SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK

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In the Matter of the Application of BLEECKER CHARLES CO.,          : Index No.: 110835/02
                                                                   :
                              Petitioner,                          :
                                                                   :
For the Inspection of the Minutes of Meetings of the               : Hon. Joan A. Madden
Directors and Shareholders and Record of Shareholders              :    
of 350 Bleecker Street Apartment Corp.                             : AFFIDAVIT IN    
                                                                   : OPPOSITION TO
                    -against-                                      : PETITIONER'S MOTION 
                                                                   : AND IN SUPPORT OF
350 BLEECKR STREET APARTMENT CORP.,                                : RESPONDENT'S CROSS
                                                                   : MOTION
                              Respondent.                          :
                                                                   :
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STATE OF NEW YORK      )
                        ss:
COUNTY OF NEW YORK     )

          MARK LILIEN, being duly sworn, deposes and says:

          1.          I am a shareholder and Chairman of the board of directors of respondent, 350 Bleecker Street Apartment Corp. (the "Coop"). I submit this affidavit (a) in opposition to petitioner's application for an order (i) pursuant to Business Corporation Law §624 and/or common law directing the Coop to turn over various books and records; and (ii) for attorneys' fees; and (b) in support of the Coop's cross motion for an order (i) dismissing the proceeding; and (ii) awarding sanction in its favor as a result of the frivolous nature of this proceeding. I am personally familiar with the facts and circumstances set forth herein.

          2.          Petitioner was the sponsor of the conversion of the Coop and continues to own 23.47% of the Coop's shares (hereafter "petitioner" or "sponsor"). Petitioner's application must be denied (and is indeed frivolous) because more than six months ago, petitioner was offered each and every item of information it requests herein, the sole exception being, that because the sponsor and the Coop are embroiled in an on-going litigation, the Coop insisted that its board minutes be redacted so that any references to the litigation are not made available to petitioner.

          3.          Further, the sponsor has made no request for the information requested herein since November 2001, when it was last told that the redacted documents were available for review. If it still wanted to review documents, the sponsor could have easily contacted the Coop's counsel. Instead, for reasons that I do not understand, the sponsor commenced this proceeding with absolutely no prior notice to the Coop.

          4.          Finally, the disingenuousness of the sponsor's request is evident from a review of the Coop's website at http://www.350bleecker.com (the "350 Website"). Among other things, the 350 Website includes up-to-date newsletters which set forth the issues discussed by the board at each meeting (with the exception of litigation issues). Thus, petitioner's request for the un-redacted board minutes can only be for the purpose of gaining an unfair advantage in the on-going litigation [1].

BACKGROUND

          5.          Counsel for the Coop informs me that Business Corporation Law §624, pursuant to which the sponsor commenced this proceeding, does not require that the Coop permit shareholders to review minutes of board of directors meetings. That is a right which exists pursuant to common law and, as such, the good faith of the shareholder requesting the information is an important consideration. Accordingly, I will set forth a brief explanation of the history of the relationship between the sponsor and the Coop.

          6.          The sponsor converted the premises to cooperative ownership by an offering plan which was declared effective in or about April 1985. I have resided at the Coop since 1986 and have been a member of its board of directors since 1987. From at least that time, Kenneth B. Newman ("Newman"), a principal of the sponsor, also held the following positions (whether individually or as an entity), many simultaneously: shareholder; board member, director and officer (he served as president from 1986 until 1999); mortgagee; legal counsel; managing agent; transfer agent; and lessee of the commercial property.

          7.          At the shareholders' meeting held on November 9, 1999 the Coop was able to muster enough votes so that Newman would no longer have a seat on the seven-person board. This was the first time since 1986 that Newman did not serve on the board (and he has not been elected since).

          8.          After consultation with the Coop's independent counsel (i.e., counsel other than Newman), by notice dated July 9, 2000, the Coop sought to terminate the garage lease, which was a "sweetheart lease" entered into between the Coop and petitioner on or about the time of conversion, pursuant to Section 3607 of the Condominium and Cooperative Protection and Abuse Relief Act, 15 U.S.C §§ 3601 et. seq.

          9.          In response to the notice of termination, petitioner commenced an action entitled Bleecker Charles Company v. 350 Bleecker Street Apartment Corporation v. Bleecker Parking Corp., USDC, SDNY, Docket Number 00 Civ 7827 (GEL) (the "Garage Lease Litigation"). The issues in the Garage Lease Litigation have been decided by the District Court pursuant to two decisions dated October 3, 2001 [granting summary judgment in favor of sponsor] and April 10, 2002 [awarding attorneys' fees to the sponsor]. The Coop has already appealed the first decision to the Second Circuit Court of Appeals. [2]

THE COOP AGREED TO PROVIDE
THE SPONSOR WITH THE DOCUMENTS,
AS REQUESTED, REDACTING NOTATIONS
CONCERNING ISSUES AFFECTING THE COOP'S
STRATEGY IN THE GARAGE LEASE LITIGATION

          10.          Six days after the issuance of the October 3, 2001 decision in the Garage Lease Litigation, and before sponsor's motion in that action for attorneys' fees was made on November 21, 2002, Newman apparently asked to review the Coop's minutes and shareholders' list. By e-mail dated October 9, 2001, he wrote (see exhibit A to the sponsor's moving affidavit)

          11.          The sponsor did not however forward an affidavit, which I understand is required by BCL §624, until on or after October 30, 2001 (see exhibit A to the sponsor's moving affidavit ).

          12.          The Coop consulted with counsel as it had never before been confronted with a situation where a shareholder with whom it was in litigation asked to see board minutes. We first dealt with the issue of a shareholders' list as a shareholders' meeting and board election had been noticed for November 13, 2001. On or about November 1, 2001, the Coop advised Newman to call the managing agent to review the shareholders' list or, alternatively, to provide the managing agent with any documents which the sponsor wanted forwarded to the shareholders (and a check for postage) so that the agent would send the documents as the sponsor directed.

          13.          As set forth in the accompanying affidavit of David Goodman, the sponsor never requested that the managing agent mail documents on his behalf. As to the shareholders' list, Newman was told that it had not substantially changed since the time Newman served as managing agent. When given this information, Newman did not pursue the issue further except through a communication with the Coop's counsel, which is described below, at &19-20).

          14.          As to Newman's request for board minutes, counsel wrote to Newman explaining the Coop's concern about providing unredacted minutes during the pendency of the Garage Lease Litigation. By letter dated November 5, 2001, the Coop's counsel, Andrew P. Brucker ("Brucker") wrote (Exhibit D):

          15.          On November 9, 2001 (a Friday), Brucker wrote to Newman explaining that counsel had "received the redacted minutes today, and so as not to delay the process any longer than necessary, I will review them at home this weekend. I will complete my review and contact you on Monday" (Exhibit E).

          16.          On November 13, 2001 (Tuesday), Brucker wrote to the sponsor that the redacted board minutes were available for review and will "be available at your convenience in my office". Brucker added, "[p]lease contact me at any time, and I will make sure that you can review same whenever you wish" (Exhibit F). [4]

          17.          After receipt of a letter from the sponsor on November 13, 2001 (Tuesday), it came to Brucker's attention that the November 9 letter had not been sent on November 9 by facsimile transmission as intended because the sponsor's line was constantly busy. Accordingly, he e-mailed to the sponsor, explaining that the board was willing to provide copies of redacted minutes even though Brucker seriously questioned whether the sponsor was entitled to minutes at all. He wrote:

          18.          Thereafter, the election was held on November 13, 2001 and Newman was not successful.

          19.          On November 14, Brucker again wrote to the sponsor on the issue of document review (Exhibit I):

          20.          Thereafter, there was one more set of correspondence. The sponsor wrote on November 16, 2001 (Exhibit J), addressing various issues. In response, Brucker reiterated the Coop's position and concerns (Exhibit K):

          21.          To the best of my knowledge, the sponsor thereafter moved for an award of attorneys' fees in the Garage Lease Litigation and did not make any further requests for copies of shareholders' lists or minutes since that time until the commencement of this litigation.

THE SPONSOR'S CONDUCT
IN COMMENCING THIS
PROCEEDING, PARTICULARLY
WITH NO COMMUNICATION ON
THE POINTS RAISED HEREIN IN
THE LAST SIX MONTHS, IS FRIVOLOUS

          22.          I am advised by counsel that conduct is frivolous when, among other things, it is designed to harass or injure another. As set forth above, the sponsor was offered documents, elected not to accept them, let the issue lay dormant for several months and then, without any prior notice or request, commenced this proceeding.

          23.          Moreover, the purported basis for its request for minutes is absolutely unsubstantiated. The sponsor claims the minutes are required in order for the sponsor to file an amendment to the offering plan. However, this assertion is made with no back-up documentation, no correspondence from the Attorney General and no indication, assuming the Attorney General does indeed require the minutes, that the sponsor requested that they be accepted in redacted form.

          24.          Finally, the sponsor requests attorneys' fees yet, counsel for the Coop advises me that the law is settled that such fees cannot be awarded in the context of a proceeding such as this.

CONCLUSION

          25.          Notwithstanding the disputes between the Coop and the sponsor, the Coop remains ready to permit the sponsor to review the shareholders' list and copies of board minutes, as redacted.

          26.           For the foregoing reasons, and those set forth in the accompanying memorandum of law, the Coop respectfully requests that the sponsor's motion be denied in its entirety and that the Court grant the Coop's cross-motion to dismiss and for sanctions in the form of attorneys' fees.

/s/ Mark Lilien
MARK LILIEN

Exhibit A

A cover page from the website and the site map.

Exhibit B

Several newsletters were included in this exhibit.

Exhibit C

A copy of the lawsuit index was included in this exhibit.

Exhibit D

A fax from Andrew Brucker to Kenneth B. Newman dated November 5, 2001 was included in this exhibit.

Exhibit E

A fax from Andrew Brucker to Kenneth B. Newman dated November 9, 2001 was included in this exhibit.

Exhibit F

A fax from Andrew Brucker to Kenneth B. Newman dated November 13, 2001 was included in this exhibit.

Exhibit G

A letter from Kenneth B. Newman to Andrew Brucker dated November 13, 2001.

Exhibit H

lawsuit index

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