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United States Bankruptcy Court
District of Massachusetts
Chapter 11 Case No. 96-10123-CJK
MOTION TO DISQUALIFY AND ENJOIN WINN DEVELOPMENT FROM NEGOTIATING WITH OR SUBMITTING BID FOR PROPERTY TO TRUSTEE
Now comes Alphonse Mourad, founder, officer stockholder, creditor, and party at interest in the debtor, V&M Management, Inc. and V&M Management, Inc., and moves the Honorable Court (Kenner, C.J.), to disqualify and enjoin Winn Development from negotiating with or submitting any bids for the Mandela property to the Trustee.
In support, Mourad and V&M say as follows:
1. In the summer of 1995, licensed real estate broker Susan Alien of Investment Real Estate in Newton Center approached Alphonse Mourad, President of V&M Management, to see if V&M was interested in selling its property.
2. Mourad expressed interest and asked Alien to proceed.
3. On August 28, 1998, Alien approached Michael Ferry of Winn Development to see if Winn was interested in buying the Mandela property. Ferry expressed interest on behalf of Winn.
4. In the first week of September 1995, Alien forwarded Winn a package of information , documents and pictures of the Mandela property.
5. On September 7, 1995, Michael Ferry told Alien that Winn could not look into the package Alien provided because Mario Nicosia submitted a package and proposal to Winn.
6. Unbeknownst to Ferry, Michael Brown, also of Winn Development, had already entered into an exclusive arrangement with Mario Nicosia to buy the Mandela property at the foreclosure. See attached Alien's September 27, 1995 letter (Exh,"A") and Attorney Dillion's October 2, 1995 letter (Exh."B").
7. On September 8, 1995, Judith Moriarty and Mario Nicosia served notice of their intent to foreclose their assigned mortgage on the Mandela Property.
8. The auction was first scheduled for September 28, 1995. On September 8,
1995 V&M Management and Mourad sued Moriarty and Nicosia in Middlesex Superior Court, C.A. No. 95-5267, and, on September 15, 1995, Judge Catherine White enjoined the September 28, 1995
9. At the same time Alien was soliciting Winn, Mario Nicosia, for N.I.C., Management, sought to entice Winn into forming a partnership to acquire Mandela, and had an exclusive agreement to sell Mandela to Winn upon its foreclosure. See Nicosia's letter dated September 12, 1995 to Winn. Attached hereto, Exh."C".
10. Nicosia and Moriarty refused to provide any pay-off figures prior to the scheduled September 28, 1995 foreclosure because they had an agreement to sell the 2.Mandela property to Winn after the foreclosure.
11. Also attached to this Motion is the February 29, 1996 Memorandum by Attorney Ed Duncan to Attorney Harold Murphy, outlining the fraudulent and invalid note(s) of Nicosia, Exh."D".
WHEREFORE, based upon these earlier, bad faith attempts to acquire Mandela, Winn Development should be disqualified and enjoined from offering to buy Mandela from the Trustee, Stephen Gray.
125 West Street
Investment Real Estate
100 Littlefield Road
Newton Centre, MA 02159
27 September 1995
Six Faneuil Hall Marketplace
Boston, MA 02109
Re: Westminster/Willard Apartments
Dear Michael and Larry:
As you know, I was looking forward to the meeting with both of you and Al Mourad, the owner of Westminster/Willard. I can understand your disappointment too, given what just transpired within your office.
Al's first priority is to protect his tenants and have the property remain as affordable housing. Hence, my contacting you. Winn has always been, to me, the leader in affordable housing.
Our aim was to have a transaction that would have guaranteed that the property remain affordable and be upgraded either via an outright sale or as a joint venture with Al.
I explained to Al the reason for ^he cancellation of today's appointment on site. He asked that you please keep the materials that I have sent, confidential, and not exchange them within the office, which you have already assured me would be the case.
I look forward to complete resolution of the Mario Nicosia situation, satisfactory to Al Mourad, and then you and I can proceed.
Susan Alien cc: A.Mourad
James P. Dillon, Jr.
Attorney at Law
1 Billings Road
N. Quincy, W 02171
Telephone (617) 472-6294
October 2, 1995
Mr. Alphonse Mourad
V&M Management, In.c.
10 Hammond Street
Roxbury, MA 02122
RE: V&M Managenient, Inc. vs Judith Moriarty and Mario Nicosia, Trustees of L&N First Mortgage Realty Trust
This letter is to inform you that today I have filed V&.M Management's Motion to Supplement the Complaint with the Defendants in the above case.
The Supplemental Complaint as you know is based on the new facts that. came to light after the original complaint vas filed. It was subsequently discovered that the defendant Mario Nicosia had an exclusive agreement with the Vinn Development Company to sell Mandela upon its foreclosure.
This exclusive agreement explains why the defendant's have refused to turn over the financial information that we have requested. Specificall loan in question and how the you have paid to Mario mortgages that you
Specifically, the exact payoff figures for the
hundreds of thousands of dollars that have been applied to the six
Nicosia have with him.
The Supplemental Complaint alleges that this exclusive agreement is a false and deceptive act which violates the Consumer Protection Statute, G.L. c. 93A, s. 11 and has cause V&.M Management, Inc., severe monetary damage.
If you have any questions please feel free to contact my office.
James P. Dillon, Jr., Esq.
N. I. C. Management
560 Harrison Avenue
Boston, MA 02118
September 12, 1995
Mr. Arthur Winn
6 Faneuil Hall Marketplace
Boston. MA 02109
RE: Mandela Apartments. Boston, MA
Dear Mr. Winn:
An affiliate of mine has commenced the foreclosure action for the Mandela Apartments in Boston, MA, that is described in the attached, published legal notice. I am interested in forming a partnership with you or one of your affiliates to bid at this auction, to ultimately attempt to acquire the ownership of the Mandela Apartments.
In our work on this foreclosure to date, we have obtained a tremendous amount of information about this property, its legal and financial status, and the best possible strategy for completing the foreclosure. Although we would like to meet with you to discuss a potential partnership between us, we do not want to share any information with you unless you first agree to keep all shared information in strict confidence and to refrain from competing with us in trying to acquire the Mandela Apartments.
With the foreclosure auction scheduled for September 28. 1995, we have little time to complete a partnership with you. We would like to meet with you immediately and complete the partnership documentation by September 20, 1995. Between now and September 20, 1?95, I agree on behalf of myself and any of my affiliates, to refrain from engaging in any negotiations with any other prospective partners about the Mandela Apartments.
In exchange, I need for you and all your affiliates and consultants to agree to:
1. Keep all information that I provide you about the Mandela Apartments in strict confidence. This agreement would continue indefinitely beyond September 20, 1995.
2. Except pursuant to a partnership that we might form, refrain from attempting to purchase any equity or debt interest in the Mandela Apartments so long as I or any of my affiliates hold any equity or debt interest in the Mandela Apartments.
N.I. C. Management
560 Harrisun Avenue
Boston, M A 02118
Mr. Arthur Winn
September 12, 1995
Thus, this letter serves as an agreement between us to negotiate in good faith to form a partnership with the purpose of acquiring the Mandela Apartments, as your confidentiality agreement, and as your agreement not to compete with me in my efforts to foreclose and gain possession of the Mandela apartments. Of course, neither you nor I would be legally bound to any partnership between us until all appropriate documentation has been drafted, agreed upon. and signed by both of us or by our affiliates.
As a part of our partnership negotiations, I can tell you from the outset that I need for our partnership documents to provide for your purchasing my partnership interest in full, for a predetermined price and payment arrangement, shortly after we gain possession of the Mandela Apartments and have stabilized the^ property. Hence, ultimately, -within a short period of time following our gaining possession of the Mandela Apartments, Winn Development will own 1001 of the property on its own.
I am sure you are aware that my affiliate, as mortgagee, owes a duty to the mortgagor to assure that the foreclosure sale is fair to the mortgagor and to use reasonable efforts to assure that the price obtained at the foreclosure sale approximates the true value of the property. I hope you agree with me that our partnership could be in very strong position to purchase this real estate for a fair value at the upcoming foreclosure auction.
If these terms are acceptable to you, please sign both originals of this letter in the space provided below, and return one original to me by courier today. If we do not receive your signed original today, we will present this same offer to another prospective partner. I look forward to the possiblity of working with you on this project.
AGREED AND ACCEPTED
cc: Roger J.F. Lehrberg. Esquire