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In re: Case No.: 09-48331 A One Management I, Inc. Chapter 11

UNITED STATES BANKRUPTCY COURT 

EASTERN DISTRICT OF NEW YORK 

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In re: Case No.: 09-48331 A One Management I, Inc. Chapter 11 

Debtor. 

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DECISION AND ORDER INVALIDATING LEASES AND TENANCIES AT 577  WARREN STREET, BROOKLYN, NEW YORK 

JOEL B. ROSENTHAL 

United States Bankruptcy Judge 

This matter comes before the Court upon the Motion for Contempt of this Court’s  Amended Confirmation Order Dated November 2, 2010 and for Sanctions filed by Carnegie Hall  Overlook, LLC (“Carnegie”) (Docket No. 87), as assignee of a certain mortgage covering the  premises known as 577 Warren Street, Brooklyn, New York (“577 Warren Street”) and the  proponent of the confirmed Chapter 11 plan of reorganization. The Court held an evidentiary hearing on December 7, 2010, and issued an Order on December 8, 2010 (Docket No.104), finding the Debtor, Maria Valvi, principal of the Debtor, and Nicholas Gordon, property  manager for the Debtor, in contempt of the Court’s Amended Order of Confirmation dated  November 2, 2010 (the “Confirmation Order”) (Docket No. 87) and scheduling a further hearing  on, inter alia, the validity of alleged leases and tenancies at 577 Warren Street. The Court held a further evidentiary hearing on January 12, 2011, and based upon the testimony of witnesses, the  documents submitted into evidence, and the arguments of counsel, for the reasons set forth below  the Court finds that the leases and tenancies of Keith James, Frank Rodriquez, Ronald 

Tantajulca, Jessica Gonzalez, Leidy Estevez, Fancisco Julca, Sergio Matos, Mohammed  Siddiqi, and Estevez Martinez at 577 Warren Street, Brooklyn, New York, to the extent they  exist or ever existed, are void and without any force and effect.  

JURISDICTION 

The Court has jurisdiction over these core proceedings under 28 U.S.C. §§ 1334 and  157(b)(2) and the Eastern District of New York Standing Order of reference dated August 28,  1986. This Decision and Order constitute the Court’s findings of facts and conclusions of law  required by Fed. R. Bankr. P. 7052. 

BACKGROUND 

In the Court’s December 8, 2010 Order (Docket No. 104), the Court ordered that Maria  Valvi, Nicholas Gordon, Keith James, Frank Rodriquez, Ronald Tantajulca, Jessica Gonzalez,  Leidy Estevez, Fancisco Julca, Sergio Matos, Mohammed Siddiqi, and Estevez Martinez, appear  before the Honorable Joel B. Rosenthal, U.S. Bankruptcy Judge, on December 17, 2010 at 9:30  a.m. to address the questions on the legitimacy of the alleged leases and tenancies created by the  eight October 2010 alleged leases, the alleged misconduct regarding the maintenance and repair  of 577 Warren Street, Brooklyn, New York, and the alleged conspiracy of the owner,  management and/or tenants to frustrate and/or interfere with the reorganization effort and  determine what, if any, sanctions are appropriate. The record reflects that Jose Parrillo,  Mohammed Siddiqi, Keith James, Jessica Gonzalez, Frank Rodriquez, Ronald Tantajulca,  

Francisco Julca1  

c/o Andrew Molbert, Esq., Sergio Matos1 a/k/a Sergio DeMatos c/o Andrew 

1 The Court is aware that Andrew Molbert, counsel for Mr. Gordon, also represents three of the tenants at 577  Warren Street: Estevez Martinez, Sergio Matos, and Francisco Julca in New York State Court proceedings against  

Molbert, Esq., Leydi Estevez1 a/k/a Ledidy Estevez a/k/a Estevez Martinez c/o Andrew Molbert,  Esq. were all served with a subpoena for the scheduled December 17, 2010 hearing. See Affidavit/Certificate of Service of Subpoenas for Contempt Hearing (Docket No. 109).  

At the request of parties, the Court adjourned the December 17, 2010 evidentiary hearing  to a December 23, 2010 non-evidentiary telephonic hearing with the representation of counsel  that a settlement was in the works. Almost immediately upon the adjournment the Court was  informed that the settlement had fallen apart and that Mr. Gordon would be out of the country for  the December 23, 2010 hearing (a fact apparently not revealed to Carnegie’s counsel until after  the hearing was adjourned).  

At the December 23, 2010 hearing the Court scheduled a further evidentiary hearing for  January 12, 2011 to address the questions of the legitimacy of the alleged leases and tenancies  created by the eight alleged October 2010 leases, the alleged misconduct regarding the  maintenance and repair of 577 Warren Street, Brooklyn, New York, and the alleged conspiracy  of the owner, management and/or tenants to frustrate and/or interfere with the reorganization  effort and determine what, if any, sanctions are appropriate. The Court’s December 23, 2010  Order (Docket No. 117) again ordered that Maria Valvi, Nicholas Gordon, Keith James, Frank  Rodriquez, Ronald Tantajulca, Jessica Gonzalez, Leidy Estevez, Fancisco Julca, Sergio Matos,  Mohammed Siddiqi, and Estevez Martinez, be served with notice to appear before the Court on  January 12, 2011. The record shows that Keith James, Frank Rodriquez, Ronald Tantajulca,  Jessica Gonzalez, Leydi Estevez a/k/a/ Leydi Estevez-Martinez, Francisco Julca, Sergio Matos  a/k/a Sergio Dematos, and Mohammed Siddiqi were served with notice of the January 12, 2011  hearing. See Affidavit/Certificate of Service (Docket No. 119). 

Carnegie. The Court is not ruling on the issue of improper or conflicting representation at this time but notes that it  is fairly obvious that counsel has put himself in a rather untenable position by accepting multiple representations.

The Court held a hearing on January 12, 2011 and heard the testimony of Maria Valvi,  Nicholas Gordon, and Igor Gornayer, property manager for Carnegie. None of the alleged  tenants appeared, filed any papers, or communicated with the Court in any way, including the  three alleged tenants who are represented by Mr. Molbert in certain State Court against Carnegie.  

DISCUSSION 

At issue in this case are eight alleged residential leases for the real property located at 577  Warren Street which, if created at all, were created on or about October 2010. Carnegie urges a  finding that the leases are invalid, and Mr. Gornayer, the property manager for Carnegie, testified  that the apartments are unoccupied. Carnegie alleges that Mr. Gordon entered into the eight  leases as an attempt by the principal of the Debtor, Ms. Valvi, and managing agent of the Debtor,  Mr. Gordon, to frustrate the confirmation process in order to retain the real estate for the Debtor  

and themselves2 

. Ms. Valvi is representing herself in this matter. Mr. Gordon, represented by  

counsel, maintains that the eight alleged leases are valid and that he had authority to enter into  them as the managing agent. Mr Gordon also states that he entered into the alleged leases for the  benefit of the Debtor’s estate and/or Carnegie.  

The Court is cognizant of the impact that its decision in this matter may have on the  alleged tenants of 577 Warren Street. For this reason, the Court took great pains to ensure that  the eight tenants named in the leases were informed of the time, place, and specific nature of the  December 17, 2010 and January 12, 2011 scheduled hearings. The record shows that each of the  tenants received notice of both hearing dates. In addition, counsel for Carnegie has also stated  

2 The Court notes that the Debtor failed to file an acceptable disclosure statement, did not submit a plan, and  apparently lacked the ability to structure a confirmable plan. 

on the record that various locations were searched to find and serve all of the tenants. The record  also shows that none of the tenants, three of which are represented by Mr. Gordon’s counsel in  State Court proceedings, appeared in Court on January 12, 2011. None of the tenants filed an  appearance in the case, none of them appeared to defend the alleged leases under oath, and none  of them attempted to contact the Court. Therefore, the Court cannot find that any of the eight  alleged tenants listed in the leases believe that they have a valid lease at 577 Warren Street, or if  they did, they were unwilling to provide testimony under oath to support their claims. The only  evidence and testimony that the Court has to support the legitimacy, in fact even the existence of  the alleged leases is from Mr. Gordon, a non-credible witness in the view of this Court. The  Court has found on numerous occasions that Mr. Gordon is not a credible witness and that Mr.  Gordon has a desire to delay Court proceedings. Mr. Gordon delayed the December 7, 2010  hearing when he had to return to his office for documents and cash which he had previously been  ordered to turn over to Carnegie; Mr. Gordon was not present at the Court’s December 23, 2010  hearing because he was allegedly out of the country; and Mr. Gordon, most recently, filed an  Order to Show Cause requesting an adjournment of the January 12, 2010 hearing based on an  issue that he had knowledge of since October 2010. The Court cannot and will not accept Mr.  Gordon’s testimony uncorroborated.  

The Court finds that Mr. Gordon did not have authority to enter into the eight alleged  leases. Offered into evidence was the managing agreement between the Debtor and Mr. Gordon.  See Rosen Exhibit F: Management Agreement. The document was provided to Carnegie by Mr.  Gordon. The managing agreement may be missing pages, however, as presented to the Court as  evidence, it is devoid of any authorization to Mr. Gordon to sign leases. See id. Moreover, even  if Mr. Gordon had authority under the managing agreement to enter into leases, the alleged 

October 2010 leases signed by Mr. Gordon are signed by him individually and do not disclose any claimed authority or capacity as a managing agent. See Statement on Motion For Contempt:  Exhibit C: Leases (Docket No. 94). Pursuant to New York law, “…An authorized representative  who signs his own name to an instrument (a) is personally obligated if the instrument neither  names the person represented nor shows that the representative signed in a representative  capacity…” N.Y. – U.C.C. § 3-403(2)(a). Therefore, the Court finds that at best Mr. Gordon  entered into the alleged October 2010 leases as an individual. The leases are not valid against  the Debtor. The eight alleged October 2010 leases for 577 Warren Street are invalid and void  without force and effect against the Carnegie.  

The Court finds that the Ms. Valvi and Mr. Gordon have repeatedly made attempts to  delay and frustrate the Court’s Confirmation Order (Docket No. 87). On August 20, 2010 the  Court held a hearing on the competing disclosure statements of the Debtor and Carnegie. The  Court approved Carnegie’s disclosure statement and set a hearing on Confirmation for October  18, 2010, giving the Debtor ample time to file an amended disclosure statement and plan. The  Court confirmed Carnegie’s plan on October 18, 2010, and on November 2, 2010, the Debtor  filed an Order to Show Cause requesting the Court to reconsider the confirmation of Carnegie’s  plan and allowing the Debtor to file an amended plan and disclosure statement (Docket No. 80).  In the Debtor’s Order to Show Cause, Ms. Valvi states that she was out of the country during the  summer and not aware of the events of the case. Ms. Valvi also states that there was a  misunderstanding with counsel for the debtor and was requested additional time to obtain new  counsel. The Court denied the Debtor’s Order to Show Cause because the Debtor presented no  basis for a revocation of confirmation for the Plan already confirmed, and the Debtor had more  than ample time and opportunity to file a proper Disclosure Statement and a confirmable Plan of 

Reorganization. However, as soon as November 25, 2010, counsel for Carnegie filed a Motion  for contempt for failure to comply with the Court’s Confirmation Order. The Court resolution  of the Motion for Contempt has since been delayed by Ms. Valvi and Mr. Gordon on several  occasions. The Court adjourned the December 17, 2010 evidentiary hearing on the  representation that the parties had reached a settlement. The Court then learned almost  immediately that the settlement had fallen apart and that Mr. Gordon was to take a trip out of the  country and was not going to be present at the December 23, 2010 hearing. Most recently, Ms.  Valvi and Mr. Gordon’s filed an Order to Show Cause on January 10, 2011 requesting time to  obtain new counsel. However, as Ms. Valvi’s November 2, 2011 letter to the Court shows, this  was not a new or urgent issue. The Court views the continued efforts of Ms. Valvi and Mr.  Gordon to delay and frustrate the Confirmation Order (Docket No. 87) as further contempt of the  Court and will deal with the issues of sanctions and damages at a later date. The Court also  notes that Mr. Gordon and Ms. Valvi have repeatedly made outrageous and unsubstantiated  allegations against both counsel for the Debtor, counsel for Carnegie, and others without any  evidentiary support. The Court views these allegations as improper and potentially actionable  and reserves the right to address them at a later date if necessary.  

CONCLUSION 

For the foregoing reasons, the Court finds that the leases and tenancies of Keith James,  Frank Rodriquez, Ronald Tantajulca, Jessica Gonzalez, Leidy Estevez, Fancisco Julca,  Sergio Matos, Mohammed Siddiqi, and Estevez Martinez at 577 Warren Street, Brooklyn, 

New York, void and without force and effect against Carnegie and/or the Debtor.  The Court will address the issues of contempt, sanctions, and damages, if any, at a later  date.  

____________________________ 

Dated: January 18, 2011  Brooklyn, New York

Joel B. Rosenthal 

United States Bankruptcy Judge 

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