Mikhlyn et al v. Bove et al

Filing 233

MEMORANDUM in Opposition re 231 Objection to Report and Recommendations filed by ABC All Consulting, Inc., Inga Mikhlyn, Vadim Mikhlyn. (Mandel, Val)

Mikhlyn et al v. Bove et al

Doc. 233 Att. 1

EXHIBIT V

Dockets.Justia.com

LIPA

Customer

ID

Please pay upon receipt

Long Island Power Authortty

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PO Box 9083, Melville NY 11747-9083

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Belmont Villas PO Box 1741 West Babylon NY 11704-0741
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Write your Customer 10 on your check. E" Tear here .· -oReceievid uE h2olugh 02/14/20N8 SUMMARYSEE r Pe o s BiFOR ACCOU 0 T AG T r l n A Non,4$o3...81 unicipal Electric Utility rf 0 C584-me$AlmDee 0ay/hee1et(Bornng recetis t 0 usto 600POp4s8ntule1aeigU0Fl8 m Pdv p r8U4a-uPaPmycn2 p ) i R -yI oeCt 3 aDn et s i o BR a u D 1 P1 0 0M $ 26,-363it0 2 long Island Power- Autf10rity$ 25,149.19 Paetlmnrna2r.rc4r tpes0 l& C e i free area Bi2hMMC R1 e BILLING STATEMENT l6,46 te0 u SU D A Y w1-63 r7 75-90-0i0 w 8ipow 6 60 7'1 'Automat1dw1-.l1-i0e4er.varlg2l5* e -631-0 5- s5-a o 0ab e Se v c 8 H aepo t Th p t of Ser pair e ProblemseRringror Sefeech Imvice ed

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LIPA

IMPORTANT

MESSAGES

As we all know, the cost of oil is soaring throughout the world and fuel costs make up nearly 60% of your L1PA bill. Effective January 1,2008 the total charges on your L1PA bill will increase by 2% as the Power Supply Charge rate needs to be increased from $ 0.093809 to $ 0.097689 per kWh to cover the increased cost of fuel. For more information, please visit L1PA's web site at www.lipower.org or contact L1PA's Customer Assistance Center at 1-800-490-0025. Generate a portion of your home's electricity through L1PA's Solar Pioneer Program. L1PA's rebates and free seminars, visit www.lipower.org/solar. To learn more about

f'lIcfnmer 10: 0584600844

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05846008448 Belmont Villas PO Box 1741 West Babylon NY 11704-0741 $26,463.01

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L1PA

PO Box 888 Hicksville NY 11802-9685
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ADDITIONAL

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Delivery and System Charges c Charges for owning, operating and maintaining Hie electric system, and for certain on-island generation. Basic Service - Fixed daily charges for connection to the electric system. KWH - Kilowatt Hour - Electrical energy consumed if 1,000 watts are used for one hour. Pow g ) used C pr r auc Cha rici s an f th p g. oil and erasSupply to haoges e - electrgety for duel e(e.urchase of power. Revenue-Based PILOTS (Payments In Lieu Of Taxes) State and local taxes on utility revenues.

Suffolk Property Tax Adjustment - The amount collected by L1PA from Suffolk County customers representing t~e ~ve,rp<:tyment of property taxes to the Shoreham taxing JUriSdictions. Meter Multiplier - Converts recorded use to total use on meters triat are designed to only record partial use. Sales Tax -State and/or local sales taxes. Pa ho ent d p e acce ed io a aufymrizes araymentptlocatat n. ny customer office or Payments may be mailed to: L1PA, PO Box 888, Hicksville NY 11802-9685. Please write your Customer ID on the face of the check and make payable to L1PA.

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EXHIBIT W

EXHIBIT X

EXHIBIT Y

EXHIBIT Z

From: To: Subject: Date:

B Saepia "Phil Pavlovicz - OH"; "Frank Guzauskas - IL"; "Anthony Freedman"; Monthly reports Sunday, September 17, 2006 9:40:00 AM

Phil, When Capmark took over the control of the construction activities I was no longer privy to disbursements made for the project. Although I requested that I be given the monthly reports, I have yet to receive any information regarding this matter. It is necessary that I know exactly how much is being spent on the project since it affects my financial situation, as well as the information being crucial for the preparation of the 8609. Again, please forward the previous reports with invoices and copies of checks, wire transfers etc. and keep me updated on a monthly basis going forward. Thank you. Barbara

EXHIBIT AA

Holland+Knight

Tel

202 955 3000

Holland & Knight LLP 2 0 9 9 Pennsylvania Avenue. N.W.. Suite 100 W a s h i n g t o n . D.C. 20006-6801 www.hklaw.com

F a x 202 955 5564

April 18, 2007

Anthony S. Freedman 202 663 7243 [e-mail]

Mr. Frank Guzauskas Vice President Capmark Finance Inc. 100 S. Wacker Drive, Suite 400 Chicago, IL 60606 Re: Amended And Restated Operating Agreement Of Belmont Villas LLC, dated as of October 1, 2004, by and among Chord Associates LLC, as Managing Member, Protech 2003-D, LLC, as Special Member, Amtax Holdings 520, LLC, as Investor Member; Protech Holdings 128, LLC, as Class A Special Member and Barbara M. Saepia, as Original (and Withdrawing) Member ("Operating Agreement"), and as amended by First Amendment Of Amended And Restated Operating Agreement Of Belmont Villas LLC, dated as of June 16, 2006 ("Operating Agreement Amendment") Construction Agreement dated as of October 1, 2004, by and among Belmont Villas LLC ("Borrower"), Barbara M. Saepia ("Construction Phase Guarantor") and Capmark Finance Inc. ("Capmark") (f/k/a GMAC Commercial Mortgage)("Administrator")("Construction Agreement"), as amended by First Amendment to Construction Agreement dated June 20, 2006 ("Construction Agreement Amendment" and together with the Operating Agreement, the "Amended Agreements"). Dear Mr. Guzauskas: DELEGATION OF RESPONSIBILITY TO PROTECH UNDER THE AMENDED AGREEMENTS In June of 2006, by virtue of the Amended Agreements, Barbara Saepia, the Managing Member of Chord Associates, LLC ("Chord"), which in turn, is the Managing Member of Belmont Villas LLC (the "Owner"), delegated to Protech Holdings 128, LLC, as Class A Special Member ("Protech") the responsibility for bringing about completion of construction ("Completion") of the Belmont Villas housing development (the "Project"). This delegation was made in the context of various amendments to agreements involving the Project that were intended to permit Completion in accordance with a revised time schedule and budget and with the applicable deadlines for such

Mr. Frank Guzauskas April 18, 2007 Page 2 Completion extended appropriately. It is important to recognize that these agreements were reached in the context of substantial concern by both Chord and Capmark about contractor performance, and as a resolution of some disagreement as to the best means of obtaining satisfactory performance. Moreover, the paramount objective of the various amendments was to obtain timely and satisfactory Completion. Ms. Saepia advises me that, as of today, the Project has not been completed, and in fact, that the progress that has been made toward completion since July 12, 2006 is unsatisfactory. This circumstance is a matter of extreme concern to Ms. Saepia, on behalf of the Managing Member and in her various other capacities with respect to the Project, and it should be, as well, to all of the members of the Owner. As is demonstrated in the attached Exhibit, the delay has been extremely costly to the Owner. Thus, the delay and resultant costs have had a negative impact on Ms. Saepia's personal guarantee exposure, as well as on the value of Chord's membership interest and payment of the Developer Fee. Moreover, as you know, until the Project is rented up, the Owner's investors will not begin to receive low-income housing tax credits ("tax credits"). As Ms. Saepia has advised you, through e-mails and conversations with Phil Pavlovicz and others at Capmark, the delay has also raised substantial concern among local officials. It is Ms. Saepia's belief that these officials have refrained from seeking to revoke the Project's building permits until this point only due to the goodwill she has with them. The Town of Babylon is aware that construction management is no longer under Ms. Saepia's control, and she expects it now to proceed with the revocation. Finally, as you know, the delay has already necessitated that she request an extension of the financing commitment from Fannie Mae. Beyond the delay, Ms. Saepia is concerned with a number of specific elements of Protech's management of construction, to wit: 1. Sound Wall and Associated Invoice Matters An Application and Certification for Payment dated December 1, 2006 from Condo Bros. Construction Corp. ("Condo Bros.") ("Dec. 2006 Draw") includes a requisition for $50,000 for work allegedly done on the Sound Wall (E 17) since the previous draw request. Ms. Saepia asserts challenges the value of this work. Similarly, she believes that the requisitions for the Main Gate/Clubhouse/Pavers item in the amount of $60,000 and the Landscape & Sprinklers item in the amount of $25,000 are unjustified, again because such work as was done did not support this cost. 2. Site Work Ms. Saepia believes that Condo Bros, has been intentionally submitting inflated or unjustified "change orders" for, among other things, site work, and refused to commence or continue work until the "change orders" were signed. In fact, much of the site work included requisitions for what, in fact, was unsuitable soil, as

Mr. Frank Guzauskas April 18, 2007 Page 3 described by the company responsible for evaluating the work. Nevertheless, Protech approved and paid the applicable change orders. 3. Landscape & Sprinklers The Scheduled Value for Landscape & Sprinklers set forth on the Dec. 2006 Draw is $314,800, which Ms Saepia believes is nearly double the price for which the work had previously been contracted. Ms. Saepia's protest only produced a letter from your attorneys, defending Protech. 4. Pump house/New Site Plan Ms Saepia believes that there is insufficient justification for the items of $115,000 for the pump house and $56,000 for the "new site plan." While not directly a cost item, one additional element of Protech's performance deserves mention. Commissioner Peter Casserly, Planning and Development, Town of Babylon, requested that Ms. Saepia arrange a meeting with him and Phil Pavlovicz of Protech. Commissioner Casserly had expressed the concern of the Town authorities with the absence of construction progress. When such a meeting, could not be arranged, there was only a phone conversation between Mr. Pavlovicz and Commissioner Casserly, at which, according to Ms. Saepia, the Commissioner threatened to revoke all of the Project's building permits. This was followed up by a letter from the Commissioner to that effect. In light of the foregoing, Ms. Saepia believes that she and Capmark need to act to assure the completion of the Project and remedy or mitigate the harm that has been done. The steps to be taken should include the following: · Immediate replacement of Protech with Ms. Saepia or a construction manager acceptable to both the Managing Member and the Investor Member. Authorization to Ms. Saepia or the replacement construction manager to take all necessary steps to replace non-performing contractors and obtain refunds of unjustified expenditures. Moreover, Ms. Saepia should be clearly permitted to take legal action on behalf of the Owner against defaulting contractors. Development of a plan to limit and compensate for the financial harm caused to the Owner and Ms. Saepia by Protech's action and inaction. The attached Exhibit sets out her estimate of that harm, consisting of approximately $2.4 million in lost revenues for failure timely to complete the Project and approximately $2.5 million in added costs or questionable

·

·

Mr. Frank Guzauskas April 18,2007 Page 4 cost items. We are prepared to discuss these items and provide such justification as you may require. We would like to bring one final item to your attention. I have informally discussed with Capmark's attorneys the possibility that Ms. Saepia may obtain an offer to acquire the Project from the Owner. She now believes that the prospective purchaser may be interested in acquiring only the Managing Member's interest. Obviously, any such action would required Capmark's approval, as well as the lender's. While we do not have any details to share with you right now, we hope, within the next several weeks, particularly as we clarify remedies to the current circumstances, to have a proposal that will be satisfactory, indeed attractive, to all parties. I realize that this letter raises significant issues for Capmark and we wish to assure you of Ms. Saepia's desire to resolve them fairly and reasonably. Indeed, we believe it essential that such resolution occur as quickly as possible, so as to permit the Completion of the Project without further delay, which we all want. Sincere!

'reedman
# 4 4 8 2 6 1 8 v3

Capmark Excess Charges to Project Construction Category Lost Revenue Construction Loan Interest (A) Guarantee Fee Insurance-Builder's Risk (B) Real Estate Taxes ( C) Security Utilities (approx) Bldg. Permit Renewal Jan 2007 Bldg. Permit in June 2007 Construction Manager (Greyhawk) (D) Landscaping (E) Forcemain (F) Pumphouse Main Gate Questionable site work -sifting (G) Total Time Period 11/1/06-10/31/07 11/1/06-10/31/07 11/1/06-10/31/07 11/1/06-10/31/07 11/1/06-10/31/07 11/1/06-10/31/07 11/1/06-10/31/07 Monthly Cost 201,720 45,000 19,015 No. Months
12 12 12

6,136 3,600

12 12

Total Cost 2,420,640 540,000 228,180 144,000 70,000 73,632 43,200 8,900 8,900 200,000 138,000 565,000 150,000 155,000 233,000

4,978,452

A. Constr. Loan Interest - average of 45,000, approximately. B. insurance 7/30/06-1/31/07 Renewal of Builder's risk 1/31/07 - 6/30/07 Renewal of Builder's risk 6/30/07 -11/31/07 Renewal of Builder's risk (anticipated) 5/31/06-08/31/06 Renewal of general liability 8/31/06 -11/26/06 Renewal of general liability 11/26/06 - 2/26/07 Renewal of general liability C. RE Taxes were approx. $34,000/year until Dec. 2006. They will be $70,000 for Dec. 2006 - Nov. 30, 2007. D. Racanelli Construction offered to complete the project as project manager for the total sum of $100,000. Capmark refused their offer and gave the job to Greyhawk (who knew nothing about the project) for the fee of $300,000. 48,411 47,800 48,000 144,211 7,847 7,411 7,411

By way of comparison, it should be noted that Racanelli started work in July 2006 on a force main on a different project, 200 feet longer than that at Belmont Villas, just one mile east of our site. The project consists of 75 condominium units designed by the same architect in the same style.

They completed the force main in October 2006 and have since sold out all the units.
E. Chord contracted with Wade Landscaping to do the work for $138,000 less than Condos but Phil P. cancelled the already executed contract and inexplicably awarded the contract to Condos under the pretense that "the scope of work MAY be different." This is consistent with Condos fraudulent claims throughout this process. The scope of work IS NOT different. The scope of work in order to be different would have to be introduced via a REVISED set of plans stamped and approved by the TOB. No such revision to the original approved set has taken place. The scope of work is unchanged. F. Belmont to be credited if Condos is removed from running forcemain. G. By Condos

EXHIBIT BB

-----Original Message----From: Bill McCarthy [mailto:[e-mail]] Sent: Monday, July 09, 2007 4:41 PM To: Barbara Saepia Subject: Re: 2006 audit for Belmont Villas He never sent me anything. I had one email exchange with him but never got anything. My recollection was that he was passing the info on to someone else. I did not chase after the info, they have to get it to me, I need a set of books and records to audit, not just requisitions. Bill Bill Sent from my Verizon Wireless BlackBerry -----Original Message----From: "Barbara Saepia" <[e-mail]> Date: Mon, 9 Jul 2007 16:34:50 To:<[e-mail]> Subject: RE: 2006 audit for Belmont Villas

Bill, I thought you were in contact with Frank Gazauskas who was going to give you the information you needed. Whatever happened to that? -----Original Message----From: Bill McCarthy [mailto:[e-mail]] Sent: Monday, July 09, 2007 3:57 PM To: Barbara Saepia Subject: Re: 2006 audit for Belmont Villas Barbara, I never received books and records. Requisitions are not sufficient for audit, Bill Sent from my Verizon Wireless BlackBerry -----Original Message----From: "Barbara Saepia" <[e-mail]>

Date: Mon, 9 Jul 2007 14:34:38 To:<[e-mail]> Subject: FW: 2006 audit for Belmont Villas

EXHIBIT CC

Barbara Saepia
From: Sent: T o: Subject: Bill McCarthy [[e-mail]] Saturday, October 13, 2007 5:19 PM Barbara Saepia Re: Belmont financials

Barbara, I was never given a set of books and records to audit, as such no audit could be done. You provided me with certain requisitions, however, the information was not a complete set of records. I sent emails, I believe, to Capmark but I don't recall to whom they were sent. I will check my sent emails to see if I retained the contact. Bill Sent from my Verizon Wireless BlackBerry -----Original Message----From: "Barbara Saepia" <[e-mail]> Date: Fri, 12 Oct 2007 19:08:56 To:<[e-mail]> Subject: Belmont financials

Although I asked you to timely prepare the financial statements for the project, you indicated that you required certain financial documentation from Capmark in order to do so. It was my understanding that you never received such information from Capmark despite your request from them to provide you with the documentation. Please confirm your understanding of this situation and to whom you made such request. Thank you.

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