the "Action"). The Action arose from

a dispute

between

the

parties

concerning Plaintiff s occupancy of a portion of the fourth floor of the Building (the "Premises")
pursuant to a lease dated January 17, 2005 (the "Lease").
10. Shortly after the Action was commenced, the parties entered into settlement

negotiations, which culminated in the execution of the Settlement Agreement in July 2006.
The Settlement Agreement provided that notwithstanding the expiration date contained in the
Lease, Lhe parties consented to the "immediate entry of a final judgment of possession in favor
of Defendants and against Plaintiff granting legal possession of the Premises", the "immediate
issuance of a warrant of eviction'', and an "Order directing the Sheriff to execute the warrant
pursuant to the terms [of the Settlement Agreement]." (Settlement Agreement, ,i 3). Pursuant to
the Settlement Agreement, the final judgment of possession was to provide for "a warrant to

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issue forthwith, with a stay of the execution of the warrant up to and including six (6) months
from the execution of [the Settlement Agreement]." @. 14).
11.

In consideration for Savoy's agreement to accelerate the expiration and

termination of the Lease and to "surrender and vacate" the Premises, the Settlement Agreement
provided that Defendants would pay Plaintiff a Termination Fee. The Termination Fee would be
either $2,000,000 if the conditions of Paragraph 13 did not occur, or increased to $3,500,000 if
the conditions of Paragraph 13 did occur. (Id . i

12.

[ 13, 17).

Paragraph 13 of the Settlement Agreement provided that Defendants would pay

Plaintiff an additional $1,500,000 if they filed plans or made an application to the DOB
and commenced construction of residential or commercial space "higher than the highest roof
on the current structure' 1 Paragraph 13 of the Settlement Agreement reads:
The parties agree that in the event Defendant(s) hereafter file[] plans or
make[] application [sic] with the New York City Department of Buildings and
commence[] construction of residential or commercial space higher than the
highest roof on the current structure, the Termination Fee shall be increased
to Three Million Five Hundred and 00/100 ($3,500,000.00) Dollars, it being
understood that any bulkhead, mechanical or other non-usable space
constructed above such height shall not trigger the increase to the Termination
Fee. The additional $1,500,000.00 shall be paid to Plaintiff within ten (to)
days from the commencement of the construction of any such space.
( Emphasis added).

13.

Paragraph 21 of the Settlement Agreement provides that in the event Defendants

failed "to timely pay the additional $1,500,000 as set forth in paragraph 13 ... Defendants
shall pay Plaintiff , in addition to the Termination Fee, an additional amount equal to
$2,750.00 per each day that Defendant has . .. failed to ... pay the Termination Fee as herein
required." Pursuant to Paragraph 7 of the Settlement Agreement "TIME IS OF THE
ESSENCE" with respect to the parties' compliance with each of the terms and conditions of
the Agreement.

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B.

Defendants Breach of the Settlement Agreement

14.

On or about June 29, 2006, Defendants filed plans and made an application to the

DOB, which evidenced its planned construction of residential space "higher than the highest
roof ' of the Building. At that time, Defendants assured Savoy that the plans and application
were to be modified so that the construction would not exceed the height of the Building's

"highest roof'', and that no such construction would be undertaken.

15.

In or about February 2007, Savoy discovered that Defendants' plans and

application to the DOB were never changed and that the DOB had processed the application and
approved plans for the construction of new floors above the "highest roof on the current
structure."

16.

Defendants had commenced construction of the Building in accordance with such

plans long before December 22, 2006, triggering the additional Termination Fee provision of the
Settlement Agreement ( 13) and entitling Savoy to an additional payment of $1,500,000, plus
$2,750.00 per day in liquidated damages and applicable interest.

17.

On February 28, 2007, Savoy sent a demand letter to Defendants demanding

payment of the $1,500,000 additional Termination Fee, late fees and interest. The Demand
Letter reads in pertinent part
Pursuant to paragraph 13 of that certain Stipulation of Settlement entered into
between you and Savoy Management Corp., the "Termination Fee" is increased to
$3,500,000 "in the event Defendant thereafter files plans or makes application
with the New York City Department of Buildings and commences construction of
residential or commercial space higher than the highest roof of the current
structure."
Although the initial plan filed with, and application made to, the New York City
Department of Buildings, clearly evidence construction of residential space higher
than the highest roof of the current structure, you assured me that the plans would
be changed and that such construction would not be undertaken. Notwithstanding
that at the time that the Termination Fee was originally due, all of the conditions

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which gave rise to the increase of the Termination Fee existed, we accepted your
representation, and in reliance thereon, did not demand the additional $1.5
mi l lion.

Apparently, on February 14, 2007, the New York City DOB processed an
application modifying your building perm it, in accordance with your request to
the DOB, Lo authorize residential construction on an eighth, ninth and tenth
story of the structure.
Demand is herewith made for $1,683,050.00 ($1,500,000 plus late fees as set
forth in the Stipulation of Settlement) plus a per diem amount of $2,750 from
February 28, 2007 unti l paid.
(A copy of the Demand Letter is annexed hereto as Exhibit "B").

18.

Plaintiff has duly and faithfully observed and performed all of its obligations

pursuant to the Settlement Agreement.

19.

Defendants have breached their obligations under the Settlement Agreement in

that, notwithstanding the fact that the additional Termination Fee provision has been triggered by
vi1iue of the plans and application filed by Defendants with the DOB and the commencement of
construction of residential space at the Building "higher than the highest roof on the current
structure", Defendants have failed and/or refused to pay the additional $1,500,000 Termination
Fee and the $2,750.00 per diem liquidated damage fee, which as of the date hereof totals in
excess of $1,841,000, plus interest.

20.

Defendants have failed, despite due demand, to cure such breaches.

21.

As a direct consequence of the aforesaid breaches, Plaintiff has been damaged by

an amount to be determined at trial, but believed by Plaintiff to be no less than One Million
Eight Hundred Forty One Thousand and 00/100 ($1,841,000) Dollars, additional liquidated
damages of
$2,750.00 accruing each day hereafter until judgment is entered, plus interest.

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AS AND FOR A SECOND CAUSE OF ACTION

(Breach of Contract)

22.

Plaintiff repeats and realleges each of the foregoing paragraphs as if fully set forth

23.

The Settlement Agreement provided, inter alia, that the initial Termination Fee of

herein.

$2,000,000 would be deposited in escrow on or before December 22, 2006 and paid to Plaintiff
upon its surrendering vacant possession of the Premises on the "Vacate Date". Paragraph 21 of
the Settlement Agreement further provided, inter alia, that in the event that Defendants shall
either "fall to t imely deposit the Termination Fee with [the] Escrow Agent" or "fail to timely
pay the Termination Fee to Plaintiff ... Defendant[s] shall pay to Plaintiff, in addition to the
Termination Fee, an additional amount equal to $2,750.00 per each day that Defendant[s] [have]
either failed to timely deposit and/or pay the Termination Fee as herein required." Pursuant to
Paragraph 7 of the Settlement Agreement "TIME TS OF THE ESSENCE" with respect to the
parties' compliance with each of the terms and conditions of the Agreement.

24.

Plaintiff has duly and faithfully observed and performed all of its obligations

pursuant to the Settlement Agreement by, inter alia, surrendering vacant possession of the
Premises on December 26, 2006.

25.

Defendants have breached their obligations under the Settlement Agreement in

that, notwithstanding Plaintiff's surrendering vacant possession of the Premises on December

26, 2006, they did not escrow and timely pay to Plaintiff the $2,000,000 Termination Fee, which
payment was not made until January 9, 2007, and have failed and/or refused to pay the $2,750.00
per diem liquidated damage fee which was due pursuant to Paragraph 21 of the Settlement
Agreement by reason of the failure to timely deposit the initial portion of the Termination Fee in

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,.

escrow and timely pay same thereafter, which as of the date hereof total $52,250.00, plus
interest.
26.

Defendants have failed, despite due demand, to cure such breaches.

27.

As a direct consequence of the aforesaid breaches, Plaintiff has been damaged

by an amount to be determined at trial, but believed by Plaintiff to be no less than Fifty

Two Thousand Two Hundred Fifty and 00/100 ($52,250.00) Dollars, plus interest.
WH EREFORE, Plaintiff requests that judgment be entered as follows:
(a)
an

amount Lo

On the First Cause of Action, granting Plaintiff compensatory damages, in

be determined at trial but not less than One Million Eight Hundred Forty One

Thousand and 00/100 ($1,841,000) Dollars, additional liquidated damages of $2,750.00

accruing each day hereafter until judgment is entered, plus interest;
(b)

On the Second Cause of Action, granting Plaintiff compensatory

damages, i n an amount to be determined at trial but not less than Fifty Two Thousand Two
Hundred Fifty
and 00/ 100 ($52,250.00) Dollars, plus interest;
(c)

Awarding Plaintiff the costs and disbursements of this action, including

reasonable attorneys' fees; and

(d)
Dated:

Granting such other and further relief as the Court deems just and proper.

New York, New York

May 4, 2007

GANFER & SHORE, LLP

Attorneys for Plaintiff
By: Steven J. Shore
360 Lexington Ave.
New York, New York 10017
(212) 922-9250

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ORIGINAL
SUPREM E COU RT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK

SAVOY M AN AGEMENT CORPOR ATION,

Index No.

Plaintiff,
against

LEVfEV FULTON CLUB, LLC, WONDER WORKS

CONSTR UCTION CORP., FULTON CLUB, LLC and
CON WA Y STORES, INC.,
Defendants.

SU MMONS AND COMPLAINT

GANFER
Attomey(s) for

& SHORE LLP

Plaintiff

360 Lexington Avenue

NEWYORK, NEWYORK.10017
(212) 922-92M

To
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/07