Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
):
FEDERAL DEPOSIT INSURANCE ):
CORPORATION, in its capacity as receiver for ):
First State Bank, ):
):
Plaintiff, ):
):
v. ):
): Civ. A. No. 2:12-cv-01951-FSH-MAH
FRIERI CONROY & LOMBARDO, LLC ):
and ::
DONNA M. CONROY, ESQ., ::
:: JOINT DISCOVERY PLAN
::
Defendants/Third-Party Plaintiffs, ):
):
v. ):
):
MARK L. BREITMAN, ESQ., et al. ):
:
Third-Party Defendants. ):
1. For each party, set forth the name of the party, attorney appearing, the firm name,
address, email address, telephone number and facsimile number.
(b) Defendants, Frieri Conroy & Lombardo, LLC and Donna M. Conroy, Esquire
Patrick J. Galligan
Graham Curtin
4 Headquarters Plaza
Case 2:12-cv-01951-FSH-JBC Document 8 Filed 07/25/12 Page 2 of 9 PageID: 660
Morristown, NJ 07962
Tel: (973) 292-1700
Fax: (973) 292-1767
pgalligan@grahamcurtin.com
Keith McKenna
McKenna Law Firm LLC
96 Park Street
Montclair, NJ 07043
Tel: 973.509.0050
Fax: 973.509.3580
keith.mckenna@mcklaw.net
David C. Stanziale
552 High Mountain Road
North Haledon, NJ 07508
Tel: (973)955-0470
Fax: (973)955-0473
stanzialelaw@aol.com
32 Reading Road
Flemington, NJ 08822
2 Fieldstone Court
Eatontown, NJ 07724
6 Lafayette Drive
Cedar Grove, NJ 07009
-2-
Case 2:12-cv-01951-FSH-JBC Document 8 Filed 07/25/12 Page 3 of 9 PageID: 661
2 Martin Place
Cranford, NJ 07016
2. (a) Set forth a brief description of the case, including the facts, causes of action and
affirmative defenses asserted.
A. Plaintiffs Position
FDIC-Rs claims arise out of acts and omissions committed by Defendants, Frieri
Conroy & Lombardo, LLC (Frieri LLC) and Donna M. Conroy (Conroy), (collectively, with
Frieri LLC Defendants), in connection with their representation of the Bank. Specifically,
Defendants represented the Bank in a series of related, round trip transactions that resulted in
significant losses to the Bank.
On September 30, 2009, just a few weeks after it wired $12 million to Gasparro,
the Bank issued shares of stock to three entities identified as PG Capital Investments, LLC (PG
Capital), Ultravest Capital Corporation (Ultravest), and Silcap Partners, LLC (Silcap). The
Bank issued the stock as part of a purported capital infusion in which it was to receive $7 million
from PG Capital, Ultravest, and Silcap in return for the stock. All three of these entities,
however, were interrelated and subject to control by Gasparro. Moreover, the $7 million capital
infusion these entities provided was drawn from the $12 million the Bank had provided to
Gasparro earlier in the month.
-3-
Case 2:12-cv-01951-FSH-JBC Document 8 Filed 07/25/12 Page 4 of 9 PageID: 662
Following the issuance of the Banks stock, the Banks auditors discovered during
a routine audit for the fiscal year 2009 that the $12 million the Bank entrusted to Gasparro was
not being held in a separate account, as the Investment Advisory Agreement required. As a
result, the Bank requested the return of the funds from Gasparro. Gasparro initially did not
comply with these demands, but he eventually returned the Banks $12 million on June 1, 2010.
Before Gasparro returned the funds, however, the Bank extended three separate
lines of credit in May 2010 to PG Capital, Ultravest, and Silcap. These lines of credit, which
totaled $9.3 million, were used to fund Gasparros return of the $12 million that the Bank
originally provided to him in September 2009. The loans were purportedly secured by complex
financial insurance agreements. The financial insurance agreements, however, were a complete
fiction and wholly unenforceable.
Defendants served as legal counsel to the Bank in connection with the issuance of
its stock and the extension of the lines of credit to PG Capital, Ultravest, and Silcap. In their
capacity as counsel for the Bank, Defendants failed to discharge their professional obligations in
a number of material respects. Among other things, Defendants either knew or should have
known that PG Capital, Ultravest and Silcap were all interrelated and subject to Gasparros
control. Defendants also knew or should have known that the $7 million used to purchase the
Banks stock came from the $12 million that the Bank wired to Gasparro just a few weeks earlier
and that the $9.3 million that Bank extended under the lines of credit was used to return the $12
million the Bank initially provided to Gasparro. Defendants further knew or should have known
that the financial insurance agreements that purportedly collateralized the lines of credit were
unenforceable and that the underwriting on the lines of credit was completely inadequate.
Defendants, Frieri Conroy & Lombardo, LLC and Donna M. Conroy, Esq.
(hereinafter the "Frieri Conroy Defendants") dispute Plaintiff's position and further note that said
allegations have not been proven. Plaintiff's allegations against the Frieri Conroy Defendants
stem from two transactions for which the Frieri Conroy Defendants served as outside counsel to
Plaintiff: (1) a $7,000,000 capital raise, and (2) three underlying loans made by the Plaintiff to
certain investment entities: Ultravest Capital Corp., SilCap Partners, LLC, and PG Capital
Investments, LLC. With respect to Plaintiff's allegations regarding the capital raise, Plaintiff was
fully informed as to the identity of the entities. Plaintiff was to conduct its own due diligence
and Plaintiff's Board of Directors ultimately approved the capital raise. Similarly, it is
undisputed that Plaintiff approved the loans to Ultravest Capital Corp., SilCap Partners, LLC,
and PG Capital Investments, LLC and that Plaintiff was conducting the due diligence with
respect to the loans and the insurance agreements that were to collateralize the loans. The Frieri
-4-
Case 2:12-cv-01951-FSH-JBC Document 8 Filed 07/25/12 Page 5 of 9 PageID: 663
Conroy Defendants were not responsible for these tasks and therefore cannot be liable for any
damages resulting from Plaintiff's actions.
Further, the Frieri Conroy Defendants have filed a Third-Party Complaint for
indemnification and contribution against members of First State Bank's Board of Directors, Mark
L. Breitman, Esq., Franceso D'Angelo, Robert P. Keller, Theodore M. Kest, Michael J.
Maggiano, Esq., Joseph D. Natale, Thomas Ragukonis and Samuel Ventola, as well as Scott
Beresford, First State's Executive Vice President and Senior Lending Officer. Specifically, the
Frieri Conroy Defendants allege in the Third Party Complaint that, though they deny any and all
allegations of professional malpractice, to the extent that First State Bank establishes that it has
been damaged as a result of conduct alleged in the Complaint, that First State Bank's officers and
directors were negligent in the discharging of their respective duties of care, loyalty and
obedience and that those breaches proximately caused any such damage.
(b) Is this a fee-shifting case?
__________________________________________________________________
-5-
Case 2:12-cv-01951-FSH-JBC Document 8 Filed 07/25/12 Page 6 of 9 PageID: 664
6. FDIC-R and Defendants have exchanged the information required by Fed. R. Civ.
P. 26(a)(1). If not, state the reason therefor. Initial Disclosures have not been
produced by the Additional Defendants.
8. The parties have not conducted discovery other than the above disclosures. If so,
describe.
Not applicable.
(b) If so, state the date of the meeting and the persons in attendance.
Counsel for FDIC-R conferred with counsel for Defendants on June 21, 2012, and
reached an agreement regarding the schedule proposed in this plan. Counsel for
FDIC-R thereafter conferred with counsel for the other represented parties in this
case, who agreed to the schedule outlined in this joint discovery plan.
This plan is joint among all of the parties who are represented by counsel. The
pro se parties are not parties to this plan. The pro se parties were advised in
writing of the Courts Order of May 22, 2012, scheduling the pre-trial conference
and were provided with a copy of that Order.
-6-
Case 2:12-cv-01951-FSH-JBC Document 8 Filed 07/25/12 Page 7 of 9 PageID: 665
(g) Plaintiffs expert report (if needed) due on April 29, 2013
(h) Defendants expert report (if needed) due on May 29, 2013
(i) Expert depositions to be completed by July 30, 2013. (if there is a need for a
liability expert and it is necessary to defer completion of expert discovery beyond
this deadline, set forth the reason).
(k) Set forth any special discovery mechanism or procedure requested, including
data preservation orders or discovery confidentiality orders: The parties will seek
a confidentiality order to protect the information that will be exchanged between
them in this matter.
(l) The settlement pretrial conference may take place on September 30, 2013
(m) The final conference may take place on October 30, 2013
If so, explain.
__________________________________________________________________
-7-
Case 2:12-cv-01951-FSH-JBC Document 8 Filed 07/25/12 Page 8 of 9 PageID: 666
If so, explain.
13. State whether this case is appropriate for voluntary arbitration (pursuant to
L.Civ.R. 201.1 or otherwise), mediation (pursuant to L.Civ.R. 301.1 or
otherwise). If not, explain why and state whether any such procedure may be
appropriate at a later time (i.e., after exchange of pretrial disclosures, after
completion of depositions, after disposition of dispositive motions, etc.).
Given the complexity of the factual and legal issues involved, the parties do not
believe that this case is appropriate for arbitration. This case may be appropriate
for mediation.
Respectfully submitted:
s/William T. Mandia
John J. Murphy, III
William T. Mandia
Stradley Ronon Stevens & Young, LLP
A Pennsylvania Limited Liability Partnership
LibertyView
457 Haddonfield Road, Suite 100
Cherry Hill, NJ 08002
-8-
Case 2:12-cv-01951-FSH-JBC Document 8 Filed 07/25/12 Page 9 of 9 PageID: 667
s/ Patrick J. Galligan
Patrick J. Galligan
Graham Curtin
4 Headquarters Plaza
Morristown, NJ 07962
s/Keith McKenna
Keith McKenna
McKenna Law Firm LLC
96 Park Street
Montclair, NJ 07043
s/David C. Stanziale
David C. Stanziale
552 High Mountain Road
North Haledon, NJ 07508
-9-
# 1584428