-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AlKje22Sg3QtrnmGD7fXsV9akOgbQue5Iy1Z8SbVyk7NniKQU5yzg1ZTscgeIQq5 ollytOoje+6Jh5ZfmtkXIQ== 0000895345-98-000026.txt : 19980128 0000895345-98-000026.hdr.sgml : 19980128 ACCESSION NUMBER: 0000895345-98-000026 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19980126 SROS: NYSE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: FIRST UNION REAL ESTATE EQUITY & MORTGAGE INVESTMENTS CENTRAL INDEX KEY: 0000037008 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 346513657 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-19676 FILM NUMBER: 98513193 BUSINESS ADDRESS: STREET 1: 55 PUBLIC SQUARE STREET 2: STE 1900 CITY: CLEVELAND STATE: OH ZIP: 44113 BUSINESS PHONE: 2167814030 MAIL ADDRESS: STREET 1: 55 PUBLIC SQUARE SUITE 1910 CITY: CLEVELAND STATE: OH ZIP: 44113 FORMER COMPANY: FORMER CONFORMED NAME: FIRST UNION REALTY DATE OF NAME CHANGE: 19691012 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: GOTHAM PARTNERS LP /NY/ CENTRAL INDEX KEY: 0000899983 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 363593298 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 110 EAST 42ND ST 18TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10017 BUSINESS PHONE: 2122860300 MAIL ADDRESS: STREET 1: 110 EAST 42 ND ST 18TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10017 SC 13D/A 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. 12) First Union Real Estate Equity and Mortgage Investments - -------------------------------------------------------------------------------- (Name of Issuer) Shares of Beneficial Interest, $1.00 par value - -------------------------------------------------------------------------------- (Title of Class of Securities) 337400105 ----------------------------------------------- (CUSIP Number) Stephen Fraidin, P.C. Fried, Frank, Harris, Shriver & Jacobson One New York Plaza New York, New York 10004 (212) 859-8140 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) January 26, 1998 ----------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box |_|. Check the following box if a fee is being paid with the statement |_|. (A fee is not required only if the reporting person: (1) has a previous statement on file reporting beneficial ownership of more than five percent of the class of securities described in Item 1; and (2) has filed no amendment subsequent thereto reporting beneficial ownership of five percent or less of such class.) (See Rule 13d-7.) NOTE: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). SEC1746(12-91) Page 1 of 5 pages SCHEDULE 13D CUSIP NO. 33740015 PAGE 2 of 5 PAGES 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Gotham Partners, L.P. 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X] (b) [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS* WC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION New York, U.S.A. NUMBER OF 7 SOLE VOTING POWER 2,501,951 Shares SHARES BENEFICIALLY 8 SHARED VOTING POWER 0 OWNED BY EACH REPORTING 9 SOLE DISPOSITIVE POWER 2,501,951 Shares PERSON WITH 10 SHARED DISPOSITIVE POWER 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,501,951 Shares 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ] EXCLUDES CERTAIN SHARES* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 8.89% 14 TYPE OF REPORTING PERSON* PN *SEE INSTRUCTIONS Page 2 of 5 pages SCHEDULE 13D CUSIP NO. 337400105 PAGE 3 of 5 PAGES 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Gotham Partners II, L.P. 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X] (b) [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS* WC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION New York, U.S.A. NUMBER OF 7 SOLE VOTING POWER 30,449 Shares SHARES BENEFICIALLY 8 SHARED VOTING POWER 0 OWNED BY EACH REPORTING 9 SOLE DISPOSITIVE POWER 30,449 Shares PERSON WITH 10 SHARED DISPOSITIVE POWER 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 30,449 Shares 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ] EXCLUDES CERTAIN SHARES* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.11% 14 TYPE OF REPORTING PERSON* PN *SEE INSTRUCTIONS Page 3 of 5 pages This Amendment No. 12 amends and supplements the Statement on Schedule 13D (the "Schedule 13D") relating to the shares of Beneficial Interest, par value $1.00 per share ("Shares"), of First Union Real Estate Equity and Mortgage Investments, an Ohio business trust (the "Company") previously filed by Gotham Partners, L.P. ("Gotham") and Gotham Partners II, L.P. ("Gotham II" and together with Gotham, the "Reporting Persons"), both New York limited partnerships. Capitalized terms used and not defined in this Amendment have the meanings set forth in the Schedule 13D. Except as specifically provided herein, this Amendment does not modify any of the information previously reported on the Schedule 13D. Item 4 is hereby amended to add the following information: "Item 4. Purpose of the Transaction On January 23, 1998, counsel for the Reporting Persons filed a Motion for Preliminary Injunction in the United States District Court for the Northern District of Ohio, Eastern Division (the "U.S. District Court"). A copy of such Motion for Preliminary Injunction is attached as Exhibit 18 hereto and incorporated herein by this reference. On January 23, 1998, counsel for the Reporting Persons filed a Memorandum in Response to Motion for Expedited Hearing and Cross-Motion to Schedule Matters for that Hearing in the U.S. District Court. A copy of such Memorandum is attached as Exhibit 19 hereto and incorporated herein by this reference. On January 26, 1998, counsel for the Reporting Persons filed an Amended Answer and Counterclaims in the U.S. District Court relating to the Company's Complaint for Preliminary Injunction, Permanent Injunction and Declaratory Relief, removed by the Reporting Persons to the U.S. District Court on January 20, 1998. A copy of such Amended Answer and Counterclaims is attached as Exhibit 20 hereto and incorporated herein by this reference." Item 7 is hereby amended to add the following information: "Item 7. Material to be Filed as Exhibits 18. Motion for Preliminary Injunction filed in the U.S. District Court by counsel for the Reporting Persons on January 23, 1998. 19. Memorandum in Response to Motion for Expedited Hearing and Cross-Motion to Schedule Matters for that Hearing filed in the U.S. District Court by counsel for the Reporting Persons on January 23, 1998. 20. Amended Answer and Counterclaims filed in the U.S. District Court by counsel for the Reporting Persons on January 26, 1998." Page 4 of 5 pages After reasonable inquiry and to the best of our knowledge and belief, the undersigned certify that the information set forth in this statement is true, complete and correct. January 26, 1998 GOTHAM PARTNERS, L.P. By: Section H Partners, L.P., its general partner By: Karenina Corporation, a general partner of Section H Partners, L.P. By: /s/ William A. Ackman ------------------------------- William A. Ackman President By: DPB Corporation, a general partner of Section H Partners, L.P. By: /s/ David P. Berkowitz ------------------------------- David P. Berkowitz President GOTHAM PARTNERS II, L.P. By: Section H Partners, L.P., its general partner By: Karenina Corporation, a general partner of Section H Partners, L.P. By: /s/ William A. Ackman ------------------------------- William A. Ackman President By: DPB Corporation, a general partner of Section H Partners, L.P. By: /s/ David P. Berkowitz ------------------------------- David P. Berkowitz President Page 5 of 5 pages EX-99.1 2 EXHIBIT 18 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF OHIO EASTERN DIVISION ) FIRST UNION REAL ESTATE EQUITY AND ) MORTGAGE INVESTMENTS, ) ) Plaintiff, ) CIVIL ACTION NO. 98 CV 0105 ) - against - ) JUDGE ALDRICH ) GOTHAM PARTNERS, L.P., et al., ) ) Defendants and Counterclaimants. ) ) GOTHAM'S MOTION FOR PRELIMINARY INJUNCTION Defendants and Counterclaimants Gotham Partners, L.P. and Gotham Partners II, L.P. (collectively, "Gotham"), move this Court, pursuant to Rule 65 of the Federal Rules of Civil Procedure, for an order preliminarily enjoining plaintiff First Union Real Estate Equity and Mortgage Investments ("First Union"), its directors, officers, Trustees, successors, agents, servants, subsidiaries, employees and attorneys, and all persons acting in concert or participating with them, from: 1. making any further solicitation of First Union shareholders in connection with First Union's Annual Meeting scheduled for April 14, 1998 ("Annual Meeting") unless and until First Union has made the required filings under Section 14(a) of the Securities Exchange Act of 1934 ("the 1934 Act"), 15 U.S.C. Section 78n(a), and the SEC Rules promulgated thereunder; 2. making material misrepresentations and false and misleading statements in the course of soliciting proxies for First Union shares; 3. taking any actions that would dilute or interfere with Gotham's voting, nomination, and proposal rights or in any other way discriminate against Gotham in the exercise of its rights with respect to its First Union shares; and 4. from taking any steps to impede or frustrate the ability of First Union's stockholders to consider and make their own determination on Gotham's nominations and proposal being submitted at the Annual Meeting or taking any other action to thwart or interfere with the proxy contest for the Annual Meeting; 5. from taking actions to deprive Gotham of its right to receive dividends, interest, or other distributions on the alleged ground that Gotham's shares are Excess Securities under Article VI, Section 6 of First Union's By-Laws (the "By-Laws"); 6. from obstructing Gotham's proposal to increase the size of First Union's Board of Trustees ("the Board") and Gotham's nomination of candidates to sit on the Board on the alleged ground that the proposal and nomination are in violation of First Union's Declaration of Trust (the "Declaration of Trust"); 7. from obstructing or preventing Gotham's solicitation of proxies on behalf of its proposal and its nominees on the alleged ground that such solicitation would violate the terms and/or conditions of the Declaration of Trust and By-Laws. The bases for Gotham's Motion will be set forth more fully in Gotham's forthcoming Memorandum in Support of Gotham's Motion for Preliminary Injunction with supporting affidavits, to be served and filed in accordance with this Court's scheduling instructions. Dated: January 23, 1998 Cleveland, Ohio OF COUNSEL: /s/ Michael J. Garvin --------------------------------- HAHN LOESER & PARKS LLP David C. Weiner (0013351) Michael J. Garvin (0025394) 3300 BP America Building 200 Public Square Cleveland, Ohio 44114-2301 (216) 621-0150 - and - OF COUNSEL: FRIED, FRANK, HARRIS, SHRIVER /s/ Alexander R. Sussman & JACOBSON ---------------------------------- Alexander R. Sussman(FN1) 25th Floor One New York Plaza New York, New York 10004-1980 (212) 859-8000 Attorneys for Defendants and Counterclaimants TO: Frances Floriano Goins SQUIRE, SANDERS & DEMPSEY L.L.P. Attorneys for Plaintiff 4900 Key Tower 127 Public Square Cleveland, Ohio 44114-1304 - -------- [FN] 1 Application to appear pro hac vice being submitted. CERTIFICATE OF SERVICE A copy of the foregoing Gotham's Memorandum in Response was sent by messenger to Frances Floriano Goins, Squire, Sanders & Dempsey L.L.P., 4900 Key Tower, 127 Public Square, Cleveland, Ohio 44114-1304, attorneys for Plaintiff, this 23rd day of January, 1998. /s/ Michael J. Garvin ----------------------------------- One of the attorneys for Defendants and Counterclaimants EX-99.2 3 EXHIBIT 19 IN THE UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF OHIO EASTERN DIVISION FIRST UNION REAL ESTATE EQUITY ) CIVIL ACTION NO. 98 CV 0105 AND MORTGAGE INVESTMENTS ) ) JUDGE ANN ALDRICH Plaintiff, ) ) v. ) ) GOTHAM PARTNERS, L.P., et al. ) ) Defendants and Counterclaimants. ) GOTHAM'S MEMORANDUM IN RESPONSE TO MOTION FOR EXPEDITED HEARING AND CROSS-MOTION TO SCHEDULE ADDITIONAL MATTERS FOR THAT HEARING Defendants and Counterclaimants ("Gotham") submit this memorandum in response to First Union's Motion for Expedited Hearing on Removal and Remand, filed on January 21, 1998. Gotham will file its memorandum and affidavits in opposition to First Union's motion to remand within the time permitted under the Local Rules, or at such earlier time as shall be established by the Court. Gotham also has served and filed today its Motion for Preliminary Injunction to be briefed and heard on a schedule convenient to this Court, which, in addition to seeking relief on Gotham's federal proxy counterclaims, also seeks relief on the identical issues First Union raises in its Complaint and in its state court motion papers. Furthermore, Gotham hereby requests a Case Management Conference under Local Rule 16.3 at a time convenient for this Court. Gotham agrees that an expedited hearing should be scheduled. However, Gotham submits that the hearing date could be set by the Court as late as March 10, 1998, without prejudicing any of the parties. This would allow the Court sufficient time to rule on the issues presented at the hearing and allow the parties ample time before First Union's April 14, 1998 Annual Meeting to implement any resulting orders by the Court. In addition, Gotham requests that any hearing to be scheduled on the motion to remand also consider the parties' motions for preliminary injunctive relief, including (1) plaintiff First Union's requests for relief made in the state court, which are mirror-image claims to Gotham's counterclaims on which Gotham seeks relief; and (2) Gotham's motion for a preliminary injunction. I. FIRST UNION'S MOTION TO REMAND IS MERITLESS We here summarize for the Court's benefit the points that Gotham will establish in responding to First Union's motion to remand. Pursuant to 28 U.S.C. Sections 1441 and 1446, Gotham removed this action based on this Court's diversity jurisdiction, because "the matter in controversy exceeds the sum or value of $75,000, exclusive of interests and costs, and is between citizens of different States." See 28 U.S.C. Section 1332(a)(1). Gotham properly complied with the procedure under 28 U.S.C. Section 1446(a) in filing a Notice of Removal in this Court "containing a short and plain statement of the grounds for removal...." On the merits of the removal, as will be demonstrated by affidavit in Gotham's response to First Union's motion to remand or, if necessary, at the hearing on that motion, First Union's complaint is within the diversity jurisdiction of this court because: 1) There is complete diversity of citizenship between the parties, since none of the Gotham defendants' general partners or limited partners, and none of the entities comprising any of them, are citizens of Ohio, for purposes of 28 U.S.C. Section 1332; and 2) The sum or value of the matter in controversy in First Union's Complaint far exceeds the $75,000 jurisdictional amount, as demonstrated on the face of First Union's Complaint and its motion papers. According to its averments, absent the relief demanded in the Complaint, (a) "change in control" provisions in First Union's credit and other agreements would be triggered causing "irreparable damage," Compl. Paragraph 46, and (b) First Union, a company with a $1 billion enterprise value and over $500 million market capitalization, and its stockholders will suffer "irreparable harm." First Union's State Court Motion for Preliminary Injunction at 2-3 (appended to Mem. In Support of Motion to Remand as Ex. A.) It is hard to imagine how such irreparable damage and harm could have a value of less than $75,000 to First Union and its stockholders. Moreover, First Union seeks a determination that Gotham's shares are "Excess Securities pursuant to ... Article VI, Section 6 of First Union's By-Laws, that have no voting rights ... and are not entitled to receive dividends, interest or other distributions." Id. at Paragraph 1. Such relief, which would damage Gotham by depriving it of its voting rights on stock worth approximately $40 million and confiscating over $1 million per year in dividends received by Gotham on that stock, while benefitting First Union annually by over $1 million in saved dividend payments, obviously more than satisfies the $75,000 jurisdictional requirement. II. THE EXPEDITED HEARING SHOULD CONSIDER THE PARTIES' REQUESTS FOR PRELIMINARY RELIEF The underlying subject matter of this action is the upcoming proxy contest for election of Trustees at First Union's Annual Meeting to be held on April 14, 1998 ("Annual Meeting"). Gotham seeks protection of its proxy rights in this Court. Indeed, First Union explicitly is attempting to preclude Gotham from mounting the proxy contest at all. See id. at 3-4 (conceding that First Union's relief concerns an "inevitable proxy contest"); see also First Union's Motion for an Expedited Hearing at pp. 2-3 (acknowledging that the relief First Union seeks is intertwined with the proxy contest). Accordingly, Gotham's counterclaims in its original Answer (and in its Amended Answer and Counterclaims) include allegations of proxy violations by First Union for which this court has exclusive jurisdiction under Section 27 of the Securities Exchange Act of 1934, 15 U.S.C. Section 78aa. See Am. Ans. and Ccls. at 9-16, 21-22 (Counts I - III, Wherefore Paragraphs (a)-(e)). Gotham's motion for preliminary injunction seeks to redress those proxy violations to ensure First Union's future compliance with the SEC's proxy rules. The parties' respective state law claims relate to the upcoming proxy contest and both parties seek injunctive relief concerning what nominations may be made and voted upon and who may vote at the Annual Meeting. Compare Compl., pp. 13-14, Paragraph A with Am. Ans. and Counterclaims, pp. 22-23 (Paragraphs (f)-(h)). Those issues are intertwined with Gotham's proxy violation counterclaims which can be heard only in federal court. Gotham respectfully submits that, even if the Court finds that it does not have diversity jurisdiction over the state law claims, it clearly has supplemental jurisdiction over them, as both parties' state law claims form part of the same case or controversy. See 28 U.S.C. Section 1367. Consequently, this Court will be ruling on Gotham's proxy violation claims (and First Union's proxy claims, if they have any), and will be hearing Gotham's state law claims as well. We therefore respectfully suggest, as a matter of judicial administration and economy, as well as to avoid potentially conflicting decisions between this Court and the state court, that all preliminary requests for relief should be adjudicated at the same hearing at which this Court hears First Union's motion to remand. Moreover, we further suggest that an appropriate briefing schedule should be proposed by the parties and so ordered by the Court. As noted earlier, Gotham submits that the requested hearing may be scheduled on any date prior to March 10, 1998, without prejudice to any party, in view of the April 14 Annual Meeting date. CONCLUSION For all of the foregoing reasons, Gotham respectfully requests that this Court schedule a Case Management Conference at this Court's convenience, at which this Court may set a date on or before March 10, 1998, to hear the motion to remand and Gotham's and First Union's respective motions for preliminary injunction, and an appropriate briefing schedule for those motions. Respectfully submitted, Dated: January 23, 1998 Cleveland, Ohio OF COUNSEL: /s/Michael J. Garvin ----------------------------- David C. Weiner (0013351) HAHN LOESER & PARKS LLP Michael J. Garvin (0025394) 3300 BP America Building 200 Public Square Cleveland, Ohio 44114-2301 (216) 621-0150 - and - OF COUNSEL: /s/ Alexander R. Sussman FRIED, FRANK, HARRIS, SHRIVER ----------------------------- & JACOBSON Alexander R. Sussman(FN1) 25th Floor One New York Plaza New York, New York 10004-1980 (212) 859-8000 Attorneys for Defendants and Counterclaimants - -------- [FN] 1 Application to appear pro hac vice being submitted CERTIFICATE OF SERVICE A copy of the foregoing Gotham's Memorandum in Response was sent by messenger to Frances Floriano Goins, Squire, Sanders & Dempsey L.L.P., 4900 Key Tower, 127 Public Square, Cleveland, Ohio 44114-1304, attorneys for Plaintiff, this 23rd day of January, 1998. /s/ Michael J. Garvin ----------------------------------- One of the attorneys for Defendants and Counterclaimants EX-99.3 4 EXHIBIT 20 IN THE UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF OHIO EASTERN DIVISION FIRST UNION REAL ESTATE EQUITY ) CIVIL ACTION NO. 98CV0105 AND MORTGAGE INVESTMENTS ) 55 Public Square, Suite 1900 ) Cleveland, Ohio 44113, ) ) JUDGE ALDRICH Plaintiff, ) ) v. ) ) AMENDED GOTHAM PARTNERS, L.P. ) ANSWER AND 110 East 42nd Street ) COUNTERCLAIMS New York, New York 10017, ) ) and ) ) GOTHAM PARTNERS II, L.P. ) 110 East 42nd Street ) New York, New York 10017, ) ) Defendants and Counterclaimants. ) For their Answer and Counterclaims against First Union Real Estate Equity and Mortgage Investments ("First Union"), Defendants Gotham Partners, L.P.("Gotham I") and Gotham Partners II, L.P. ("Gotham II") (Gotham I and Gotham II collectively hereinafter the "Gotham Partnerships") state as follows: 1. Deny each and every allegation of Paragraph 1 of the Complaint except deny knowledge or information sufficient to form a belief as to why First Union was formed and admit that First Union is governed by, among other things, a Declaration of Trust, that its principal place of business is Cleveland, Ohio, and that its shares are publicly traded. 2. Admit the allegations of Paragraph 2 of the Complaint. 3. Admit the allegations of Paragraph 3 of the Complaint. 4. Deny each and every allegation of Paragraph 4 of the Complaint. 5. Deny each and every allegation of Paragraph 5 of the Complaint. 6. Deny each and every allegation of Paragraph 6 of the Complaint. 7. Deny each and every allegation of Paragraph 7 of the Complaint. 8. Deny knowledge or information sufficient to form a belief as to the truth of the allegations contained in Paragraph 8 of the Complaint. 9. Deny knowledge or information sufficient to form a belief as to the truth of the allegations contained in Paragraph 9 of the Complaint. 10. Deny each and every allegation of Paragraph 10 of the Complaint, except admit that First Union is governed by, among other things, a Declaration of Trust, which First Union represents is Exhibit A to the Complaint, and respectfully refer the Court to that exhibit for its contents. 11. Deny knowledge or information sufficient to form a belief as to the truth of the allegations contained in Paragraph 11 of the Complaint, and respectfully refer the Court to the Declaration of Trust and the By-Laws for their contents. 12. Deny each and every allegation of Paragraph 12 of the Complaint, except admit that the Gotham Partnerships are owners of shares of First Union. 13. Deny knowledge or information sufficient to form a belief as to the truth of the allegations contained in Paragraph 13 of the Complaint, and respectfully refer the Court to the Declaration of Trust and the By-Laws for their contents. 14. Deny each and every allegation of Paragraph 14 of the Complaint, and respectfully refer the Court to the Declaration of Trust and the By-Laws for their contents. 15. Deny knowledge or information sufficient to form a belief as to the truth of the allegations contained in Paragraph 15 of the Complaint, except admit that the Board of Trustees currently consists of nine trustees. 16. Admit the allegations of Paragraph 16 of the Complaint. 17. Deny each and every allegation of Paragraph 17 of the Complaint, and respectfully refer the Court to the Declaration of Trust for its contents. 18. Deny each and every allegation of Paragraph 18 of the Complaint, except admit that First Union's Annual Meeting for 1998 is scheduled to take place on or about April 14, 1998. 19. Deny each and every allegation of Paragraph 19 of the Complaint, except admit that the Gotham Partnerships began acquiring First Union shares in or about Fall, 1996. 20. Deny each and every allegation of Paragraph 20 of the Complaint. 21. Admit that Gotham delivered a letter on or about January 8, 1998, to First Union's Secretary and General Counsel and respectfully refer the Court to the letter for its contents. 22. Deny each and every allegation of Paragraph 22 of the Complaint, and respectfully refer the Court to the January 8, 1998, letter for its contents. 23. Admit the allegations of Paragraph 23 of the Complaint. 24. Deny each and every allegation of Paragraph 24 of the Complaint. 25. Deny each and every allegation of Paragraph 25 of the Complaint, and respectfully refer the Court to the Declaration of Trust and the By-Laws for their contents. 26. Deny each and every allegation of Paragraph 26 of the Complaint, and respectfully refer the Court to the parties' correspondence for its contents. 27. Deny each and every allegation of Paragraph 27 of the Complaint. 28. Deny each and every allegation of Paragraph 28 of the Complaint. 29. Deny each and every allegation of Paragraph 29 of the Complaint, and respectfully refer the Court to the Declaration of Trust and the By-Laws for their contents. 30. Deny each and every allegation of Paragraph 30 of the Complaint. 31. Deny each and every allegation of Paragraph 31 of the Complaint. 32. Deny each and every allegation of Paragraph 32 of the Complaint, and respectfully refer the Court to Article I, Section 7 of the By-Laws for its contents. 33. Deny each and every allegation of Paragraph 33 of the Complaint. 34. Deny each and every allegation of Paragraph 34 of the Complaint. 35. Deny each and every allegation of Paragraph 35 of the Complaint, and respectfully refer the Court to Article I, Section 7 of the By-Laws for its contents. 36. Deny each and every allegation of Paragraph 36 of the Complaint, except deny knowledge or information sufficient to form a belief as to the truth of the allegations contained in subparts (a) and (c). 37. Deny each and every allegation of Paragraph 37 of the Complaint. 38. Deny each and every allegation of Paragraph 38 of the Complaint, and respectfully refer the Court to the Declaration of Trust for its contents. 39. Deny each and every allegation of Paragraph 39 of the Complaint. 40. Deny each and every allegation of Paragraph 40 of the Complaint. 41. Deny each and every allegation of Paragraph 41 of the Complaint, and respectfully refer the Court to the Declaration of Trust for its contents. 42. Deny each and every allegation of Paragraph 42 of the Complaint. 43. Deny each and every allegation of Paragraph 43 of the Complaint. 44. Deny each and every allegation of Paragraph 44 of the Complaint. 45. Deny each and every allegation of Paragraph 45 of the Complaint. 46. Deny knowledge or information sufficient to form a belief as to the truth of the allegations contained in Paragraph 46 of the Complaint. 47. Deny knowledge or information sufficient to form a belief as to the truth of the allegations contained in Paragraph 47 of the Complaint. 48. Deny knowledge or information sufficient to form a belief as to the truth of the allegations contained in Paragraph 48 of the Complaint. 49. Deny knowledge or information sufficient to form a belief as to the truth of the allegations contained in Paragraph 49 of the Complaint. 50. Deny each and every allegation of Paragraph 50 of the Complaint. 51. Repeat and reallege their responses to Paragraphs 1 through 50 of the Complaint as if fully set forth herein. 52. Deny each and every allegation of Paragraph 52 of the Complaint, except admit that a real and substantial controversy exists between the parties. 53. Deny each and every allegation of Paragraph 53 of the Complaint. 54. Repeat and reallege their responses to Paragraphs 1 through 53 of the Complaint as if fully set forth herein. 55. Deny each and every allegation of Paragraph 55 of the Complaint. 56. Deny each and every allegation of Paragraph 56 of the Complaint. 57. Deny each and every allegation of Paragraph 57 of the Complaint. 58. Deny each and every allegation of Paragraph 58 of the Complaint. As and For a First Affirmative Defense: 59. The Complaint fails to state any claim upon which relief may be granted. As and For a Second Affirmative Defense: 60. Plaintiff's purported claims are barred by the doctrine of laches. As and For a Third Affirmative Defense: 61. Plaintiff's purported claims are barred by waiver and estoppel. As and For a Fourth Affirmative Defense: 62. Plaintiff's purported claims are barred by the doctrine of unclean hands and breaches of fiduciary duty. As and For a Fifth Affirmative Defense: 63. The relief sought by Plaintiff is barred by or conflicts with Ohio and federal law. COUNTERCLAIMS The Gotham Partnerships, as and for their counterclaims against First Union, allege upon knowledge as to themselves and their own acts, and upon information and belief as to all other matters as follows: 64. These counterclaims arise out of First Union's unlawful attempt to strip shareholders of their voting rights and to wrest from Gotham I its right to present a proposal for consideration by all First Union shareholders and to nominate qualified nominees. 65. As more specifically alleged below, First Union's heavy-handed and unlawful actions to squelch shareholder democracy are part of a larger pattern of management's entrenchment tactics and breaches of fiduciary duty. 66. The Gotham Partnerships seek injunctive and declaratory relief that would, inter alia: (a) prohibit First Union from further solicitations unless and until it makes all necessary and proper filings with the SEC as required under Rule 14(a) of the Securities Exchange Act of 1934 and from making material misrepresentations in violation of the proxy rules (and requiring First Union to correct prior misleading statements); (b) enjoin First Union from continuing to interfere with the Gotham Partnerships' rights under the proxy rules and the Declaration of Trust to vote, to nominate qualified nominees and to make proposals; (c) declare that the Gotham Partnerships are in compliance with federal proxy rules and the terms of First Union's Trust and By-Laws; and (d) declare that Gotham I is entitled to receive First Union's records of stockholders to enable it to solicit proxies with respect to its nominations and proposal. Additionally, the Gotham Partnerships seek damages for harm caused to them as a result of First Union's wrongdoing. PARTIES 67. Gotham I and Gotham II are New York limited partnerships whose principal place of business is New York, New York. 68. First Union purports to be an Ohio business trust with its principal place of business in Cleveland, Ohio. First Union qualifies as a real estate investment trust ("REIT") under the Internal Revenue Code of 1986, as amended (the "IRC"). Shares of First Union are traded on the New York Stock Exchange. 69. The Gotham Partnerships own 9.0% of First Union's shares. 70. The Gotham Partnerships are First Union's largest shareholders. JURISDICTION AND VENUE 71. This Court has jurisdiction over the subject matter of these counterclaims pursuant to Section 27 of the Exchange Act, 15 U.S.C. Section 78aa; 28 U.S.C. Section 1331(a); 28 U.S.C. Section 1332(a); and this Court's supplemental jurisdiction, 28 U.S.C. Section 1367. 72. Venue is properly laid in this District pursuant to Section 27 of the Exchange Act, 15 U.S.C. Section 78aa and 28 U.S.C. Section 1391(b). FACTUAL BACKGROUND 73. First Union has done business as a REIT since its creation in 1961. REITs are byproducts of the Real Estate Investment Trust Act of 1960, which amended the IRC to offer special tax treatment to such entities. In essence, a REIT is a trust in which investors pool capital for investment in real estate or in real estate mortgage loans. 74. First Union is one of only a few known REITs in the United States that have what is called a "paired-share" structure. The purpose of the paired-share structure is to allow their shareholders to participate in the economic benefits from the ownership and from the operations of certain real-estate-intensive operating businesses (such as hotels, gaming, golf, healthcare, etc.). Non-paired share REITs are prohibited from investing in operating businesses, and, as a result, their shareholders do not enjoy the economic benefits of operating company ownership. In 1984, Congress added a provision to the IRC barring the further adoption by REITs of this valuable paired-share structure, but grandfathering those paired-share REITs already in existence. 75. In light of its public filings and press releases, until very recently, it appears that management was not aware of its paired-share REIT status and the value of First Union's structure. 76. The Gotham Partnerships first purchased First Union stock in or about Fall, 1996. 77. On July 14, 1997, the Gotham Partnerships sent a letter to First Union's Trustees and the Directors of First Union Management, Inc. indicating concern with First Union's so-called strategic plan. In addition, the Gotham Partnerships questioned management's ability to implement a strategy that would maximize the value of First Union's paired-share structure, given management's limited experience acquiring and managing operating businesses. 78. The Gotham Partnerships' concerns arose primarily from (1) First Union's equity offerings, which were ill-timed, poorly executed and dilutive; (2) the price paid by First Union for various acquisitions; and (3) the fact that First Union's CEO James Mastandrea had told the Gotham Partnerships that he was unwilling to enter into any transaction that would replace existing management with a new investor group and management team with the capital and experience to maximize the value of First Union's structure, regardless of the potential for such a transaction to create shareholder value. 79. In that letter and a follow-up one dated July 23, 1997, the Gotham Partnerships requested a meeting with the Trustees and Directors to discuss their concerns and proposals for maximizing First Union's value. 80. To date, First Union's Trustees have steadfastly refused to meet with representatives from the Gotham Partnerships. A meeting scheduled for December 29, 1997, between representatives of the Gotham Partnerships and First Union's management was canceled by First Union's management. 81. Furthermore, in response to the Gotham Partnerships' July letters, First Union harassed the Gotham Partnerships by sending an unreasonable written request for highly confidential information about the makeup of the Gotham Partnerships. 82. Despite the unreasonableness of the request, the Gotham Partnerships provided additional information responsive to First Union's request. 83. Later, First Union made further unreasonable information requests. 84. Furthermore, the Gotham Partnerships are unaware of any other requests for information by First Union being sent to other entities similar in nature. 85. For several reasons, including management's failure to maximize the value of First Union's unique tax structure, on January 8, 1998, Gotham I set forth a proposal involving, among other things, electing three Gotham I nominees in place of three incumbent trustees, expanding the Board of Trustees by adding six new positions, and electing Gotham I's nominees to the six new positions. 86. In making its proposal and putting forth its nominees, Gotham I fully complied with the requirements contained in First Union's Declaration of Trust and By-Laws. 87. In response to Gotham I's proposal and nominees, First Union launched a concerted campaign to solicit shareholders by issuing press releases attacking the proposal and defending management's entrenchment tactics. 88. Furthermore, on January 16, 1998, First Union notified Gotham I that its proposal and nominees allegedly failed to meet the qualifications and requirements set forth in the Declaration of Trust and the By-Laws, but First Union's letter merely paraphrased the By-Laws without offering specific instances of non-compliance. 89. Through a press release issued that same day by First Union, the Gotham Partnerships learned that First Union had commenced an action in state court against the Gotham Partnerships. 90. Stripped to its essence, First Union's lawsuit seeks to rob shareholders, including the Gotham Partnerships, of their voting rights under the Declaration of Trust by nullifying Gotham I's proposal and nominees, and by attempting to render non-voting all of the Gotham Partnerships' shares. 91. This is not the first time that First Union has resorted to such tactics. 92. In 1995, First Union sued another large shareholder, Richard Osborne, out of fear that Osborne would seek to oust management. 93. After wasting $1.6 million of First Union's money on needless litigation, First Union entered into a "settlement agreement," i.e., greenmail, whereby First Union sold to Osborne or an entity controlled by him two office buildings totaling 400,000 square feet and a 475 space parking garage for $8.8 million; provided seller financing for 80% of the purchase price at 8% interest per annum; and repurchased for over $7 million shares Osborne had accumulated in First Union. This transaction resulted in a loss of $5.6 million to First Union. 94. Furthermore, in an attempt to dilute the stock, First Union has engaged in ill-conceived equity offerings and has repeatedly revised its By-Laws to make it increasingly difficult for shareholders to exercise their rights under the Declaration of Trust. 95. In order to protect First Union shareholders, the investing public, and the Gotham Partnerships, First Union must be enjoined preliminarily and permanently from continuing to interfere with the Gotham Partnerships' right to submit their proposal to First Union shareholders for a vote and to proffer a slate of highly qualified nominees. COUNT I (Violations of Section 14(a) of the '34 Act and the SEC Rules promulgated thereunder) 96. The Gotham Partnerships repeat and reallege the allegations contained in each of the preceding paragraphs as if fully set forth herein. 97. The Proxy Rules, including in particular SEC Rules 14a-3, 14a-6, and 14a-11, require First Union to file proxy solicitation materials in advance of any solicitation, to receive certain required SEC clearances with respect to such materials, and to make certain filings containing detailed disclosures about each participant in First Union's solicitation efforts. 98. First Union has not filed a proxy statement, received the required SEC clearances, or filed any solicitation materials in connection with the solicitation of proxies for First Union shares as required by Section 14(a) of the '34 Act and the Proxy Rules. First Union has solicited more than ten persons in the course of their solicitation of proxies. 99. First Union has engaged in and is continuing to engage in the active solicitation of proxies for First Union shares in violation of Section 14(a) of the '34 Act and the Proxy Rules. 100. First Union's public statements following Gotham I's notice of nominations and proposal were materially misleading and omissive in violation of Section 14(a) of the '34 Act and the Proxy Rules. 101. First Union's unlawful solicitations have caused and will continue to cause immediate and irreparable harm to Gotham and First Union's shareholders, for which Gotham has no adequate remedy at law. COUNT II (Interference with security holder rights to present nominations and proposals, in violation of Section 14(a) of the '34 Act and the SEC Rules promulgated thereunder). 102. Gotham I repeats and realleges the allegations contained in each of the preceding paragraphs as if fully set forth herein. 103. The Proxy Rules are designed to permit public securityholders to vote on properly noticed shareholder nominations and proposals at duly noticed meetings of stockholders. 104. First Union has initiated litigation and is taking other action through which it seeks nullification of Gotham I's shareholder nominations and proposal on grounds antithetical to the purposes of the Proxy Rules. 105. First Union's efforts to prevent Gotham I from submitting for a stockholder vote its duly noticed nominations and proposal are causing and will continue to cause immediate and irreparable harm to Gotham I and First Union's other shareholders, for which Gotham I has no adequate remedy at law. COUNT III (Interference with Suffrage Right of Shareholder in violation of Section 14(a) of the '34 Act and the SEC Rules promulgated thereunder) 106. The Gotham Partnerships repeat and reallege the allegations contained in each of the preceding paragraphs as if fully set forth herein. 107. Section 14(a) of the '34 Act prohibits First Union from impermissibly burdening the absolute right of shareholders to vote their shares. 108. First Union has initiated litigation and engaged in other tactics through which it seeks to strip the Gotham Partnerships' shares of their voting rights, and to prohibit them from being considered "for quorum or voting purposes." 109. Such effort by First Union to deny the Gotham Partnerships their lawful voting rights as shareholders violates Sections 14(a) of the '34 Act. 110. First Union's effort to deny the Gotham Partnerships suffrage has caused and will continue to cause immediate and irreparable harm to the Gotham Partnerships and First Union shareholders, for which the Gotham Partnerships have no adequate remedy at law. COUNT IV (Violation of Declaration of Trust) 111. The Gotham Partnerships repeat and reallege the allegations contained in each of the preceding paragraphs as if fully set forth herein. 112. Section 7.5 of the Declaration of Trust provides that First Union Beneficiaries of record shall be entitled to vote at any meeting of the Beneficiaries. 113. First Union has initiated litigation and engaged in other tactics through which it seeks to strip the Gotham Partnerships' shares of their voting rights, and to prohibit them from being considered "for quorum or voting purposes." 114. Such effort by First Union to deny the Gotham Partnerships their voting rights as shareholders violates the Declaration of Trust. 115. First Union's effort to deny the Gotham Partnerships suffrage has caused and will continue to cause immediate and irreparable harm to the Gotham Partnerships and First Union shareholders, for which the Gotham Partnerships have no adequate remedy at law. COUNT V (For Breach of Fiduciary Duty Directly Affecting the Gotham Partnerships' Individual Rights as Beneficiaries and Stockholders) 116. The Gotham Partnerships repeat and reallege the allegations contained in each of the preceding paragraphs as if fully set forth herein. 117. First Union's management and Trustees have a fiduciary obligation to preserve its assets and to act prudently in taking action on First Union's behalf. 118. First Union has violated this duty by wasting assets and seeking to entrench the position of First Union's current officers and management in the following respects, among others: a) attacking Gotham I's nominations and proposal through unlawful proxy solicitations and through a baseless notice of deficiency in response to Gotham I' nominations and proposal; b) authorizing litigation against the Gotham Partnerships aimed at prohibiting a shareholder vote on Gotham I's proposal at the upcoming annual meeting; c) pursuing ill-timed, poorly executed and dilutive equity offerings; d) paying an excessive amount for Imperial Parking Company; e) refusing to enter into any transaction -- despite the potential for such a transaction to maximize the company's value -- which would replace existing management with a new investor group and management team with the capital and experience to maximize the value of the Company's structure; f) authorizing the Osborne lawsuit on the basis of trumped-up charges; g) spending at least $1.6 million of the shareholders' money in pursuing the claim and proxy fight against Osborne; and h) entering into a "settlement agreement," i.e., greenmail, whereby First Union repurchased for over $7 million 950,000 shares held by Osborne and sold to Osborne or an entity controlled by him two office buildings totaling 400,000 square feet and a 475 space parking garage for $8.8 million, resulting in a loss of $5.6 million to First Union; and provided seller financing for 80% of the purchase price at 8% interest per annum. 119. As a proximate result of this gross malfeasance and entrenchment, First Union's assets have been wasted and First Union management and Trustees are violating the Gotham Partnerships' rights as Beneficiaries, causing immediate and irreparable harm for which they have no adequate remedy at law. COUNT VI (Declaratory Judgment) 120. The Gotham Partnerships repeat and reallege the allegations contained in each of the preceding paragraphs as if fully set forth herein. 121. A real and substantial controversy exists between the Gotham Partnerships and First Union concerning the right of the Gotham Partnerships to make nominations and proposals at the Annual Meeting and to vote as Beneficiaries of the Declaration of Trust. 122. The Gotham Partnerships are entitled to a declaration of this Court that the Gotham Partnerships have complied with First Union's informational requests and Declaration of Trust and By-Law requirements to the extent they are valid and enforceable; that Gotham I is entitled to make its nominations and proposal at the Annual Meeting; and that the Gotham Partnerships are entitled to vote thereon. 123. Alternatively, the Gotham Partnerships are entitled to a declaration of this Court that First Union is required to inform Gotham I sufficiently in advance of the Annual Meeting of any requirements that Gotham I must fulfill to make its nominations and proposal, so that it has adequate time to comply and that First Union's stockholders have adequate time to consider and vote upon Gotham I's nominations and proposal. 124. In addition, the Gotham Partnerships are entitled to a declaration of this Court that certain requirements of the Declaration of Trust and By-Laws are invalid on their face or as applied under Ohio and federal law and that certain other requirements of the By-Laws are in conflict with the Declaration of Trust. 125. The Gotham Partnerships are also entitled to a declaration of this Court that First Union's attempt to apply Declaration of Trust and By-Law requirements in an unreasonable way, in derogation of the Gotham Partnerships' federal rights under the proxy rules, and in violation of First Union's fiduciary obligations is invalid and of no force or effect. WHEREFORE, the Gotham Partnerships respectfully request that this Court enter an order: (a) preliminarily and permanently enjoining First Union, its directors, Trustees, officers, employees, agents, affiliates, partners, participants and all other persons acting in concert with them, directly or indirectly, from any solicitation of First Union shareholders within the meaning of SEC Rule 14a-1(i) with respect to First Union until First Union has made the proper, complete and requisite filings required by Section 14(a) of the Securities Exchange Act of 1934, 15 U.S.C. Section 78na and the SEC Rules promulgated thereunder, received all SEC clearances with respect to such filings, and for ten days thereafter; (b) ordering that First Union make appropriate disclosures to correct all of the false and misleading statements it has heretofore made in its unlawful proxy solicitations, and that thereafter First Union be prohibited from soliciting any proxies for First Union shares for an appropriate period to allow full dissemination of these disclosures to First Union shareholders; (c) preliminarily and permanently enjoining First Union from making future false and misleading statements in the course of soliciting proxies for First Union shares; (d) enjoining First Union, its directors, officers, Trustees, successors, agents, servants, subsidiaries, employees and attorneys, and all persons acting in concert or participating with them, from taking any steps to impede or frustrate the ability of First Union's stockholders to consider and make their own determination on Gotham I's nominations and proposal or taking any other action to thwart or interfere with the proxy contest, including withholding its records of stockholders; (e) enjoining First Union, its directors, officers, successors, Trustees, agents, servants, subsidiaries, employees and attorneys, and all persons acting in concert or participating with them, from taking any actions that would dilute or interfere with the Gotham Partnerships' voting, nomination, and proposal rights or in any other way discriminate against the Gotham Partnerships in the exercise of its rights with respect to its First Union shares; (f) declaring and adjudging: (i) that the Gotham Partnerships have complied with First Union's informational requests and Declaration of Trust and By-Law requirements; that Gotham I is entitled to make its nominations and proposal at the Annual Meeting; and that the Gotham Partnerships are entitled to vote thereon; (ii) alternatively declaring and adjudging that First Union is required to inform, and enjoining First Union to inform, Gotham I sufficiently in advance of the Annual Meeting of the requirements that Gotham I must fulfill to make its nominations and proposal, so that it has adequate time to comply and that First Union's stockholders have adequate time to consider and vote upon Gotham I's nominations and proposal; or (iii) declaring and adjudging that any unmet requirements of the Declaration of Trust and By-Laws are invalid on their face or as applied under Ohio and federal law; (g) declaring and adjudging that First Union's attempt to apply Declaration of Trust and By-Law requirements in an unreasonable way, in derogation of the Gotham Partnerships' federal rights under the proxy rules, and in violation of First Union's fiduciary obligations, is invalid and of no force or effect. (h) declaring and adjudging that Gotham I's nominations and proposal may be presented at the Annual Meeting for a vote; (i) dismissing the Complaint; (j) awarding judgment in favor of the Gotham Partnerships on the counterclaims; (k) awarding the Gotham Partnerships their costs and disbursements in this action, including reasonable attorneys' fees; and (l) granting such other and further relief as to the Court deems just and proper. Dated: January 23, 1998 Cleveland, Ohio OF COUNSEL: /s/ David C. Weiner ------------------------------ HAHN LOESER & PARKS LLP David C. Weiner (0013351) Michael J. Garvin (0025394) 3300 BP America Building 200 Public Square Cleveland, Ohio 44114-2301 (216) 621-0150 - and - OF COUNSEL: /s/ Alexander R. Sussman FRIED, FRANK, HARRIS, SHRIVER ------------------------------ & JACOBSON Alexander R. Sussman(FN1) 25th Floor One New York Plaza New York, New York 10004-1980 (212) 859-8000 Attorneys for Defendants and Counterclaimants - -------- [FN] 1 Application to appear pro hac vice being submitted CERTIFICATE OF SERVICE A copy of the foregoing Amended Answer and Counterclaims was sent by United States Mail (First Class) with a courtesy copy by Fax to Frances Floriano Goins, Squire, Sanders & Dempsey L.L.P., 4900 Key Tower, 127 Public Square, Cleveland, Ohio 44114-1304, attorneys for Plaintiff, this 23rd day of January, 1998. /s/ Stephen Jay Obie ----------------------------------- One of the attorneys for Defendants and Counterclaimants -----END PRIVACY-ENHANCED MESSAGE-----