Machne Menachem


Posted in Exhibits by machnemenachem on April 26, 2009





HERSHKOP, (a/k/a/ “Lelli”), SENIOR
HERSHKOP, (a/k/a/ “Gadi”), LEVI HARTMAN,


CARL M. BORNSTEIN, under penalties of perjury, and pursuant to Title 18, United States Code, 51746, hereby affirms and says:

1. I am an attorney duly admitted to practice in the State of New York since 1968. I have been a member in good standing of the bar of the United States District Courts for the Eastern and Southern Districts of New York since 1971, of the United States Court of Appeals for the Second Circuit since 1975; and of the United States Supreme Court since 1980.

2. Since approximately December 18, 1997 I have been lead counsel for plaintiffs Machne Menachem, Inc, (“CAMP”) and Yaakov Spritzer as well as for Meir Schreiber, though he is not a party to this action, in his capacity as a director of the CAMP. (Hereinafter collectively referred to as “clients”). During the same time, Bennett M. Epstein, Esq., who is also duly admitted in the State of New York and to the bar of this Court, has been co- counsel with me for the clients. (Hereinafter referred to collectively as “plaintiffs’ counsel”).

3. In order not to prejudice our clients in the case, and with the permission of the Court, this affirmation is submitted ex parte; i.e., copies will have been served only upon our clients but not upon the defendants.

4. Both Mr. Spritzer and Mr. Schreiber jointly undertook the financial responsibility for the conduct of this litigation pursuant to a written retainer agreement which they signed in their personal capacities.

5. Notwithstanding their personal commitment, because the CAMP was a charitable institution plaintiffs’ counsel agreed to charge fees at a reduced hourly rate.

6. Shortly after July, 17, 1998, when plaintiff’s motion to amend the complaint in this case was decided, a division between Mr. Spritzer and Mr. Schreiber became apparent and difficulties in preparing the case and representing our clients became manifest.

7. At that time, the CAMP was in the middle of its season. At the same time, Mr. Schreiber absented himself from New York City for most of the summer. Generally, he was not available for consultation though such discussions were needed.

8. At the same time, Mr. Schreiber did not meet his financial obligation to pay the fees and expenses for the litigation of this case as he had agreed both with Mr. Spritzer and plaintiffs’ counsel.

9. This difficulty also delayed plaintiffs’ counsel in obtaining certain tape recordings of threats made to Mr. Schreiber by one of the defendants. These were supposed to have been delivered in the Spring. They were not turned over until the Fall. The possible prejudice to the clients’ case was brought to their attention throughout the summer.

10. Also during that time and since, plaintiffs’ counsel has repeatedly asked for the identity of campers who it is believed did not return to the CAMP because of the problems caused by the defendants during and after the 1996 season. This was needed to develop evidence of damages attributable to defendants’ activities and is an important component of plaintiffs’ claim for damages. This information, which is needed for the plaintiffs’ direct case, has not been turned over yet.

11. In an effort to resolve these difficulties, plaintiffs’ counsel and their clients met one evening in August, 1998.

12. Though at that time there were several applications by the defendants pending before the Court, and the Court was inviting settlement of the case, neither the meeting nor a response to the written settlement proposed by the defendants could be addressed until Mr. Schreiber returned to the City and the CAMP’s season ended.

13. During the meeting, terms of possible settlement, as well as strategy and the burdens of the case to Messrs. Spritzer and Schreiber were discussed at length by counsel with the clients.

14. As a result of that meeting, a general strategy for discovery was developed. The clients also agreed to pay a bill for legal services that was then outstanding. A substantial payment was promised in August and was made in early September, 1998. At the same time, plaintiffs agreed to pay the balance of the bill by mid-September, 1998. No additional payment has been made.

15. It was also understood at the meeting that depositions would be noticed in September and taken after the High Holidays.

16. It was also understood by plaintiffs’ counsel that Mr. Schreiber would be contributing funds to the CAMP for the legal fees and expenses that were not paid at the time of the meeting.

17. Because of the burden that these expenses and the litigation itself was beginning to present, plaintiff’s counsel suggested broadly that the clients consider attempting to settle the case. More specifically, plaintiffs’ counsel recommended reducing the amount of plaintiffs’ damage demand that was going to be sent to the defendants as part of plaintiffs response to defendants’ proposal.

18.  Mr. Schreiber specifically stated that he was opposed to lowering the amount damage demand. Counsel complied with his wishes.

19. However, the clients have not paid the legal fees that have been owed for a considerable time. More particularly, it appears that Mr. Schreiber has not made the contribution he said he would in order for the fees to be paid.

20. In the meantime there has been conduct by the clients that borders on a “bait and switch.” First, in late September, plaintiffs’ counsel was told that the CAMP was not issuing a check to plaintiffs’ counsel until it was certain that there were adequate funds in the account. Then, a check was brought to Court when a hearing was scheduled but it did not have the required signature of Mr. Schreiber. Mr. Schreiber had been expected to attend the hearing but did not come as scheduled.

21. Days later, after Mr. Schreiber apparently signed the check, it was shown to Mr. Epstein with both signatures. At that point, however, he was told that there still were not adequate funds in the account.

22. Despite these difficulties and with the express consent of the clients, plaintiffs’ counsel had initiated discovery and noticed six depositions throughout October and early November.

23. When it became apparent that the outstanding legal fees and expenses were not going to be paid, the clients were informed in writing more than once that unless the full amount due was paid, individual depositions would have to be cancelled since counsel could not incur the additional costs associated with these depositions.

24. The clients were expressly informed that under the terms of the retainer agreement that counsel was not obligated to advance costs of litigation and that the right to resign the representation was preserved if fees or requested retainers were not paid.

25. Nothing has changed throughout October, except for ante partial payment of expenses. As a result plaintiffs’ counsel had to cancel three depositions of defendants. A fourth defendant cancelled his own deposition. The remaining two depositions were of non-party witnesses; however, one non-party witness simply failed to appear and the other sought the postponement that is the subject of the hearing scheduled before Magistrate-Judge Chrein.

26.  At this point, therefore, depositions have to be rescheduled or re-noticed. It appears that appropriate applications to compel discovery will be needed. Similarly, a motion for a default judgment is now appropriate and plaintiffs’ direct case needs to be prepared.

27. Additionally, certain aspects of document discovery need to be addressed and certain witnesses have to be interviewed in order to develop the plaintiffs’ proof of certain events as well as damages. We have been unable to schedule these interviews despite several requests on our part.

28.  Plaintiffs’ counsel can not proceed any further. We can neither prepare for trial nor settle. A significant amount of money is owed to plaintiffs’ counsel by the clients despite the reduction in rates. Plaintiffs’ counsel are not in a position to and, under the terms of the retainer agreement, are not obligated, to underwrite this litigation no matter what the prospect of success might be, moreover, the terms of the retainer agreement allow us to withdraw at this point with the Court’s permission.

29. We also note that since September, 1998, Mr. Schreiber has been consistently unavailable to plaintiffs’ counsel to discuss this situation. While there have been several conversations by both plaintiffs’ counsel with Mr. Spritzer concerning the case, several efforts to arrange a meeting with Mr. Schreiber have been unsuccessful. Moreover, in some of these discussions it now appears that the clients are suggesting that the time spent in preparation should be reduced beyond what is minimally necessary to represent them professionally.

30.  At this point, therefore, without communication with Mr. Schreiber and without payment of fees and expenses plaintiffs’ counsel can not fulfill their professional responsibility to any of the clients, including the CAMP, or their obligations to the Court as trial counsel.

Dated:    November 9, 1998
New York, New York


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