Motion For Leave To File Brief in Excess With Exhibits PDF

IN THE CIRCUIT COURT OF THE
NINETEENTH JUDICIAL CIRCUIT

LAKE COUNTY, ILLINOIS
JOSEPH S. SILVER, et al.,
Plaintiffs, No. 17 CH 729
v.
LOUIS SILVER, et al.
Defendants,
and
LOGAN SQUARE ALUMINUM SUPPLY,

INC., et al.,
Nominal Defendants.
LOUIS SILVER’S MOTION FOR LEAVE TO FILE INSTANTER

A BRIEF IN SUPPORT OF HIS SECTION 2-619.1 MOTION
TO DISMISS THAT EXCEEDS FIFTEEN PAGES
Pursuant to Local Rule 2-1.02(B), Defendant Louis Silver moves the Court for leave to
file, instanter, a brief in support of his motion to dismiss pursuant to 735 ILCS 5/2-619.1 that
exceeds fifteen pages. In support of the motion, Louis states:
1. On May 19, 2017, Nathan Silver filed a Verified Complaint for Injunctive and
Other Relief (the “Complaint”). The Complaint asserted six causes of action against Louis Silver
(Nathan’s brother) and other defendants who have since been voluntarily dismissed. Nathan
asserted “direct” claims, as well as “derivative” claims on behalf of Logan Square Aluminum
Supply, Inc. and Silver Real Estate Management and Development Corporation.
2. Count III of the Complaint was voluntarily dismissed, and the remaining five
counts (Counts I, II, IV, V, and VI) are pending.

3. On January 2, 2018, Nathan died. Two of his adult children, Joseph Silver and
Michelle Silver, were substituted as plaintiffs in the case in their capacities as the co-executors of
Nathan’s estate. On November 16, 2018, with leave of Court, Nathan’s adult children, Joseph
Silver, Michelle Silver, and Rochelle Silver, filed a Verified Amendment Adding Parties and
Counts VII Through XI to the Verified Complaint for Injunctive and Other Relief (the “First
Amendment”). The First Amendment asserted five claims against Louis—bringing the total
number of claims against Louis to ten. As before, the claims against Louis included both “direct”
claims, this time on behalf of Joseph, Michelle, and Rochelle, as well as “derivative” claims on
behalf of Logan Square Aluminum Supply, Inc., Silver Real Estate Management and
Development Corporation, and other entities owned by various members of the Silver family.
4. On December 17, 2018, Louis filed a section 2-615 motion to dismiss and also
sought leave to file an oversized brief in support of that motion. Without objection from
Plaintiffs, the Court granted Louis’ motion for excess pages and Louis filed a seventeen page
brief.
5. Louis’ motion to dismiss the First Amendment challenged the five remaining
claims in the Complaint and the five claims asserted in the First Amendment.
6. In lieu of responding to Louis’ motion, Joseph and Michelle sought leave to file
another amended complaint. With leave of Court and pursuant to agreement of the parties,
Joseph and Michelle subsequently filed a Second Verified Amendment Adding Parties and
Counts VII Through XI to the Verified Complaint for Injunctive and Other Relief (the “Second
Amendment”) on behalf of themselves, individually, and as co-executors of Nathan’s estate and
co-trustees of the Nathan J. Silver Trust. The Second Amendment removed Rochelle as a
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plaintiff, but asserted the same five “direct” and “derivative” claims against Louis as the First
Amendment.
7. The Second Amendment asserts for the first time that the “Nathan J. Silver
Trust,” and not Nathan, Joseph, Michelle, or Rochelle, was the shareholder of record for Logan
Square Aluminum Supply, Inc., Silver Real Estate Management and Development Corporation,
and other Silver family entities at all times relevant to this lawsuit.
8. This central allegation of the Second Amendment, along with allegations (or lack
thereof) on other topics, such as the requirement that a “demand” be made on the respective
boards of directors of the family-owned entities involved in this lawsuit give rise to new legal
arguments, including: (i) violation of the statute of limitations and (ii) lack of standing.
9. In addition, the capacities in which Joseph and Michelle are now attempting to
assert claims—simultaneously in their individual capacities, as co-executors of Nathan’s estate,
and as co-trustees of the Nathan J. Silver Trust, give rise to new arguments.
10. Louis intends to raise all of these new arguments, as well as those he previously
raised in his prior motion to dismiss, in a section 2-619.1 motion to dismiss. As before, Louis’
motion directed at the Second Amendment challenges all five of the claims remaining from the
Complaint and all five of the claims added to the lawsuit in the Second Amendment.
11. Louis has undertaken good-faith efforts to condense his brief in support of his
motion to dismiss as best as he can, but given the number of claims (ten), the number of
plaintiffs (two, asserting claims in multiple capacities), and the alleged change in identity of the
relevant shareholder (now the Nathan J. Silver Trust), he requires seven additional pages
(twenty-two total) to present all of the bases for his motion. Louis believes that these additional
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pages are necessary, and indeed critical, to his ability to demonstrate the Second Amendment’s
many flaws for the Court, so that the Court can appropriately resolve Louis’ motion to dismiss.
12. The brief for which Louis seeks leave of Court to file, instanter, is attached as
Exhibit 1. Six exhibits (A through G) are attached to the brief.
13. This motion is brought in good faith and not for purposes of delay. Louis believes
that permitting him to file seven additional pages of briefing will materially assist the Court in
adjudicating the parties’ claims and streamlining the contested issues in this lawsuit.
14. Louis has no objection to providing Plaintiffs a reciprocal number of additional
pages for any response to his section 2-619.1 motion, should it be necessary.
15. Prior to filing this motion, Louis’ attorneys communicated with Plaintiffs’ counsel
regarding the request for additional pages and asked whether they objected to this motion. As of
the time of filing, Plaintiffs’ counsel had not responded.
WHEREFORE, Louis respectfully requests that the Court grant this motion, grant him
leave to file, instanter, the brief in support of his section 2-619.1 motion to dismiss attached to
this motion as Exhibit 1, and grant him such other and further relief as the Court deems
appropriate.
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Dated: March 22, 2019 Respectfully submitted,
LOUIS SILVER
By: /s/ Richard T. Kienzler

One of his attorneys
Fred Foreman (ARDC # 0846902)

Michael D. Freeborn (ARDC # 0868795)
Michael P. Kornak (ARDC # 6237471)
Richard T. Kienzler (ARDC # 6296926)
Freeborn & Peters LLP
311 South Wacker Drive, Suite 3000
Chicago, Illinois 60606
Phone: (312) 360-6000
Fax: (312) 360-6520
Email: fforeman@freeborn.com
mfreeborn@freeborn.com
mkornak@freeborn.com
rkienzler@freeborn.com
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CERTIFICATE OF SERVICE
The undersigned attorney certifies that on the date below he caused copies of the
foregoing Louis Silver’s Motion For Leave To File Instanter A Brief In Support Of His
Section 2-615 Motion To Dismiss That Exceeds Fifteen Pages to be served upon the following
attorneys via email:
Laurie E. Leader
Chicago-Kent Law Offices
565 West Adams Street, Suite 600
lleader@kentlaw.iit.edu
Jerald A. Kessler
14047 Petronella Drive, Suite 202B
Libertyville, Illinois 60048
jakessler@igc.org
Michael Lee Tinaglia

Law Offices of Michael Lee Tinaglia
444 North Northwest Highway, Suite 350
Park Ridge, Illinois 60068
mltinaglia@tinaglialaw.com
Gregory J. Scandaglia
Scandaglia Ryan LLP
55 East Monroe Street, Suite 3440
gscandaglia@scandagliaryan.com
Dated: March 22, 2019 /s/ Richard T. Kienzler
Richard T. Kienzler
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EXHIBIT 1
IN THE CIRCUIT COURT OF THE
NINETEENTH JUDICIAL CIRCUIT
JOSEPH S. SILVER, et al.,
Plaintiffs,
v. No. 17 CH 729
LOUIS SILVER, et al.
Defendants,
and
LOGAN SQUARE ALUMINUM SUPPLY,

INC., et al.,
Nominal Defendants.
LOUIS SILVER’S MEMORANDUM OF LAW IN

SUPPORT OF HIS SECTION 2-619.1 MOTION TO DISMISS

Phone: (312) 360-6000
Fax: (312) 360-6520
Dated: March 22, 2019 Counsel for Louis Silver

TABLE OF CONTENTS
INTRODUCTION .............................................................................................................................1
RELEVANT PROCEDURAL HISTORY AND FACTUAL ALLEGATIONS..........................1
I. Nathan Silver Initiated This Lawsuit With A Six-Count Complaint .....................................1
II. Nathan Alleged That It Would Have Been Futile For Him To Demand That Logan
Square Aluminum And Silver Real Estate Pursue Litigation Against Louis ........................3
III. The Co-Executors Of Nathan’s Estate Substituted In As Plaintiffs Following Nathan’s

Death. .....................................................................................................................................3
IV. The Composition Of The Relevant Boards Of Directors Changed In May 2018. .................3
V. Nathan’s Adult Children “Acquired” Nathan’s Shares In Family-Owned Companies And

Amended The Complaint To Assert Their Own Individual And Derivative Claims. ...........4
VI. After Louis Moved To Dismiss The Lawsuit, Joseph And Michelle Filed A Second
Amendment. ...........................................................................................................................5
LEGAL STANDARD .......................................................................................................................6
ARGUMENT .....................................................................................................................................7
I. All Of Nathan’s Derivative Claims Fail As A Matter Of Law. .............................................7
A. Count I fails for two independent reasons: (i) no standalone claim for
“Shareholders’ Derivative Action” exists, and (ii) Nathan does not own
shares in Logan Square Aluminum or Silver Real Estate, a prerequisite to
any derivative claim. ..................................................................................................7
B. Counts II and IV fail, to the extent they assert derivative claims or otherwise
seek to recover for injury to Logan Square Aluminum or Silver Real Estate,
again because Nathan does not own shares in those companies. ...............................10
II. The Second Amendment Abandoned Or Withdrew Any “Direct” Claim By Nathan In
Count IV, And Counts V And VI In Their Entirety. .............................................................11
III. All Derivative Claims Asserted In Counts VII, VIII, And IX By Joseph And Michelle,
Whether Individually, As Co-Executors Of Nathan’s Estate, Or As Co-Trustees Of The
Trust, Are Legally Deficient. .................................................................................................12
A. Count VII of the Second Amendment fails because, among other deficiencies,
there is no standalone claim for “Shareholders’ Derivative Action” and neither
Nathan’s estate nor the Trust own shares in the companies at issue. ........................13
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B. The derivative claims in Counts VIII and IX of the Second Amendment are
also legally deficient because, among other things, Nathan’s estate does not
own shares in the companies at issue, and Joseph and Michelle did not own
them at the time of the challenged conduct. ..............................................................14
C. Putting aside all of the other fatal deficiencies, Joseph and Michelle cannot
assert derivative claims in any capacity because they failed to make the
necessary demand on Logan Square Aluminum’s and Silver Real Estate’s
respective boards of directors, or the board of any other Family-Owned
Company. ...................................................................................................................16
IV. Count X Should Be Dismissed Because Joseph and Michelle Have Not Established—
And Cannot Establish—That They Are Entitled To An Equitable Accounting. ...................19
V. Count XI’s Claim For “Injunction” Is Another Legal Nullity. ..............................................20
VI. Any Claim By The Trust, Whether Derivative Or Direct, Seeking To Recover Based On
Conduct Occurring More Than Five Years Ago Is Time Barred. .........................................20
VII. The Complaint And Second Amendment Also Violate Illinois Pleading Rules. ..................21
CONCLUSION ..................................................................................................................................22
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TABLE OF AUTHORITIES
CASES PAGE(S)
American National Bank & Trust Co. of Chicago v. Erickson,

115 Ill. App. 3d 1026, 452 N.E.2d 3 (1st Dist. 1983) ................................................................9
Bohomme v. St. James,

2012 IL 112393 ........................................................................................................................12
Braddock v. Zimmerman,
906 A.2d 776 (Del. 2006) ........................................................................................................19
Cable America, Inc. v. Pace Electronics, Inc.,

396 Ill. App. 3d 15 (1st Dist. 2009) .........................................................................................21
Ching v. Porada,
560 F. Supp. 2d 675 (N.D. Ill. 2008) .......................................................................................10
CitiMortgage, Inc. v. Parille,

2016 IL App (2d) 150286 ........................................................................................................21
Coughlin v. SeRine,
154 Ill. App. 3d 510 (1st Dist. 1987) .......................................................................................20
Davis v. Dyson,
387 Ill. App. 3d 676 (1st Dist. 2008) .................................................................................11, 14
Diotallevi v. Diotallevi,
2013 IL App (2d) 111297 ..........................................................................................................6
Fuller Family Holdings, LLC v. Northern Trust Co.

311 Ill. App. 3d 605 (1st Dist. 2007) .......................................................................................20
Hatchett v. W2X Inc.,

2013 Il App (1st) 121758 ...........................................................................................................9
In re Abbott Laboratories Derivative Shareholders Litigation,

325 F.3d 795 (7th Cir. 2003) .......................................................................................16, 17, 19
Konstant Products, Inc. v. Liberty Mut. Fire Ins. Co.,

401 Ill. App. 3d 83, 929 N.E.2d 1200 (2010) ............................................................................9
Lower v. Lanark Mut. Fire Ins. Co.,

151 Ill. App. 3d 471 (2d Dist. 1986) ....................................................................................8, 11
Sherman v. Ryan,
392 Ill. App. 3d 712 (1st Dist. 2009) ...........................................................................17, 18, 19
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Silver v. Allard,
16 F. Supp. 2d 966 (N.D. Ill. 1998) .........................................................................................18
Small v. Sussman,
306 Ill. App. 3d 639 (1st Dist. 1999) ............................................................................... passim
Spillyards v. Abboud,
278 Ill. App. 3d 663 (1st Dist. 1996) .................................................................................17, 18
Tarin v. Pellonari,
253 Ill. App. 3d 542 (1st Dist. 1993) .................................................................................19, 20
Town of Cicero v. Metropolitan Water Reclamation Dist. Of Greater Chicago,

2012 IL App (1st) 112164........................................................................................................20
Weil v. Northwest Industries, Inc.,

168 Ill. App. 3d 1 (1st Dist. 1988) .................................................................................8, 11, 14
STATUTES
735 ILCS 5/13-205 ........................................................................................................................20
735 ILCS 5/2-603 ..........................................................................................................................21
735 ILCS 5/2-604 ..........................................................................................................................12
805 ILCS 5/7.80 ..................................................................................................................... passim
805 ILCS 5/7.80(b) ..................................................................................................................16, 17
805 ILCS 180/40-1 ..................................................................................................................16, 17
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INTRODUCTION
Plaintiffs have now filed three complaints—the original verified complaint, a verified
first “amendment,” and a verified second “amendment”—and still they cannot plead valid
claims. Indeed, the latest iteration does not even bother to address all of the fatal legal
deficiencies Defendant Louis Silver identified in his prior motion to dismiss, which caused
Plaintiffs to seek leave to file their second amendment in lieu of responding to Louis’ motion.
Plaintiffs have been afforded every opportunity to attempt to state a claim. They have not,
and cannot, do so. The time has come to dismiss with prejudice the five claims remaining from
the original complaint and all five asserted in the second “amendment.”
RELEVANT PROCEDURAL HISTORY AND FACTUAL ALLEGATIONS
Given that Louis’ motion focuses on discrete issues of law, the following procedural
history and description of the lawsuit’s allegations is limited to those points necessary to
resolution of his motion.
I. Nathan Silver Initiated This Lawsuit With A Six-Count Complaint.
Nathan Silver initiated this lawsuit in May 2017 by filing a six-count Verified Complaint
for Injunctive and Other Relief (“Complaint”). (Compl., Ex. A.) The Complaint asserted the
following claims against his brother, Louis Silver 1: (i) a derivative claim titled “Shareholders’
Derivative Action” (Count I); (ii) derivative and individual claims for breach of fiduciary duty
(Count II); (iii) derivative and individual claims for unjust enrichment (Count IV); (iv) a claim
for accounting (Count V); and (vi) a claim for “Injunction” (Count VI).
Nathan asserted the derivative claims on behalf of two companies owned by the various
members of the Silver family: Logan Square Aluminum Supply, Inc. (“Logan Square
1
The Complaint also asserted claims against Robert Knabe and Sanford Bokor, but Nathan subsequently dismissed
without prejudice all counts against those defendants. (10/12/17 Order, Ex. B.)
Aluminum”) and Silver Real Estate Management and Development Corporation (“Silver Real
Estate”). In the Complaint, Nathan swore under oath that at the time he filed suit and all relevant
times prior, both he and Louis were shareholders in Logan Square Aluminum and Silver Real
Estate. 2 (Id. ¶¶ 1-2.)
Although long and convoluted, Nathan’s Complaint made allegations falling into what
can best be described as two categories. The first category contained allegations that certain acts
supposedly taken by Louis caused Nathan to suffer individual and direct injury, i.e., allegations
relating to Nathan’s “direct” claims. For example, Nathan alleged that Louis arbitrarily decreased
his job duties and responsibilities, “marginalized” him, failed to provide him with information
related to Logan Square Aluminum and Silver Real Estate, and ultimately, terminated his
employment with Logan Square Aluminum. (See, e.g., id. ¶ 79.)
The second category contained allegations regarding separate acts purportedly taken by
Louis that injured Logan Square Aluminum and Silver Real Estate, i.e., allegations relating to
Nathan’s “derivative” claims. These allegations focused on the assertion that Louis supposedly
awarded himself excessive compensation from Logan Square Aluminum and/or Silver Real
Estate, wasted corporate assets, and usurped two corporate opportunities in 2013. (See, e.g., id.
¶¶ 18, 25.) On the issue of corporate opportunities, Nathan alleged that Louis improperly
purchased property located near the Merchandise Mart in Chicago, Illinois, and then rented the
space to Logan Square Aluminum. Nathan asserted that this opportunity should have been made
available to Logan Square Aluminum and/or Silver Real Estate. (Id. ¶¶ 31-34.) Nathan also
alleged that Louis, along with two partners, improperly purchased the former Macy’s warehouse
2
Specifically, Nathan swore that Logan Square Aluminum and Silver Real Estate were owned one-third by Nathan,
one-third by Louis, and one-third by Amanda Nadine Silver and Roslyn Ruth Silver Turner (with their shares being
held in trust). (Compl., Ex. A, ¶¶ 1-3.)
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in the Logan Square neighborhood of Chicago, Illinois. Again, Nathan asserted that this
opportunity should have been made available to Logan Square Aluminum, and that Louis further
engaged in self-dealing by renting space in the former Macy’s warehouse to that company. (Id.
¶¶ 35-36.) These were the sole purported “corporate opportunities” identified in the Complaint.
II. Nathan Alleged That It Would Have Been Futile For Him To Demand That Logan
Square Aluminum And Silver Real Estate Pursue Litigation Against Louis.
With respect to the Complaint’s derivative claims, Nathan alleged that he did not know
the composition of Logan Square Aluminum’s or Silver Real Estate’s boards of directors, but
that Louis “effectively functioned as the sole director” of these companies. 3 (Id. ¶¶ 57-58.) As a
result, Nathan alleged that he should be excused from demanding that these companies pursue
litigation against Louis. (Id. ¶¶ 62-67.)
III. The Co-Executors Of Nathan’s Estate Substituted In As Plaintiffs Following

Nathan’s Death.
On January 2, 2018, Nathan died, and his attorneys moved to spread the death of record
and to substitute two of Nathan’s adult children, Joseph Silver and Michelle Silver, as plaintiffs
in their capacity as the co-executors of Nathan’s estate. (Mot. to Substitute Plaintiffs, Ex. C.)
Louis did not object to the requested substitution, and the Court granted the motion on January 4,
2018. (1/4/18 Order, Ex. D.)
IV. The Composition Of The Relevant Boards Of Directors Changed In May 2018.
On May 12, 2018, Joseph was named a director of Logan Square Aluminum and Silver
Real Estate, in addition to 2470 North Milwaukee Corporation (“2470 North”). (First
Amendment, Ex. E, ¶ 101.) 2470 North is a separate corporation owned by various members of
the Silver family, including Louis and, prior to his death, Nathan. (Id. ¶ 98, 102-103.)
3
Nathan’s claimed ignorance is odd, given that at various points in the Complaint he stated that he was a director of
both companies. (See, e.g., Compl., Ex. A, ¶¶ 1, 27.)
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Also on May 12, 2018, Barry Cohodes was named a director of Logan Square
Aluminum, Silver Real Estate, and 2470 North. Mr. Cohodes is the Chief Financial Officer of
Logan Square Aluminum. (Id. ¶ 101.)
V. Nathan’s Adult Children “Acquired” Nathan’s Shares In Family-Owned

Companies And Amended The Complaint To Assert Their Own Individual And
Derivative Claims.
On November 12, 2018, Joseph and Michelle, the co-executors of Nathan’s estate, and
Rochelle Silver, another one of Nathan’s adult children, moved to file a “Verified Amendment”
to the Complaint. The Court granted the request, instanter, on November 16, 2018. (11/16/18
Transcript, Ex. F, p. 9.) The “Verified Amendment Adding Parties and Counts VII Through XI
to the Verified Complaint for Injunctive and Other Relief” (“First Amendment”) once again
altered the plaintiffs in this lawsuit. In addition to the derivative and direct claims Nathan
asserted in the Complaint (which were being litigated by the co-executors since Nathan’s death),
Joseph, Michelle, and Rochelle asserted in the First Amendment their own derivative and direct
claims against Louis, specifically: (i) a second “Shareholders’ Derivative Claim” asserted on
behalf of Logan Square Aluminum, Silver Real Estate, 2470 North, Silver Development, and
Silver-Touhy 4 (collectively, the “Family-Owned Companies”) (Count VII); (ii) a second set of
derivative and direct claims against Louis for breach of fiduciary duty (Count VIII); (iii) a
second set of derivative and direct claims against Louis for unjust enrichment (Count IX); (iv) a
restated claim for accounting (Count X); and (v) a restated claim for injunction (Count XI). 5
(See generally First Amendment, Ex. E.)
4
Silver Development and Silver-Touhy are also businesses owned by members of the Silver family. (First
Amendment, Ex. E, ¶¶ 98-99.)
5
The distinction between the labeling of a “second” claim versus a “restated” claim is intentional. In the First
Amendment, Plaintiffs only incorporated paragraphs 1-92 of the Complaint. As a result, the original claims for
accounting and injunction fell by the wayside and were restated in Counts X and XI.
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In the First Amendment, Joseph, Michelle, and Rochelle also swore that they had
“acquired” Nathan’s shares in Logan Square Aluminum, Silver Real Estate, 2470 North, and the
other Family-Owned Companies. 6 (Id. ¶ 95.) Nathan no longer owned stock in those companies.
(Id.) Moreover, although Joseph, Michelle, and Rochelle purported to assert derivative claims,
they made no independent allegations about making a demand on the companies’ boards that the
companies themselves pursue litigation against Louis. Instead, they incorporated Nathan’s
previous demand allegations. (Id. p. 2.)
VI. After Louis Moved To Dismiss The Lawsuit, Joseph And Michelle Filed A Second
Amendment.
On December 17, 2018, Louis moved to dismiss this suit in its entirety, establishing that
the original Complaint and First Amendment were legally deficient for several reasons,
including: (i) Nathan’s derivative claims failed as a matter of law because he was no longer a
shareholder; (ii) Joseph, Michelle, and Rochelle lacked standing to assert derivative claims
challenging conduct that occurred before they “acquired” Nathan’s stock in Logan Square
Aluminum, Silver Real Estate, or any of the Family-Owned Companies; and (iii) Joseph,
Michelle, and Rochelle could not pursue their own derivative claims because they failed to make
the requisite demand on the relevant boards of directors.
Instead of responding to Louis’ motion, Joseph and Michelle sought leave to file a
Second Amendment, suggesting they could cure the deficiencies highlighted in Louis’s motion.
(2/7/19 Order, Ex. H.) The Court granted leave, and on February 14, 2019, Joseph and Michelle
filed the Second Amendment on behalf of themselves, individually, and as co-executors of
6
Joseph verified the First Amendment, swearing under penalty of perjury that its allegations are true.
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Nathan’s estate and co-trustees of the Nathan J. Silver Trust (“Trust”) (collectively,
“Plaintiffs”). 7
Despite their prior sworn-to representations in the First Amendment, and those of Nathan
in the Complaint, Joseph and Michelle now assert in the Second Amendment that neither Nathan
nor them ever owned shares in Logan Square Aluminum, Silver Real Estate, or any other
Family-Owned Company. Rather, the “Nathan J. Silver Trust” has always owned, and continues
to own, those shares. (Second Amendment, Ex. G, ¶¶ 1-92(a), 95, 98.) Clearly, Joseph and
Michelle changed course on the stock-ownership issue in an attempt to circumvent one of the
dispositive points Louis made in his motion to dismiss. But Joseph and Michelle did not address
the other identified legal deficiencies. Indeed, the Second Amendment reasserts the same causes
of action pleaded in the First Amendment. Accordingly, the Second Amendment, like the
original Complaint and First Amendment, fails to state a claim. It should be dismissed with
prejudice.
LEGAL STANDARD
The standard governing a § 2-615 motion is well-settled. A court should grant the motion
where, as here, the complaint fails to state a claim upon which relief may be granted. Small v.
Sussman, 306 Ill. App. 3d 639, 642 (1st Dist. 1999) (granting motion to dismiss). When
evaluating the complaint, only well-pleaded facts are taken as true; conclusions of law or factual
conclusions unsupported by specific facts are not. Id.
In contrast to a § 2-615 motion, one brought pursuant to § 2-619 admits the legal
sufficiency of the complaint, but raises a defense that defeats the complaint. Diotallevi v.
Diotallevi, 2013 IL App (2d) 111297, ¶ 25. The expiration of an applicable statute of limitations
7
Rochelle is no longer a plaintiff.
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is a defense that may be raised by a § 2-619 motion. Id. ¶ 44 (granting motion to dismiss). With
the exception of the argument in Section VI regarding the statute of limitations and the argument
in Section VII regarding Plaintiffs’ violation of § 2-603, Louis’ motion is advanced under § 2-
615.
ARGUMENT
I. All Of Nathan’s Derivative Claims Fail As A Matter Of Law.
As established below, each of the “derivative” claims Nathan asserted on behalf of Logan
Square Aluminum and Silver Real Estate (Counts I, II, and IV) should be dismissed.
A. Count I fails for two independent reasons: (i) no standalone claim for
“Shareholders’ Derivative Action” exists, and (ii) Nathan does not own
shares in Logan Square Aluminum or Silver Real Estate, a prerequisite to
any derivative claim.
In Count I of the Complaint, Nathan purported to assert, “pursuant to” 805 ILCS 5/7.80,
what he called a “Shareholders’ Derivative Action” “on behalf of” Logan Square Aluminum and
Silver Real Estate. (Compl., Ex. A, ¶ 72.) Count I asserted no substantive cause of action, e.g.,
breach of fiduciary duty or unjust enrichment. (Id. ¶¶ 72-76.) It literally was an empty
“shareholders’ derivative claim.”
For this reason alone, Count I should be dismissed. Under Illinois law, there is no
standalone claim for “shareholders’ derivative action.” Rather, a shareholder derivative suit, or a
derivative claim, is the vehicle by which a shareholder may assert a substantive claim belonging
to the corporation at issue. The very statute upon which Count I relied, § 5/7.80 of the Business
Corporation Act, makes this clear. It provides that—in appropriate circumstances and if certain
rules are followed—a shareholder can assert, derivatively, a corporate claim on behalf of the
company. 805 ILCS 5/7.80. But § 5/7.80 does not create an independent cause of action.
Accordingly, Count I is a legal nullity.
-7-
There is a second, independent reason Count I should be dismissed—neither Nathan nor
his estate own shares in Logan Square Aluminum and Silver Real Estate. Indeed, in their verified
First Amendment, Joseph, Michelle, and Rochelle swore that they “acquired” all of Nathan’s
stock in those companies. (First Amendment, Ex. E, ¶ 95.) This is fatal to Nathan’s derivative
claims. Under established Illinois law, a derivative plaintiff “must have been a shareholder at the
time of the transaction of which he complains and must maintain his status as a shareholder
throughout the entire pendency of the action.” Lower v. Lanark Mut. Fire Ins. Co., 151 Ill. App.
3d 471, 473 (2d Dist. 1986) (dismissing derivative claims); see also Weil v. Northwest Industries,
Inc., 168 Ill. App. 3d 1, 5-6 (1st Dist. 1988) (dismissing derivative claim and holding former
shareholder lacked standing to assert such claim because he no longer owned shares). Because
Nathan does not own stock in Logan Square Aluminum and Silver Real Estate, he lacks standing
to assert against Louis any derivative claims on their behalf. Count I should be dismissed for this
reason as well. See Lower, 151 Ill. App. 3d at 473.
Louis anticipates that Plaintiffs will attempt to circumvent this dispositive point—
Nathan’s lack of stock ownership—by arguing that in response to Louis’ original motion to
dismiss, they filed the Second Amendment, which now alleges that (i) shares in Logan Square
Aluminum and Silver Real Estate have always been owned by the Trust, (ii) Nathan was the
original beneficiary of that Trust, and (iii) upon Nathan’s death, Joseph and Michelle became
beneficiaries. 8 (Second Amendment, Ex. G, ¶¶ 1-92(a), 95, 98.)
8
Tellingly, in the original Complaint, Nathan (who was alive at the time) made no mention of the Trust and swore
under penalty of perjury that he owned stock in Logan Square Aluminum and Silver Real Estate. (Compl., Ex. A, ¶¶
1, 27.) In other words, with the filing of the Second Amendment, Plaintiffs have now told three different stories
about the stock ownership: (i) Nathan owns it; (ii) it was “acquired” by Joseph, Michelle, and Rochelle; and (iii) a
trust has always owned it and still does.
-8-
Any such argument would be meritless. As an initial matter, Illinois law does not allow
Plaintiffs to treat a complaint like an Etch A Sketch® that Plaintiffs can shake to erase prior
verified factual assertions which undermine their claims. As noted above, in the First
Amendment, Joseph and Michelle—who are not only Nathan’s adult children, but also co-
executors of Nathan’s estate and co-trustees of the Trust at issue—swore under penalty of
perjury that they and Rochelle “acquired” Nathan’s stock in Logan Square Aluminum and Silver
Real Estate. (First Amendment, Ex. E, ¶ 95.) This unqualified, verified factual assertion is a
judicial admission by which Plaintiffs are now bound. See, e.g., Konstant Products, Inc. v.
Liberty Mut. Fire Ins. Co., 401 Ill. App. 3d 83, 86, 929 N.E.2d 1200 (2010) (“A party’s
admissions contained in an original verified pleading are judicial admissions that still bind the
pleader even after the filing of an amended pleading that supercedes [sic] the original.”);
Hatchett v. W2X Inc., 2013 Il App (1st) 121758, ¶ 32 (same); American National Bank & Trust
Co. of Chicago v. Erickson, 115 Ill. App. 3d 1026, 1029, 452 N.E.2d 3, 6 (1st Dist. 1983) (same).
But even if the Court chose to overlook Plaintiffs’ binding judicial admission, that does
not save Count I. Under Plaintiffs’ new allegation in the Second Amendment, Nathan still is not
a shareholder in Logan Square Aluminum and Silver Real Estate. Indeed, the Second
Amendment now claims that Nathan never was a shareholder. (Second Amendment, Ex. G, ¶¶ 1-
92(a), 95, 98.) The Trust may own shares, but under Plaintiffs’ new allegations, Nathan never
did, and that is what matters. Only “shareholders of record” can bring derivative suits under
Illinois law. 805 ILCS 5/7.80 (emphasis added). Put simply, whether you choose to believe the
First Amendment or the Second Amendment, it is irrefutable that Nathan is not a “shareholder of
record.” Count I should be dismissed.
-9-
B. Counts II and IV fail, to the extent they assert derivative claims or otherwise
seek to recover for injury to Logan Square Aluminum or Silver Real Estate,
again because Nathan does not own shares in those companies.
Unlike Count I, Nathan asserted substantive claims in Counts II and IV for breach of
fiduciary duty and unjust enrichment, respectively. Moreover, in each of these counts, Nathan
attempted to recover both derivatively for purported injury to Logan Square Aluminum and
Silver Real Estate, and directly for his own alleged injury. (Compl., Ex. A, ¶ 79 (alleging Louis
“breached his fiduciary duties to Logan Square Aluminum and Silver Real Estate and Plaintiff”)
and ¶ 92 (alleging Louis was “unjustly enriched at the expense of and to the detriment of, [Logan
Square Aluminum] and [Silver Real Estate] and the Plaintiff”).)
For example, Nathan alleged that Louis purportedly (i) took excessive compensation
from Logan Square Aluminum and Silver Real Estate, (ii) usurped two corporate opportunities
belonging to those companies by individually (or with business partners) purchasing real estate
and then leasing that real estate back to the companies, and (iii) “misuse[d]” the “Companies’
assets,” including by pledging corporate assets and incurring corporate debt for his own benefit.
(Id. ¶¶ 16-19, 31-36, 79(d)-(f), and 79(i).) These allegations are “classic” examples of purported
corporate harm—injury to Logan Square Aluminum and/or Silver Real Estate, and not to Nathan
individually—for which relief must be sought derivatively. See, e.g., Small, 306 Ill. App. 3d at
643-644 (holding that claim based on diversion of corporate profits to entities owned by the
majority shareholder was derivative, not direct); Ching v. Porada, 560 F. Supp. 2d 675, 679
(N.D. Ill. 2008) (holding that claim based on excessive compensation, misappropriation of
assets, and usurpation of corporate opportunities was derivative, not direct). Stated differently,
this alleged misconduct by Louis supposedly injured the companies and affected all company
shareholders equally; Nathan, himself, did not suffer injury “separate and distinct from that
- 10 -
suffered by other shareholders”—the legal definition of a “direct” claim. 9 Davis v. Dyson, 387
Ill. App. 3d 676, 690 (1st Dist. 2008); see also Small, 306 Ill. App. 3d at 644 (holding that
“direct” claim only exists where plaintiff shareholder suffered injury separate and distinct from
other shareholders); Weil, 169 Ill. App. 3d at 5 (same).
Nathan clearly knew the distinction between derivative and direct claims. Otherwise,
there would have been no reason for him to assert both types in Counts II and IV. Nathan’s
problem, however, is that he does not own shares in Logan Square Aluminum or Silver Real
Estate, and, as explained above, share ownership is a prerequisite to any derivative claim. See,
e.g., Lower, 151 Ill. App. 3d at 473. Consequently, the allegations in Counts II and IV that
challenged Louis’ compensation or assert that he usurped corporate opportunities or wasted or
misused corporate assets—prototypical allegations of corporate injury, as opposed to direct
personal injury—cannot stand and should be stricken or dismissed, along with any other
allegations in Counts II and IV of a “derivative” nature.
II. The Second Amendment Abandoned Or Withdrew Any “Direct” Claim By Nathan
In Count IV, And Counts V And VI In Their Entirety.
As noted above, the Second Amendment explicitly incorporated only paragraphs 1
through 92 of the Complaint. (Second Amendment, Ex. G, p. 2.) This has dispositive
consequences for Counts IV, V, and VI of the Complaint. Under Illinois law, where, as here, an
amendment “does not refer to or adopt the prior pleading, the earlier pleading ceases to be part of
the record for most purposes, being in effect abandon and withdrawn.” Bohomme v. St. James,
2012 IL 112393, at ¶ 17.
9
Nathan’s “direct” claims in Counts II and IV, in contrast, do focus on his supposed separate and individualized
injury. For instance, Nathan asserted that Louis “diminished [Nathan’s job] duties and responsibilities,”
“marginalized” Nathan, and denied Nathan his supposed right to inspect company books and records. (Compl., Ex.
A, ¶¶ 79(a)-(b) and (h).)
- 11 -
Count IV, for unjust enrichment, is found at paragraphs 91 through 93 of the Complaint,
with a specific prayer for relief following paragraph 93. (Compl., Ex. A, ¶¶ 91-93.) Paragraph 91
simply incorporated all prior paragraphs of the Complaint, and paragraph 92 stated only: “By
their wrongful acts and omissions, Defendants were unjustly enriched at the expense of, and to
the detriment of, Logan Square Aluminum and Silver Real Estate Management and [Nathan].”
(Id. ¶ 92-93.) By choosing to not incorporate Count IV’s prayer for relief, the Second
Amendment “abandon[ed] and withdr[ew]” the prayer from the operative pleading. Bohomme,
2012 IL 112393, at ¶ 17. This is dispositive, as Illinois law requires that “[e]very count in every
complaint . . . contain specific prayers for the relief to which the pleader deems himself or herself
entitled . . . .” 735 ILCS 5/2-604. Accordingly, any “direct” claims that Nathan asserted in Count
IV should be dismissed. 10
Counts V and VI of the Complaint, for an accounting and “Injunction,” respectively, are
nowhere mentioned or incorporated into the Second Amendment. They have therefore been
“abandon and withdrawn,” and should be dismissed/stricken as well. Bohomme, 2012 IL 112393,
at ¶ 17.
III. All Derivative Claims Asserted In Counts VII, VIII, And IX By Joseph And
Michelle, Whether Individually, As Co-Executors Of Nathan’s Estate, Or As Co-
Trustees Of The Trust, Are Legally Deficient.
Although it is sometimes unclear from the Second Amendment in what capacity they
attempt to assert them, Joseph and Michelle are apparently pursuing in Counts VII, VIII, and IX
derivative claims on behalf of all or certain of the Family-Owned Companies. For the reasons set
forth below, independently and jointly, all of those derivative claims fail as a matter of law.
10
Count IV’s “derivative” claims fail as a matter of law for the reasons stated in Section I.B. But the lack of a
specific prayer for relief in Count IV is yet another reason those derivative claims should be dismissed.
- 12 -
A. Count VII of the Second Amendment fails because, among other deficiencies,
there is no standalone claim for “Shareholders’ Derivative Action” and
neither Nathan’s estate nor the Trust own shares in the companies at issue.
Like Nathan did in Count I of the Complaint, Joseph and Michelle—as co-executors of
Nathan’s estate and as co-trustees of the Trust—attempt to assert in Count VII of the Second
Amendment a standalone claim for “Shareholders’ Derivative Action.” (Second Amendment,
Ex. G, ¶¶ 120-140.) Count VII should be dismissed for four independent reasons.
First and foremost, there is no independent claim for “shareholders’ derivative action.”
(Supra, pp. 7-8.) As established above, a would-be derivative plaintiff must assert an actual
cause of action (e.g., breach of fiduciary duty). In Count VII, Joseph and Michelle did not do so.
Second, Nathan’s “estate” (one of two plaintiffs in this count) does not own shares in the
Family-Owned Companies. Indeed, Plaintiffs made no such an allegation, whether in the First
Amendment or Second Amendment. Because the “estate” does not own shares in the companies
at issue, it cannot pursue derivative claims on their behalf. (Supra, pp. 8-10.)
Third, as established above, based on the unequivocal judicial admission contained in the
First Amendment that Joseph, Michelle, and Rochelle “acquired” Nathan’s shares in Family-
Owned Companies, Joseph and Michelle cannot now argue—in attempt to avoid dismissal—that
the Trust owns the shares. (Id.) Accordingly, as a non-shareholder, the Trust (the second plaintiff
in this count) cannot pursue derivative claims either.
Fourth, Count VII contains paragraph upon paragraph of allegations that are not even
close to “derivative” in nature. For example, in paragraphs 124 through 127, Joseph and
Michelle complain that Louis purportedly failed to provide company information to them.
(Second Amendment, Ex. G, ¶¶ 124-130.) Similarly, in paragraphs 134 through 138, Joseph and
Michelle claim that Louis and the Family-Owned Companies—on whose behalf they are
attempting to sue in Count VII—failed to make distributions so that Nathan’s estate could pay
- 13 -
Nathan’s income-tax liability. (Id. ¶¶ 134-138.) And in paragraphs 131 through 133, Joseph and
Michelle assert legal conclusions regarding “oppression” of minority shareholders. (Id. ¶¶ 131-
133.) None of these paragraphs contain well-pleaded facts showing harm to the Family-Owned
Companies themselves, which is the very basis of a derivative claim. Davis, 387 Ill. App. 3d at
690 (defining direct and derivative claims); Small, 306 Ill. App. 3d at 644 (same); Weil, 169 Ill.
App. 3d at 5 (same). Instead, these allegations relate to purported direct harm to Joseph,
Michelle, and whatever entity/individual paid Nathan’s income taxes. Accordingly, these
allegations cannot support a derivative claim.
For all of these reasons, individually and jointly, Count VII should be dismissed.
B. The derivative claims in Counts VIII and IX of the Second Amendment are
also legally deficient because, among other things, Nathan’s estate does not
own shares in the companies at issue, and Joseph and Michelle did not own
them at the time of the challenged conduct.
Count VIII contains both derivative and direct claims against Louis for breach of
fiduciary duty. (Second Amendment, Ex. G, ¶¶ 143-147.) Count IX, for its part, asserts a
derivative claim against Louis for unjust enrichment. (Id. ¶¶ 143-147.) The derivative claims in
each of these counts fail as a matter of law.
As an initial matter, the derivative claims in Counts VIII and IX cannot be asserted by all
“Plaintiffs,” as pleaded in the Second Amendment. Based on Joseph and Michelle’s binding
judicial admission (supra at p. 9-10), they are the only plaintiffs who own shares in the Family-
Owned Companies. They “acquired” them from Nathan (First Amendment, Ex. E, ¶ 95.)
Accordingly, as non-shareholders, Nathan’s estate and the Trust cannot pursue derivative claims.
(Supra at pp. 8-10.) Counts VIII and IX should therefore be dismissed with respect to these
particular plaintiffs.
- 14 -
The derivative claims that Joseph and Michelle, individually, assert in Counts VIII and
IX on behalf of Logan Square Aluminum and Silver Real Estate, and any other Family-Owned
Company fare no better. In these counts, Joseph and Michelle base their derivative breach of
fiduciary duty and unjust enrichment claims on many, if not all, of the same allegations that were
the basis of Nathan’s derivative claims. Specifically, Joseph and Michelle allege that Louis
purportedly took the same excessive compensation from Logan Square Aluminum and Silver
Real Estate, supposedly usurped the same real-estate opportunities belonging to these companies,
and allegedly wasted the same corporate assets. (Second Amendment, Ex. G, ¶¶ 145, 149; see
also Compl., Ex. A, ¶ 79.) But Joseph and Michelle cannot assert derivative claims based on this
alleged conduct. As explained above, to possess the right to assert a derivative claim, the plaintiff
must be a shareholder “at the time of the transaction of which he or she complains” or become a
shareholder “by operation of law.” 805 ILCS 5/7.80. These requirements are not satisfied here.
First, it is irrefutable that neither Joseph nor Michelle owned shares in Logan Square Aluminum
or Silver Real Estate at the time Louis allegedly undertook the conduct being challenged in the
derivative claims brought on behalf of these companies. Joseph and Michelle never even attempt
to plead such shareholder status (because they cannot). (See generally Second Amendment, Ex.
G.)
Second, Joseph and Michelle failed to plead—because they cannot—that they became
shareholders in Logan Square Aluminum or Silver Real Estate “by operation of law.” Instead, all
Joseph and Michelle allege is that they “acquired” Nathan’s shares in the companies. (First
Amendment, Ex. E, ¶ 95.) This conclusory statement, which lacks any supporting factual detail,
is legally insufficient. Small, 306 Ill. App. 3d at 642.
- 15 -
Because (i) Joseph and Michelle were not shareholders at the time Louis purportedly took
excessive compensation from Logan Square Aluminum or Silver Real Estate, usurped the real-
estate opportunities, and wasted corporate assets, and (ii) did not acquire their shares by
operation of law, Joseph and Michelle, individually, cannot assert any derivative claim based
upon such conduct. 805 ILCS 5/7.80. The Court should therefore dismiss all such derivative
claims brought by Joseph and Michelle, individually.
C. Putting aside all of the other fatal deficiencies, Joseph and Michelle cannot
assert derivative claims in any capacity because they failed to make the
necessary demand on Logan Square Aluminum’s and Silver Real Estate’s
respective boards of directors, or the board of any other Family-Owned
Company.
Regardless of the conduct challenged, all of the derivative claims that Joseph and
Michelle assert in Counts VII, VIII, and IX—whether individually, as co-trustees of Nathan’s
estate, or as co-trustees of the Trust—fail as a matter of law, because Joseph and Michelle did
not satisfy the prerequisites for an Illinois derivative action. In order to institute such an action,
the would-be derivative plaintiff must allege with particularity and specificity either: (i) that he
or she made a pre-suit demand on the relevant board of directors, requesting the directors to
assert the claim, or (ii) that such demand would be futile. 805 ILCS 5/7.80(b); 805 ILCS 180/40-
1; In re Abbott Laboratories Derivative Shareholders Litigation, 325 F.3d 795, 804 (7th Cir.
2003) (“The shareholder must state with particularity why a demand would have been futile.”).
This prerequisite to a derivative lawsuit is founded on “basic principle[s] of corporate
governance,” and allows the board of directors to “exercise their business judgment and
determine whether litigation is in the best interest of the corporation.” Abbott, 325 F.3d at 803.
Accordingly, the “demand” requirement cannot simply be shrugged off by a would-be plaintiff.
Sherman v. Ryan, 392 Ill. App. 3d 712, 722 (1st Dist. 2009) (“Because courts are ill-equipped to
engage in post hoc substantive review of business decisions, the business judgment rule operates
- 16 -
to preclude a court from imposing itself unreasonably on the business and affairs of a
corporation.”) And courts have not hesitated to dismiss a lawsuit where, as here, demand has not
been made or futility properly pleaded with specificity. Id. at 722-28 (dismissing amended
complaint based on failure to allege that demand on the board would have been futile); see also
Spillyards v. Abboud, 278 Ill. App. 3d 663, 681 (1st Dist. 1996) (dismissing derivative claims
based on lack of particularized factual allegations satisfying demand prerequisite).
Louis pointed to this bedrock law in this motion to dismiss the First Amendment, which
contained no separate allegation that demand was made or that it would have been futile (see
generally First Amendment, Ex. E). Tellingly, Plaintiffs could not fix this dispositive problem in
their Second Amendment. All Plaintiffs offer is the following:
These acts of oppression and others, including Defendants’ failure and refusal to
provide Joseph S. Silver with material information about the Nominal
Defendants’ business, access to company books and records, and financial
information upon request, despite Joseph’s director status and entitlement to the
information, as well as the adversarial nature of [sic] and this litigation,
underscores the futility of making a demand on the Board of Directors of the
Nominal Defendants because of the Board majority’s unwillingness to correct the
foregoing inequities and unlawful actions.
(Second Amendment, Ex. G, ¶ 111.)
Such vague and conclusory allegations do not come close to satisfying the law’s
requirement that Joseph and Michelle plead facts establishing that pre-suit demand would have
been futile. 805 ILCS 5/7.80(b); 805 ILCS 180/40-1; In re Abbott, 325 F.3d at 804. Indeed, to
satisfy their high burden, Joseph and Michelle had to plead facts with particularity and
specificity establishing a “reasonable doubt that, as of the time the complaint is filed, the board of
directors could have properly exercised its independent and disinterested business judgment in
responding to a demand.” Sherman, 392 Ill. App. 3d at 723 (explaining Rales test of demand
futility). Establishing such “reasonable doubt” is no small task, given the policies of the
- 17 -
business-judgment rule and its relationship to the “demand” requirement. Courts, for example,
have rejected attempts to show that directors are not “disinterested” where the plaintiff has
alleged that: (i) directors of a corporation failed to act in the corporation’s best interest and,
instead, acted to avoid personal liability for securities violations, Sherman, 392 Ill. App. 3d at
724; see also Silver v. Allard, 16 F. Supp. 2d 966, 970 (N.D. Ill. 1998); (ii) a board was
“dominated” by the chairman controlling a “huge shareholding” and was comprised of friends
that served together on other boards, which led to criticism of the first board’s composition by
corporate “watchdogs,” Sherman, 392 Ill. App. 3d at 724; and (iii) directors improperly approved
a transaction for purposes of “entrenchment” and in order to continue receiving an annual salary,
Spillyards, 278 Ill. App. 3d at 676-77.
Here, unlike even the above cases, Joseph and Michelle made no specific and particular
factual allegations establishing that a majority of the members of the relevant boards of
directors—which are now made up of Plaintiff Joseph himself, non-party Barry Cohodes, and
Louis—would be unable to evaluate their demand in a disinterested and independent manner.
Certainly Joseph could evaluate such demand. And even if you exclude Louis from the futility
analysis, Plaintiffs say nothing about Mr. Cohodes, let alone establish with specific, well-pleaded
facts that he is an “interested” director incapable of exercising business judgment with respect to
any board “demand.” (See generally Second Amendment, Ex. G.) Joseph and Michelle’s
demonstrated inability to plead demand futility—with specific and particular facts—dooms all of
their derivative claims. 11
11
Joseph and Michelle also cannot rely on any demand allegations contained in Nathan’s original Complaint (which
were sparse in their own right). (Compl., Ex. A, ¶¶ 52-67.) From the time that Nathan filed his Complaint until the
time that Joseph and Michelle filed the Second Amendment, the relevant boards of directors changed from Nathan
and Louis to Joseph, Mr. Cohodes, and Louis. (Id. ¶¶ 1, 27, 58; Second Amendment, Ex. G, ¶ 99.) Under Illinois
law, where, as here, the composition of the relevant board of directors changes, and the derivative plaintiff seeks to
- 18 -
IV. Count X Should Be Dismissed Because Joseph and Michelle Have Not Established—
And Cannot Establish—That They Are Entitled To An Equitable Accounting.
“The right to an accounting is not an absolute right, but one which should be accorded
only on equitable principles.” Tarin v. Pellonari, 253 Ill. App. 3d 542, 555-56 (1st Dist. 1993).
An accounting “will not be ordered if the circumstances are such as to make it unnecessary or
improper.” Id.
Here, the Second Amendment fails to plead facts demonstrating, as it must, that
“Plaintiffs’” request for an accounting (Count X) is necessary and warranted. 12 Instead, the
Second Amendment confirms that Count X is superfluous. In that count, Plaintiffs state that they,
along with Logan Square Aluminum, Silver Real Estate, and other Family-Owned Companies
have supposedly been damaged by Louis’ breaches of fiduciary duty. (Second Amendment, Ex.
G, ¶ 152.) As a result of those breaches, Plaintiffs suggest that Louis be made to account for the
“full amount of damages and injuries they suffered.” (Id. at ¶ 153.)
This supposed “need” for an accounting ignores that the amount of money damages, if
any, that Plaintiffs may legally recover against Louis for his alleged breaches of fiduciary duty is
already at issue in Counts II and VIII, and would be the subject of discovery. (Compl., Ex.
A, p. 22 (seeking “actual and compensatory damage suffered by [Nathan] and the Companies as
a result of Louis’ wrongful conduct [i.e., breaches of fiduciary duty]”); Second Amendment, Ex.
G, p. 19 (seeking “actual and compensatory damage suffered by [Joseph, Michelle, and
Rochelle] and the Companies as a result of Louis’ wrongful conduct [i.e., breaches of fiduciary
amend the complaint subsequent to that change, demand must be made again. Braddock v. Zimmerman, 906 A.2d
776, 786 (Del. 2006) (dismissing derivative suit where plaintiff failed to make demand or properly plead futility);
Abbott, 325 F.3d at 803 (holding that Illinois follows Delaware law to determine whether the demand requirement
has been satisfied); see also Sherman, 392 Ill. App. 3d at 722 (“Demand futility must be alleged against the board as
it was composed on the date on which plaintiffs filed their third amended complaint.”) (emphasis added).
12
It is unclear to whom the term “Plaintiffs” refers for purposes of this count. Presumably, the term includes Joseph
and Michelle individually, and as co-executors of Nathan’s estate and co-trustees of the Trust.
- 19 -
duty]”).) As a result, the separate request in Count X for an accounting is unnecessary and should
be dismissed. Tarin, 253 Ill. App. 3d at 556 (holding that claim for accounting was unnecessary
where pre-trial discovery would reveal amounts allegedly owed to plaintiff); see also Coughlin v.
SeRine, 154 Ill. App. 3d 510, 516 (1st Dist. 1987) (holding that claim seeking accounting was
properly dismissed when damages information would be “readily available by pursuing
appropriate discovery, or even at trial, as part of the [other] causes of action . . . rather than as a
separate action for accounting”). 13
V. Count XI’s Claim For “Injunction” Is Another Legal Nullity.
The Court should dismiss Count XI of the Second Amendment—purportedly stating a
cause of action for “Injunction”—because no such claim exists. “Injunction” is not an
independent cause of action. Town of Cicero v. Metropolitan Water Reclamation Dist. Of
Greater Chicago, 2012 IL App (1st) 112164, at ¶ 46 (2012) (citing Walker v. Bankers Life &
Casualty Co., No. 06 C 6906, 2007 WL 967888, at *4 (N.D. Ill. Mar. 28, 2007)). It is an
equitable remedy that a court may order only after the party seeking injunctive relief prevails on
the merits of an underlying cause of action. Id.
VI. Any Claim By The Trust, Whether Derivative Or Direct, Seeking To Recover Based
On Conduct Occurring More Than Five Years Ago Is Time Barred.
In Illinois, the statute of limitations for breach of fiduciary duty and unjust enrichment
claims is five years. See 735 ILCS 5/13-205; Fuller Family Holdings, LLC v. Northern Trust Co.
311 Ill. App. 3d 605, 618 (1st Dist. 2007) (breach of fiduciary duty); CitiMortgage, Inc. v.
Parille, 2016 IL App (2d) 150286, ¶ 13 (unjust enrichment). As noted above, Joseph and
Michelle did not file suit as co-trustees of the Trust until February 14, 2019. Accordingly, they
cannot seek to recover on any claim—whether derivative or direct—asserted as co-trustees
13
Any derivative claim for accounting should also be dismissed for the reasons set forth in Sections I.B and III.B-C.
- 20 -
which relies on conduct occurring before February 14, 2014. 14 For example, any purported
“corporate opportunity” claim that Joseph and Michelle assert, as co-trustees of the Trust, based
on real-estate transactions involving the property located near the Merchandise Mart or the
former Macy’s warehouse is time barred, as those transactions occurred, based on the
Complaint’s own allegations, in 2013. (See, e.g., Compl., Ex. A, ¶¶ 32-33, 35-36 (discussing
supposed “corporate opportunities” involving these properties).)
VII. The Complaint And Second Amendment Also Violate Illinois Pleading Rules.
Even though this is now Plaintiffs’ third complaint, Plaintiffs have been unable to file a
pleading that conforms to Illinois’ rules. For example, with respect to Counts II and VIII (both
asserting a claim for breach of fiduciary duty), Plaintiffs violated 735 ILCS 5/2-603 because they
included in these counts both derivative (on behalf of certain or all of the Family-Owned
Companies) and direct claims (asserted by Joseph and Michelle, apparently in their capacity as
individuals and as co-executors of Nathan’s estate and co-trustees of the Trust). Such
commingling of claims (derivative and direct), for which Plaintiffs seek separate remedies, is
improper and justifies dismissal. 735 ILCS 5/2-603; Cable America, Inc. v. Pace Electronics,
Inc., 396 Ill. App. 3d 15, 19-22 (1st Dist. 2009) (affirming dismissal of fifth amended complaint
for not identifying and segregating supposed causes of action).
Similarly, Count VIII is brought by all “Plaintiffs,” but does not allege the source of
fiduciary or other duty purportedly owed to each separate Plaintiff. This is a problem that runs
throughout the Complaint and Second Amendment. Individual parties are often grouped together
as “Plaintiffs” without regard to whether all Plaintiffs should actually be included in such
14
Any derivative claim that Joseph and Michelle assert as co-trustees also fails for the reasons articulated in
Sections III.A-C.
- 21 -
grouping. This, too, violates Section 5/2-603, which requires a plain and concise statement of
each Plaintiff’s causes of action.
CONCLUSION
For the foregoing reasons, independently and jointly, Defendant Louis Silver respectfully
requests that the Court grant his motion to dismiss and enter an order dismissing with prejudice
Counts I, II, IV, V, and VI of the Verified Complaint for Injunctive and Other Relief; dismissing
with prejudice Counts VII, VIII, IX, X, and XI of the Verified Second Amendment Adding
Parties and Counts VII through XI to the Verified Complaint for Injunctive and Other Relief; and
granting Louis such other and further relief as the Court deems proper.
Dated: March 22, 2019 Respectfully submitted,

LOUIS SILVER
By: /s/ Richard T. Kienzler

One of his attorneys
Phone: (312) 360-6000
Fax: (312) 360-6520
- 22 -
CERTIFICATE OF SERVICE
The undersigned attorney certifies that on the date below he caused copies of the
foregoing Memorandum of Law in Support of Louis Silver’s Section 2-619.1 Motion to
Dismiss to be served upon the following attorneys via email:
Laurie E. Leader
565 West Adams Street, Suite 600
Jerald A. Kessler
14047 Petronella Drive, Suite 202B
jakessler@igc.org

Law Offices of Michael Lee Tinaglia
444 North Northwest Highway, Suite 350
Park Ridge, Illinois 60068
Gregory J. Scandaglia
Scandaglia Ryan LLP
55 East Monroe Street, Suite 3440
gscandaglia@scandagliaryan.com
Dated: March 22, 2019 /s/ Richard T. Kienzler
Richard T. Kienzler
EXHIBIT A
' - '('
STATE OF ILLINOIS)
) ss
COUNTY OF LAKE )
IN THE CIRCUIT COURT OF THE NINETEENTH

\fUib~\D)
JUDICIAL CIRCUIT, LAKE COUNTY, ILLINOIS
V.f!.'l 1 9 2017
NATHAN SILVER, individually and ) ~
~~~~
derivatively on behalf of )
LOGAN SQUARE ALUMINUM SUPPY, INC., )
and SILVER REAL ESTATE )
MANAGEMENT AND DEVELOPMENT CORP.,
Illinois corporations,
)
)
1 7 CH 7 2 9
) •I
~
Plaintiff, )
)
v. ) No.
)
LOUIS SILVER, individually and as Trustee )
of the AMANDA NADINE SILVER )
TURNER TRUST and the ROSLYN RUTH )
SILVER TURNER TRUST, ROBERT M. )
KNABE, SANFORD BOKOR, )
)
Defendants, )
and )
)
LOGAN SQUARE ALUMINUM )
SUPPLY, INC., an Illinois corporation, and )
SILVER REAL ESTATE )
MANAGEMENT AND DEVELOPMENT CORP.,)
an Illinois corporation, )
Nominal Defendants. )
VERIFIED COMPLAINT FOR INJUNCTIVE AND OTHER RELIEF
NOW COMES the Plaintiff, NATHAN SILVER, by and through his attorneys LAURIE
E. LEADER of the Law Offices of Chicago-Kent and JERALD A. KESSLER, and for his
Verified Complaint for Injunctive and Other Relief, individually and derivatively on behalf of
LOGAN SQUARE ALUMINUM SUPPLY, INC., d/b/a Studio 41, Remodelers Supply Center
and ClimateGuard Windows ("LOGAN SQUARE ALUMINUM") and SILVER REAL
ESTATE MANAGEMENT AND DEVELOPMENT CORP. ("SILVER REAL ESTATE
MANAGEMENT"), against LOUIS SILVER, individually and as Trustee of the AMANDA
NADINE SILVER TURNER TRUST and the ROSLYN RUTH SILVER TURNER TRUST,
ROBERT M. KNABE, an individual, SANFORD BOKOR, an individual, and LOGAN
SQUARE ALUMINUM SUPPLY, INC., an Illinois Corporation, and SILVER REAL ESTATE
MANAGEMENT AND DEVELOPMENT CORP., an lllinois corporation, states as follows:
PARTIES
I. Plaintiff NATHAN SILVER ("Plaintiff'), is an individual who resides at 1015
Sheridan Drive, Wauconda, Lake County, Illinois 60084. Plaintiff is an officer, director and one-
third (113) shareholder of LOGAN SQUARE ALUMINUM and, until April 25, 2017, was an
employee of that Company. Plaintiff is also a shareholder and officer of SILVER REAL
ESTATE MANAGEMENT.
2. Defendant LOUIS SILVER ("LOUIS") is the President and a director and a one-
third (1/3) shareholder of LOGAN SQUARE ALUMINUM and SILVER REAL ESTATE
MANAGEMENT (collectively, "the Companies"). On information and belief, LOUIS resides at
130 Rue Foret, City of Lake Forest, Lake County, Illinois.
3. LOUIS also acts as Trustee of the AMANDA NADINE SILVER TURNER
TRUST and the ROSLYN RUTH SILVER TURNER TRUST. On infonnation and belief, the
remaining one-third (113) of the shares in LOGAN SQUARE ALUMINUM and SILVER REAL
ESTATE MANAGEMENT are held in these two trusts for the benefit of Amanda Nadine Silver
("Amanda") and Roslyn Ruth Silver Turner ("Roslyn"), the children of Bathshevi ("Betty") Iva
2
Silver Turner, the deceased sister of Plaintiff and LOUIS. Under the terms of the respective
Trusts, LOUIS retains possession of the shares held in trust for the benefit of the Trust
Beneficiary until the Beneficiary reaches the age of thirty-five (35). Currently, Amanda is 29
years of age and Roslyn is 32 years of age (collectively, Amanda and Roslyn are referred to as
the "Trust Beneficiaries").
4. Nominal Defendant LOGAN SQUARE ALUMINUM is an Illinois corporation--
formerly known as Logan Square Building Material Supply Inc.- with headquarters at 2500 N.
Pulaski Road, Chicago, Illinois. Said Defendant has several divisions operating under assumed
names including, without limitation, Remodelers Supply Center, ClimateGuard Windows and
Studio 41. All of these are collectively referred to as "LOGAN SQUARE ALUMINUM"
herein, unless otherwise indicated.
5. LOGAN SQUARE ALUMINUM, through its various divisions, manufactures
and/or distributes windows and doors, hardware products, kitchen and bath products, aluminum
and iron products, and lumber and building materials for home remodeling projects.
6. LOGAN SQUARE ALUMINUM's business includes "Remodelers Supply
Center" and "ClimateGuard Windows," which operate and sells from a window and door
showroom. LOGAN SQUARE ALUMINUM's products also include, without limitation,
cabinets and vanities, medicine cabinets and mirrors, faucets and fixtures, sinks, tubs, soakers
and baths, whirlpools, jacuzzi and airbaths, steam and sauna systems, shower systems, toilets and
bidets, countertops, and tile and flooring products, as well as kitchen and bath accessories,
flooring and ornamental railings and fencing. The company distributes and sells these products
through its kitchen and bath showrooms operated under the assumed name of "STUDIO 41 ".
3
There are various STUDIO 41 locations in Arizona and Illinois, including the original showroom
located in Highland Park, Lake County, Illinois.
7. SILVER REAL ESTATE MANAGEMENT owns and/or manages vanous
properties, including properties in which the STUDIO 41 showrooms are located.
8. Defendant ROBERT M. KNABE is an attorney with the firm of McNish, Knabe
& Kroning in Chicago, Illinois, and has been representing Defendants LOGAN SQUARE
ALUMINUM, SILVER REAL ESTATE MANAGEMENT, LOUIS and Plaintiff for in excess of
twenty (20) years.
9. Defendant SANFORD BOKOR is a principal with the accounting firm of
Krupnik, Bokor, Kagda & Brooks, Ltd. in Lincolnwood, Illinois and has been performing
accounting services for Defendants LOGAN SQUARE ALUMINUM, SILVER REAL ESTATE
MANAGEMENT, LOUIS and Plaintiff for in excess of twenty (20) years.
JURISDICTION AND VENUE
10. This Court has subject matter jurisdiction over the Defendants pursuant to 735
ILCS § 5/2-209(a) and one or more of the following subsections: (1), (2), (3), (7), (10), (11), and
(13) of that section.
I I. Venue is proper pursuant to 735 ILCS § 5/2-101, since all of the parties either
reside or do business in Lake County, Illinois.
FACTUAL BACKGROUND
12. Isaac Silver -- the father of Plaintiff, LOUIS and Betty -- founded LOGAN
SQUARE ALUMINUM. Before Isaac's death, Plaintiff and Isaac jointly held 48% of the
Company stock and Isaac held the remaining 52% of the stock. When Isaac died in 1993,
4
Plaintiff divided his 48% stock interest equally among himself and his siblings, so that he,
LOUIS and Betty each owned 16% of the Company stock.
13. When Betty and Lisa Silver (Plaintiff's sister and mother, respectively) were
alive, the siblings shared equally in the profits and assets of LOGAN SQUARE ALUMINUM
and SILVER REAL ESTATE MANAGEMENT. That began to change in 2005 when Betty died
but drastically changed in 2008 following Lisa Silver's death.
14. LOUIS effectively became a majority shareholder in LOGAN SQUARE
ALUMINUM upon Betty's death in 2005, because of his individual shares and because of his
capacity as Trustee over Betty's shares until her children attain the age of thirty-five (35). At the
time of her death, Betty's children were believed to be nineteen (19) and twenty (20) years of
age. LOUIS then possessed actual and de facto power to control the business of LOGAN
SQUARE ALUMINUM and SILVER REAL ESTATE MANAGEMENT; however, he did not
exercise that control until Lisa Silver's death in 2008.
15. Before Lisa Silver died, she divided the remaining 52% of the stock in LOGAN
SQUARE ALUMINUM as follows: 1/3 to LOUIS, 1/3 to Plaintiff and 1/3 to Betty's children
(Roslyn and Amanda) to be held in the AMANDA NADINE SILVER TURNER TRUST and the
ROSLYN RUTH SILVER TURNER TRUST.
16. Shortly after Lisa Silver's death, LOUIS exercised complete control over the
business of LOGAN SQUARE ALUMINUM and SILVER REAL ESTATE MANAGEMENT.
With that complete control and domination, LOUIS has usurped corporate opportunities and
unilaterally used corporate assets for his own benefit to the detriment of the Plaintiff and the
Companies.
5
17. Upon exercising such complete control, LOUIS increasingly oppressed Plaintiff by
significantly reducing his annual compensation and benefits arising out of his employment with,
and stock interest in, LOGAN SQUARE ALUMINUM. In 2008, LOUIS cut Plaintiffs wages in
half- from approximately $1,000,000 annually to $450,000. LOUIS, again, reduced Plaintiffs
wages last year by $1400 per month until he terminated Plaintiff on April 25, 2017, when he
requested to see the Company's books and records, as more specifically set forth herein.
18. In contrast, since 2008, LOUIS significantly and disproportionately increased the
armual compensation, benefits and perquisites he received from LOGAN SQUARE
ALUMINUM. Defendant BOKOR advised Plaintiff that LOUIS' armua1 salary exceeds several
million dollars, far in excess of what Plaintiff was paid during this time period. Plaintiff was
never made aware of LOUIS' compensation each year, nor was he ever consulted or asked to
vote on LOUIS' compensation package although he was a director of LOGAN SQUARE
ALUMINUM throughout the relevant time period.
19. The gross revenues of LOGAN SQUARE ALUMINUM have increased
substantially since 2008. During that time period -- from the Studio 41 locations alone -- the
Company's gross sales revenues increased from approximately $30,000,000 in 2008 to in excess
of $110,000,000 in 2016. Despite this significant increase in revenue, Plaintiff failed to receive
dividends in any of these years but one. Plaintiff was never consulted on whether dividends
should be declared, nor was he advised why the Company failed to declare them. Nor was
Plaintiff otherwise consulted on the Company's day-to-day business operations or its long-range
plarming, despite his director and officer status
20. The events leading up to Plaintiffs tennination are as follows. On or about April
19, 2017, LOUIS - through Defendant SANFORD BOKOR -- offered to purchase Plaintiffs
6
stock in LOGAN SQUARE ALUMINUM for a small fraction of its value ($4,000,000 purchase
price financed over time). At about the same time or shortly before, Plaintiff was asked to sign
(and did sign) a written consent to make LOUIS' wife, Robyn Silver, a director of the Company,
effective May 12,2017.
21. At or about the time of the offer, Plaintiff asked to see the corporate books and
records, including the Company's profit and loss statements, corporate tax returns, executive
payroll information, business bank statements and business leases. Defendant BOKOR said that
he had to ask LOUIS about making the books and records available to Plaintiff. Plaintiff
reiterated his request for books and records in writing on April 18 or 19, 20 17. Within a day or
two of that second request, the offer

. to purchase was withdrawn. None of the books and
. records
requested were ever provided, notwithstanding Plaintiffs right to see them. Then, on April 25,
2017, LOUIS abruptly terminated Plaintiffs employment with LOGAN SQUARE
ALUMINUM.
22. On May 11, 2017, Plaintiff in writing revoked his prior consent to make LOUIS'
wife Robyn a director of the Company. The following day, Plaintiff was notified that his health
insurance and company credit card was cancelled by the Company. The cancellation of
Plaintiffs health insurance is particularly problematic in light of his age (65), his medical history
-- including pre-existing and continuing cardiac and other serious health conditions - and the
dependents insured through the Plaintiff.
23. LOUIS also then advised Plaintiff that LOGAN SQUARE ALUMINUM would
not continue to pay the premiums for a $10,000,000 life insurance policy in which Plaintiff is the
named insured for the benefit of his three children. Years ago, LOGAN SQUARE ALUMINUM
purchased three life insurance policies with death benefits of $10,000,000 each (one policy for
7
each of the children of Isaac and Lisa Silver) in which LOUIS, Betty and Plaintiff were the
named insureds. These policies were designed to pay estate taxes on behalf of the insureds
related to their ownership in the Company, with the balance to be paid to their heirs. Again, all
of these actions on LOUIS' part were unilateral and in derogation of Plaintiff's rights as a
director of the Company.
24. Plaintiff is informed and believes that from the time these life insurance policies
were purchased, LOGAN SQUARE ALUMINUM paid all premiums to keep these policies in
good standing. If the Company does not continue to pay the premiums for Plaintiff's life
insurance, that insurance will lapse, since Plaintiff cannot afford to pay the premiums (estimated
at $31,000 semi-annually). The loss of this policy would cause irreparable harm to Plaintiff and
his family.
25. In contrast to how LOUIS has treated Plaintiff and the Trust Beneficiaries since
2008, during the same time period, LOUIS more than quadrupled his salary from LOGAN
SQUARE ALUMINUM, has usurped corporate opportunities in real estate and other holdings
for his own benefit and has increasingly involved his wife and children in LOGAN SQUARE
ALUMINUM's business to unjustly enrich himself and to the detriment of Plaintiff and the Trust
Beneficiaries. Again, as a director of the Company, Plaintiff was never consulted or asked to
vote of LOUIS' compensation or the acts of self-dealing that constituted breaches of his
fiduciary duties to the Companies.
26. As a shareholder of LOGAN SQUARE ALUMINUM, Plaintiff has the right to
examine the books and records of the Company pursuant to the Illinois Business Corporation
Act, 805 ILCS 5/7.75. Defendants have denied him tl1at right under the circumstances stated.
8
27. Plaintiff is further entitled to receive material information about the Companies'
business and financial information because of his potential liability as a director of LOGAN
SQUARE ALUMINUM and SILVER REAL ESTATE MANAGEMENT. On that basis, too,
the actions of Defendants, and each of them, in failing and refusing to disclose such information
and make the Companies' books and records and material financial information available to
Plaintiff unlawfully exposes him to actual and potential liabilities in his capacity as a director of
the Companies.
28. The Illinois Business Corporation Act further provides that a court may dissolve a
an Illinois non-public corporation, or provide other remedies to non-controlling shareholders,
upon a finding that the "directors or those in control of the corporation have acted, are acting, or
will act in a manner that is illegal, oppressive, or fraudulent with respect to the petitioning
shareholder whether in his or her capacity as a shareholder, director, or officer." 805 ILCS
5/12.56(a)(3).
29. Illinois law also imposes fiduciary duties upon shareholders in a closely-
held corporation which further limits the prerogatives of control and provides corresponding
protection for those, like Plaintiff, who are not in control. See 805 ILCS 517.
30. To further protect protection for non-controlling shareholders, the Illinois
Business Corporation Act recognizes the possibility of oppression by "directors or those in
control of the corporation." 805 ILCS 5/12.56(a)(3). As more specifically, set forth below,
LOUIS' acts are oppressive under Illinois law as to Plaintiff and other directors and shareholders
of LOGAN SQUARE ALUMINUM and SILVER REAL ESTATE MANAGEMENT.
LOUIS' Seizure a( Corporate Opportunitv, Sel(-Dealing and Unlawful Use o(Corporate Assets
9
31. On infonnation and belief, beginning in 2013, LOUIS diverted to himself
valuable opportunities to purchase certain properties which should have been made available to
the Companies. Plaintiff is informed and believes that until 2013, all real estate purchased for
Studio 41 locations was purchased by LOGAN SQUARE ALUMINUM and/or SILVER REAL
ESTATE MANAGEMENT.
32. Specifically, in June 2013, in breach of his fiducia1y duties to the Company.
LOUIS obtained a mortgage in the amount of $2,450,000 from Private Bank as "manager" of
Silver-Hubbard, LLC to purchase the lower level and first floor of property located at 225 W.
Hubbard in Chicago, Illinois. Plaintiff was not made aware of the formation of a company by
the name of Silver-Hubbard, LLC.
33. LOUIS told Plaintiff that LOGAN SQUARE ALUMINUM couldn't afford to
purchase the premises located at 225 W. Hubbard in Chicago, Illinois, but that he was able to do
so. In connection with this and other transactions enumerated herein and others of which
Plaintiff may be unaware, LOUIS engaged in self-dealing, usurped or seized corporate
opportunities, and had a direct conflict of interest with the interests of Plaintiff and the
Companies. Indeed, LOUIS -by these and other actions set forth herein -- repeatedly breached
his duty to further the Company's interest over his own.
34. LOGAN SQUARE ALUMINUM d/b/a Studio 41 is a tenant of225 W. Hubbard,
Chicago, Illinois. Plaintiff was never advised of the terms and conditions of the lease between
Silver-Hubbard, LLC and LOGAN SQUARE ALUMINUM d/b/a Studio 41.
35. In August 2013, it was publicly announced that LOUIS along with two other
pminers - Aaron Paris and Paul Fishbein - purchased the fom1er Marshall Field's/Macy's
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warehouse located at 4000 W. Diversey, Chicago, Illinois, which again - according to public
accounts- was slated for mixed-use development with Studio 41 as one of its major tenants.
36. The opportunity to purchase the prope1iy at 4000 W. Diversey was first presented
to LOGAN SQUARE ALUMINUM. LOUIS told the investors who approached him that the
Company could not afford the deal but that he could do so, breaching his fiduciary duty to place
the Company's interests above his own. As a director of the Company, Plaintiff was never
consulted about this deal. Nor was he advised or consulted about the terms and conditions of
LOGAN SQUARE ALUMINUM d/b/a Studio 41's lease of the premises at 4000 W. Diversey.
37. On December 26, 2013, LOGAN SQUARE ALUMINUM obtained a mmigage in
the amount of $26,513,499.92 from the Private Bank for multiple properties. That mortgage was
signed by LOUIS as President of LOGAN SQUARE ALUMINUM, President of SILVER REAL
ESTATE MANAGEMENT, President of Silver-Touhy, LLC, and as President of 2470 N.
Milwaukee Corporation.
38. LOUIS instructed Plaintiff to sign the Private Bank mortgage and was told that
the mortgage monies ($26,513,499.92) was a necessary loan "to keep the Company going."
LOUIS never shared the loan paperwork with Plaintiff, nor does Plaintiff know the capacity in
which he signed that paperwork on behalf of the Companies. Plaintiff signed the paperwork at
the time based on his brother's representations because he trusted him. Subsequent events have
caused him to question this loan and other enumerated actions on LOUIS' part.
39. Plaintiff is unaware of any major purchases of realty on the part of LOGAN
SQUARE ALUMINUM or SILVER REAL ESTATE MANAGEMENT during the 2013 time
frame to require a purchase in the aforesaid amount. As a director and shareholder of these
Companies, he should have been consulted and informed regarding any such purchase and its
11
terms. Plaintiff now believes that at least a portion, if not all, of that mortgage was used in the
development of property for LOUIS' personal benefit or account or that the Companies' assets
were pledged to cover property purchased for LOUIS' personal benefit.
40. Subsequently, a Studio 41 location was opened in Scottsdale, Arizona. The plans
to open that location were never discussed with Plaintiff as an officer, director and shareholder of
LOGAN SQUARE ALUMINUM. Similarly, no information was provided to Plaintiff, nor was
he ever consulted about the potential to open a Florida Studio 41 location. Plaintiff learned of
such plans from employees of LOGAN SQUARE ALUMINUM and not from LOUIS.
LOUIS' Acts of Oppression
41. At least since 2008 or 2009, LOUIS has failed to call or hold shareholder or
director meetings. To the extent Plaintiff signed any minutes for such "meetings", he was
inshucted to do so in blank
42. Around the same time period, Defendant ROBERT M. KNABE told Plaintiff that
LOUIS was in control of the Companies and that LOUIS could fire him at any time.
43. Plaintiff is informed and believes that LOUIS' failure to call shareholder and
director meetings during the relevant time period was designed to conceal his secret dealings
with LOGAN SQUARE ALUMINUM and SILVER REAL ESTATE MANAGEMENT
including, without limitation: his misuse of corporate assets for his own benefit to the detriment
of the Companies and their minority shareholders; his act of syphoning a disproportionate share
of profits to pay himself excessive compensation and not declaring dividends for the benefit of
Plaintiff and Trust Beneficiaries; his failure and refusal to provide Plaintiff with material
financial information about the Companies or to show him the Companies' books and records;
his failure to discuss Company business with Plaintiff as a shareholder and director of the
12
Companies; and his actions in usurping corporate oppmiunities and other acts of self-dealing
referenced above-- all in breach of his duties of loyalty, candor and good faith to the Companies
and in violation of the Illinois Business Corporation Act.
44. Also since 2008, LOUIS has engaged in the following actions, among others, to
Plaintiff's detriment: (a) he diminished Plaintiff's duties and responsibilities in LOGAN
SQUARE ALUMINUM and ultimately tenninated Plaintiff as an employee of that Company, (b)
marginalized Plaintiff, (c) failed and refused to consult with Plaintiff or to otherwise provide him
with critical information regarding the assets, liabilities, profitability and value of LOGAN
SQUARE ALUMINUM and SILVER REAL ESTATE MANAGEMENT, (d) failed and refused
to provide Plaintiff with information about real estate acquisitions for new Studio 41 locations
and, on information and belief, purchased some of those locations with his own funds alone or
with others outside the Companies and then leased that prope1iy, in whole or in part, back to
LOGAN SQUARE ALUMINUM d/b/a Studio 41 for his own account or personal benefit, (e)
demanded that Plaintiff personally put $2,000,000 in escrow either to satisfy or as collateral for
undisclosed corporate debt (in response to which Plaintiff placed $255,000 in escrow with
Private Bank), (f) denied Plaintiff the ability to inspect the books and records of either Company
and otherwise failed to disclose to Plaintiff material financial infonnation about the Companies.
45. Most recently, LOUIS has orchestrated and implemented a scheme to squeeze out
Plaintiff, to wrongfully usurp Plaintiffs' ownership interest in LOGAN SQUARE ALUMINUM
and SILVER REAL ESTATE MANAGEMENT, and to compel Plaintiff to relinquish his shares
in either or both of these Companies for a fraction of their fair value. As part of this scheme,
LOUIS tem1inated Plaintiff's employment with LOGAN SQUARE ALUMINUM - his only
source of income - when Plaintiff lawfully requested to see the corporate books and records,
13
including profit and loss statements and corporate tax returns, and thereafter terminated
Plaintiffs health insurance when Plaintiff revoked his consent to make LOUIS' wife, Robyn
Silver, a director of LOGAN SQUARE ALUMNUM before the effective date of the consent.
46. These actions on LOUIS' part in usurping corporate opportunities and self-
dealing, in terminating Plaintiffs salary and health insurance, in denying Plaintiff critical
information about the companies in which he is a shareholder, director and officer, and in
threatening Plaintiff with the loss of his life insurance policy has caused, and will continue to
cause, Plaintiff irreparable harm for which there is no adequate remedy at law.
Aiding and Abetting LOUIS' Breaches o(Fiduciarv Duties
47. Defendants SANFORD BOKOR and ROBERT M. KNABE, the Company's
accountant and lawyer, respectively, have endorsed LOUIS' plans to treat LOGAN SQUARE
AUMINUM and SILVER REAL ESTATE MANAGEMENT as his own Companies to the
detriment of Plaintiff and the Trust Beneficiaries and have thereby aided and abetted in LOUIS'
plans of self-dealing to treat the Companies as his own - when they are not, to usurp corporate
opportunities and to squeeze Plaintiff out of the Companies for a fraction of their fair value.
48. Defendants BOKOR and KNABE also unlawfully failed or refused to provide
Plaintiff access to corporate books and records and other critical financial information regarding
LOGAN SQUARE AUMINUM and SILVER REAL ESTATE MANAGEMENT, knowing that
Plaintiff was entitled to receive such infonnation.
49. Defendants BOKOR and KNABE, through their actions, exemplify their total
loyally to LOUIS and their aiding and abetting his breaches of fiduciary duties to Plaintiff, the
Tmst Beneficiaries and the Company.
14
50. On information and belief, botb BOKOR and KNABE knew of the following
actions on LOUIS' part among other: his self-dealing and conduct designed to usurp corporate
opportunities for his personal benefit, paying himself excessive compensation, and not paying
dividends to Plaintiff and the Trust Beneficiaries. Despite these actions about which BOKOR
and KNABE knew or should have known, they did nothing to stop LOUIS or to advise Plaintiff
of his actions, and ignored clear conflicts of interest on each of their parts.
51. Both KNABE and BOKOR were also involved in LOUIS' scheme to squeeze
Plaintiff out of LOGAN SQUARE ALUMINUM and SILVER REAL ESTATE
MANAGEMENT and to buy Plaintiff out of one or both of these Companies for a fraction of
their fair value.
LOUIS' Ubridled Control and Demand Futility
52. Plaintiff brings this action, in part, pursuant to 805 ILCS 5/7.80 derivatively and
for the benefit of LOGAN SQUARE ALUMINUM and SILVER REAL ESTATE
MANAGEMENT to redress injuries suffered, and to be suffered, by these Companies as a direct
result of the self-dealing and other breaches of fiduciary duties, abuse of control and unjust
enrichment as well as aiding and abetting on the part of the Defendants.
53. LOGAN SQUARE ALUMINUM and SILVER REAL ESTATE
MANAGEMENT, and their affiliates, are named as nominal Defendants solely in a derivative
capacity.
54. This is not a collusive action to confer jurisdiction on this Court that it would not
othe1wise have.
15
55. Plaintiff will adequately and fairly represent the interests of the Companies in
enforcing and prosecuting his rights and has been a shareholder of LOGAN SQUARE
ALUMINUM and SILVER REAL ESTATE MANAGEMENT at all times relevant herein.
56. Plaintiff has not been allowed to participate in any decisions despite his title as
"director" of LOGAN SQUARE ALUMINUM. As his last official act, he revoked his written
consent to make LOUIS' wife, Robyn Silver, as a director of that Company before the effective
date of that consent. Plaintiff was told that he lost his health insurance benefits immediately
thereafter.
57. Plaintiff does not know who currently serves on the Board of Directors of
LOGAN SQUARE ALUMINUM nor does he know who serves on the Board of SILVER REAL
ESTATE MANAGEMENT.
58. As previously stated, the Board of LOGAN SQUARE ALUMINUM has not held
any meetings since 2008 or 2009. During this time period, LOUIS has effectively functioned as
the sole director of LOGAN SQUARE ALUMINUM and SILVER REAL ESTATE
MANAGEMENT.
59. LOUIS is not disinterested or independent for reasons set forth herein.
60. Pursuant to his specific duty as a Board member of the Companies, LOUIS was
charged with the management of LOGAN SQUARE ALUMINUM and SILVER REAL
ESTATE MANAGEMENT and to conduct their business affairs for the benefit of each of these
Companies and their shareholders.
61. LOUIS breached the fiduciary duties that he owed to the Companies and their
shareholders in that he, together with the other Defendants, accomplished their conspiracy,
16
.'
common enterprise and/or common course of conduct by acting in concert with LOUIS and
enabling him to consummate the unlawful transactions alleged herein.
62. Because of their inter-related business, professional and personal relationships,
Defendants have developed debilitating conflicts of interest that prevent the sole de facto Board
member of the Companies from taking the necessary and proper actions on behalf of the
Companies, as requested herein.
63. In order to bring this suit, LOUIS would be forced to sue Defendants with whom
he has extensive business, professional and personal entanglements, which he will not do,
thereby excusing demand.
64. The demand is further excused because LOUIS knew of and/or directly benefitted
from the wrongdoings complained of herein. Thus, based on LOUIS' control of LOGAN
SQUARE ALUMINUM and SILVER REAL ESTATE MANAGEMENT in his capacities as
President and his controlling interests in each of these Companies and their respective Boards of
Directors, any demand on either Company to stop the conduct complained of herein would be
futile and necessarily require LOUIS to review his own conduct motivated by self-dealing and by
a desire to divest Plaintiff's interest in one or both of the Companies to his detriment.
65. Moreover, the acts complained of constitute violations of the fiduciary duties
owed by the Companies' officers, director and attomeys. Under these circumstances, Defendants'
acts are legally incapable of ratification.
66. LOGAN SQUARE ALUMINUM and SILVER REAL ESTATE
MANAGEMENT have been, and will continue to be, exposed to significant losses due to the
wrongdoing complained of herein, yet Defendants, and LOUIS as the cutTent de facto sole Board
member of both Companies, have not filed any lawsuits against themselves or others who were
17
responsible for that wrongful conduct to attempt to recover for the Companies any part of the
damages that LOGAN SQUARE ALUMINUM and SILVER REAL ESTATE MANAGEMENT
suffered and will suffer thereby.
67. Under all of these circumstances, any demand by Plaintiff that LOGAN SQUARE
ALUMINUM and/or SILVER REAL ESTATE MANAGEMENT take action against Defendants
is futile.
68. As a direct and proximate result of the individual Defendants' misconduct,
oppressiOn, breaches of fiduciary duties and aiding and abetting, LOGAN SQUARE
ALUMINUM and SILVER REAL ESTATE MANAGEMENT, and each of them, have
sustained- and continue to sustain -- significant damages.
69. As a direct and proximate result of the individual Defendants' misconduct,
oppression, breaches of fiduciary duties and aiding and abetting as alleged herein, the individual
Defendants are liable to LOGAN SQUARE ALUMINUM and SILVER REAL ESTATE
MANAGEMENT.
70. To redress Defendants' actions, LOGAN SQUARE ALUMINUM and SILVER
REAL ESTATE MANAGEMENT are without an adequate remedy at law.
COUNT I
SHAREHOLDERS' DERIVATIVE ACTION
(Against All Individual Defendants and the Nominal Defendants)
71. Plaintiff re-alleges and incorporates by reference Paragraphs I through 70 above,
as though fully set forth herein.
72. Plaintiff brings this action pursuant to 735 ILCS 5/2-209(a)(l) and (2) and 805
ILCS 5/7.80, as a shareholders' derivative action on behalf of the Companies against Defendants,
18
seeking to remedy Defendants' oppression of Plaintiff and breaches of their fiduciary duties, self-
dealing, abuses of control, unjust enrichment and aiding and abetting through LOGAN SQUARE
ALUMINUM and SILVER REAL ESTATE MANAGEMENT.
73. Section 12.56 of the Illinois Business Corporation Act, 805 ILCS 51!2.56(A)(3)-
(4), provides, in pertinent part:
12.56. Shareholder remedies: non-public corporations.

(a) In an action by a shareholder in a corporation that has no shares listed on a
national securities exchange or regularly traded in a market maintained by one or
more members of a national or affiliated securities association, the Circuit Court
may order one or more of the remedies listed in subsection (b) if it is established
that: ...
(3) The directors or those in control of the corporation have acted, are acting, or
will act in a manner that is illegal, oppressive, or fraudulent with respect to the
petitioning shareholder whether in his or her capacity as a shareholder, director, or
officer; or
(4) The corporation assets are being misapplied or wasted.
74. LOUIS, individually and as the de facto sole director of the Companies, and the
remaining Defendants, by their direct assistance and acquiescence in LOUIS' actions, are in
control of the Company and have acted, are acting, and will continue to act, in a manner that is
illegal, oppressive, or fraudulent with respect to LOGAN SQUARE ALUMINUM and SILVER
REAL ESTATE MANAGEMENT and the Plaintiff, as specifically set forth herein.
75. As a direct and proximate result of the individual Defendants' unlawful conduct
and actions as alleged herein, LOGAN SQUARE ALUMINUM and SILVER REAL ESTATE
MANAGEMENT have sustained- and continue to sustain-- significant damages.
76. Plaintiff and the Companies have no adequate remedy at Jaw.
19
WHEREFORE, Plaintiff demands judgment as follows against Defendants LOUIS
SILVER, SANFORD BOKOR and ROBERT M. KNABE and in favor of Plaintiff and LOGAN
SQUARE ALUMINUM and SILVER REAL ESTATE MANAGEMENT:
A. For extraordinary equitable and/or injunctive relief as permitted by Jaw, equity and
state statutory provisions sued hereunder including Section 12.56 of the Business Corporation
Act, 805 ILCS 5/12.56, including the imposition of punitive damages and the forfeiture of all
excessive compensation paid to LOUIS, and repayment of all unjust enrichments and attorneys'
and accountant fees that the Companies paid to Defendants KNABE and BOKOR;
B. For restitution to the Companies from Defendants, and each of them, and ordering
disgorgement of all profits, benefits and other unlawful compensation obtained by such
Defendants, and that a constructive trust be established for such purpose;
C. For Plaintiffs costs and disbursements of this action, including his reasonable
attorneys' fees, accountants' and experts' fees, costs, and expenses; and
D. For such other and further relief as the Court deems equitable and just.
COUNT II
BREACH OF FIDUCIARY DUTY
(Against LOUIS SILVER)
77. Plaintiff re-alleges and incorporates paragraphs 1-76 above, as though fully set
forth herein.
78. As a shareholder, director and officer of LOGAN SQUARE ALUMINUM and
SILVER REAL ESTATE MANAGEMENT, LOUIS owed fiduciary duties of loyalty, honesty,
good faith, and due care, and was required to act in the best interest of said Companies and their
shareholders.
20
79. LOUIS breached his fiduciary duties to LOGAN ALUMINUM and SILVER REL
ESTATE MANAGEMENT and Plaintiff by engaging in the following actions, among others, for
his benefit and to the detriment of these Companies and the Plaintiff: (a) diminishing Plaintiffs
duties and responsibilities in LOGAN SQUARE ALUMINUM and ultimately terminating
Plaintiff as an employee of that Company and thereby placing Plaintiff at risk without wages or
health insurance, (b) marginalizing Plaintiff, (c) failing and refusing to consult with Plaintiff or
to otherwise provide him with critical information regarding the assets, liabilities, profitability
and value of LOGAN SQUARE ALUMINUM and SILVER REAL ESTATE MANAGEMENT,
(d) failing and refusing to provide Plaintiff with information about real estate acquisitions for
new Studio 41 locations and, on information and belief, purchasing some of those locations with
his own funds alone or with others outside the Companies and then leasing that property, in
whole or in part, back to LOGAN SQUARE ALUMINUM d/b/a Studio 41 for his own account
or personal benefit, (e) otherwise engaging in self-dealing and paying himself excessive
compensation while not paying dividends to Plaintiff, (f) pledging assets of the Company or
otherwise incurring corporate debt for his own benefit to the detriment of the Companies and
their shareholders, (g) demanding that Plaintiff personally place $2,000,000 in escrow either to
satisfy or as collateral for undisclosed corporate debt (in response to which Plaintiff placed
$255,00 in escrow with Private Bank), (h) denying Plaintiff the ability to inspect the books and
records of either Company and othetwise failing to disclose to Plaintiff material information
about the Companies' financial picture, and (i) perfom1ing, allowing, or aiding and abetting other
acts of waste, misuse, and self-dealing involving the Companies' assets.
80. LOUIS' actions were in bad faith, dishonest and in his own self-interest. Such
actions demonstrated conscious indifference to the consequences to LOGAN SQUARE
21
ALUMINUM and SILVER REAL ESTATE MANAGEMENT and their shareholders, and with
reckless indifference to, and in willful and wanton disregard for the rights of the Companies and
their shareholders.
81. As a result of LOUIS' breaches of fiduciary duties, LOGAN SQUARE
ALUMINUM and SILVER REAL ESTATE MANAGEMENT and their shareholder have
sustained -- and will continue to sustain -- substantial damages for which there is no adequate
remedy at law.
WHEREFORE, Plaintiff prays for judgment in his favor and against Defendant LOUIS
SILVER:
A. For actual and compensatory damages suffered by Plaintiff and the Companies as
a result of LOUIS' wrongful conduct in an amount far in excess of$50,000;
B. After a showing of entitlement to punitive damages and after any hearing required
by applicable law and a showing based on evidence of entitlement, a judgment against LOUIS
and in favor of Plaintiff for punitive damages;
C. Imposing a constructive trust in favor of Plaintiff on all rights, benefits, money,
property, and mortgage interests inuring to LOUIS as a result of his wrongful actions up to the
full amount of the injury and harm to Plaintiff and the Companies caused by Defendants;
D. Declaring that all documents that LOUIS wrongfully executed to incur debt on
behalf of LOGAN SQUARE ALUMINUM and SILVER REAL ESATE MANAGEMENT, and
each of them, and their shareholders, are null and void and cancelled;
E. Declaring that all leases executed on behalf of LOGAN SQUARE ALUMINUM
cl/b/a Studio 41 at above market rates because of the lack of am1's length negotiations between
22
said Company and Defendants be reduced to rentals at or below market rates for the balance of
the lease terms;
F. Award Plaintiff his attorney's fees and costs; and
G. For such other and further relief as this Court deems equitable and just.
COUNT III
AIDING AND ABETTING
(Against Defendants SANFORD BOKOR and ROBERT M. KNABE)
82. Plaintiffre-alleges and incorporates by reference Paragraphs 1 through 81 above,
as if fully set fotih herein.
83. A lawyer who assists management in conduct that breaches managers' fiduciary
duties to constituents is liable to the constituents for aiding and abetting the management breach.
84. In Illinois, a lawyer is subject to liability for aiding and abetting if he or she: (a)
does a tortious act in concert with the other or pursuant to a common design with him, or (b)
knows that the other's conduct constitutes a breach of duty and gives substantial assistance or
encouragement to the other so to conduct himself, or (e) gives substantial assistance to the other
in accomplishing a tortious result and his own conduct, separately considered, constitutes a
breach of duty to the third person.
85. Defendant KNABE, as counsel to LOGAN SQUARE ALUMINUM and SILVER
REAL ESTATE MANAGEMENT, owed a fiduciary duty to the Companies and their
shareholders including Plaintiff, and aided and abetted LOUIS by knowingly and substantially
assisting LOUIS in breaching his fiduciary duties, by counseling with LOUIS about, inter alia,
his misuse of corporate assets for his own benefit and usurping corporate opportunities for his
own benefit, which was in essence a sanctioning of LOUIS' unlawful conduct, without
23
disclosing all of the breaches of fiduciary duty to Plaintiff of which KNABE became aware of in
his private conversations with LOUIS.
86. Defendant KNABE knew, or certainly should have known as a result of his standing
in the legal community, that LOUIS' acts of self-dealing and misconduct constituted a breach of
duty to the Plaintiff and to LOGAN SQUARE ALUMINUM and SILVER REAL ESTATE
MANAGEMENT.
87. Defendant KNABE knew, or certainly should have known as a result of his
standing in the legal community, that a conflict of interest existed in his representation of
LOUIS, on the one hand, and his representation of LOGAN SQUARE ALUMINUM and
SILVER REAL ESTATE MANAGEMENT and their shareholders, including Plaintiff, on the
other.
88. On information and belief, KNABE as a result of his acceptance of legal fees
from the Companies, gave substantial assistance and encouragement to LOUIS in accomplishing
the tortious result on the Plaintiff.
89. Defendant BOKOR has, likewise, aided and abetted LOUIS in the commission of
his unlawful acts by engaging in the following acts, among others: preparing tax returns,
financial statements and loan documents and other financial infom1ation for LOGAN SQUARE
ALUMINUM and SILVER REAL ESTATE MANAGEMENT, knowing of LOUIS' self-
dealing; in failing and refusing to provide such documents and infom1ation to Plaintiff, knowing
Plaintiffs status as a shareholder and officer of each of the Companies; failing to share executive
compensation with Plaintiff upon his request; and in assisting LOUIS to make an offer to buy
Plaintiff out of the Companies at a fraction of fair value, and communicating that offer to
Plaintiff on LOUIS' behalf.
24
90. On infonnation and belief, BOKOR as a result of his acceptance of accounting
fees from the Companies, gave substantial assistance and encouragement to LOUIS in
accomplishing the tortious result on the Plaintiff.
WHEREFORE, Plaintiff prays for judgment m his favor and against Defendants
SANFORD BOKOR and ROBERT M. KNABE:
A. For actual and compensatory damages suffered by Plaintiff and the Companies as
a result of the wrongful conduct of each of them in an amount far in excess of $50,000;
B. For restitution to the Companies and Plaintiff from Defendants, and each of them,
including an order an order that they disgorge all fees, benefits and other unlawful compensation
obtained by such Defendants;
C. For an order precluding Defendants BOKOR and KNABE, and each of them and
their respective firms, from continuing to provide services to LOGAN SQUARE ALUMINUM
and SILVER REAL ESTATE MANAGEMENT, or to invoice said Companies;
D. Award Plaintiff his attorney's fees, expert witness fess and accountant fees and
costs; and
E. For such other and further relief as this Court deems equitable and just.
COUNT IV
UNJUST ENRICHMENT
(Against All Defendants)
91. Plaintiff re-alleges and incorpo'rates by reference and Paragraphs I through 90
above, as though fully set forth herein.
92. By their wrongful acts and omissions, Defendants were unjustly enriched at the
expense of, and to the detTiment of, LOGAN SQUARE ALUMINUM and SILVER REAL
ESTATE MANAGEMENT and the Plaintiff.
25
93. Plaintiff, individually and as a shareholder and representative of the Companies,
Plaintiff seeks restitution from the Defendants, and each of them, and seeks an order of this
Court disgorging all profits, benefits and other compensation obtained by each of these
Defendants, by and through their wrongful conduct and fiduciary breaches.
WHEREFORE, Plaintiffs prays for judgment in his favor and against Defendants LOUIS
SILVER, SANFORD BOKOR and ROBERT M. KNABE:
A. For the amount of damages sustained by Plaintiff and the Companies, and each of
them, as a result of Defendants' breaches of fiduciary duties, waste of corporate assets and unjust
enrichment;
B. Grant restitution from the Defendants, and each of them, and requiring them to
disgorge all profits, benefit, fees and other compensation obtained by each of them through their
wrongful conduct and fiduciary breaches.
C. Award to Plaintiff the costs and disbursements of this action, including reasonable
attorneys' fees, accountants' and experts' fees, costs, and expenses; and
F. Grant such other and further relief as the Court deems equitable and just.
COUNTY
ACCOUNTING
94. Plaintiff re-alleges and incorporates by reference Paragraphs 1 through 93 above,
as if fully set forth herein.
95. As a resnlt of Defendants' breaches of fiduciary duties, aiding and abetting -
including Defendants' failure and refusal to provide Plaintiff with the following financial
infonnation and documents among others -- profit and loss statements, closing documents,
deeds, leases, audited and unaudited financial statements, executive compensation information,
26
corporate tax retums and Joan documents - LOGAN SQUARE ALUMINUM and SILVER
REAL ESTATE MANAGEMENT and the Plaintiff have been damaged - and continue to suffer
damages and injuries- the full extent to which remains unknown.
96. Plaintiff, therefore, demands an accounting to be made to allow the Companies
and their minority shareholder, including the Plaintiff, to ascertain the full amount of damages
and injuries they suffered as a result of Defendants' misconduct as specifically alleged herein.
WHEREFORE, Plaintiff prays for judgment in his favor and against Defendants LOUIS
SILVER, SANFORD BOKOR and ROBERT M. KNABE:
A. Directing all Defendants to account for all damages caused by them and all profits
and special benefits, and other unjust enrichment each of them obtained as a result of their
unlawful conduct including all salaries, bonuses, fees, stock awards, options, monies and other
compensation and imposing a constmctive tmst thereon;
B. Award Plaintiff his attomey's fees and costs; and
C.. For such other and further relief as this Court deems equitable and just.
COUNT VI
INJUNCTION
97. Plaintiff re-alleges and incorporates by reference Paragraphs 1 through 96 above,
as if fully set fotih herein.
98. Plaintiff possesses a clearly ascertainable right or interest which needs protection.
99. Plaintiff has suffered and will continue to suffer irreparable injury or hatm
without protection, as evidenced, in part, by LOUIS' decision to terminate him as an employee
of LOGAN SQUARE ALUMINUM, thereby terminating his only source of wages and health
insurance and by threatening to terminate his life insurance benefits, and by LOUIS failing and
27
refusing to provide Plaintiff with material financial and other information abont the Companies
and their business dealings necessary for Plaintiff to protect his interests in the Companies and to
minimize his liabilities and exposure as a director of each of the Companies.
I 00. Under all of the circumstances herein, Plaintiff has a substantial likelihood of
success on the merits.
101. In the absence of preliminary and permanent injunctive relief, Plaintiff will suffer
greater hann without injunctive relief than the han11 Defendants will suffer if such relief is
imposed.
WHEREFORE, Plaintiff prays for the entry of preliminary and permanent injunctive
relief, without bond, against Defendants LOUIS SILVER and the N aminal Defendants herein:
A. Ordering them to restore Plaintiffs employment, wages and benefits and
enjoining them from failing to pay his life insurance premiums;
B. Enjoining and restraining Defendants, and each of them, from transferring,
assigning, encumbering, concealing, hypothecating, pledging, mortgaging, borrowing against,
dissipating, damaging, destroying, depreciating, selling, withdrawing, making gifts of,
guarantying debts with, purchasing with, expending or otherwise dealing with or disposing of,
any real or personal property or income in which Plaintiff has any interest whatsoever;
C. Prohibiting the Defendants, and each of them, from failing and refusing to hold
a1mual shareholder and director meetings and special meetings, where appropriate, and from
othe1wise refusing to include Plaintiff in management and other business decisions regarding the
Companies' business;
D. Prohibiting the Defendants, and each of them, from failing and refusing to provide
the Companies' shareholders, including Plaintiff, with access to the Companies' books and
28
records, financial statements, tax returns, leases, executive compensation information and other
material financial information;
E. Prohibiting the Defendants, and each of them, from destroying, altering,
tampering or failing to maintain and preserve the Companies' books and records;
F. Prohibiting the Defendants, and each of them, from failing and refusing to declare
dividends and otherwise accurately value the Companies;
G. Prohibiting the Defendants, and each of them, from engaging in oppressive and
intimidating tactics and retaliating against Plaintiff and others for asserting rights and privileges
to which they are entitled and for protecting the assets and benefits of LOGAN SQUARE
ALUMINUM and SILVER REAL ESTATE MANAGEMENT and their shareholders;
H. Enjoining the Defendants, and each of them, from using the Companies' funds to
pay their legal fees and costs in defense of this action; and
I. For snch other and further relief as is necessary to put Plaintiff in the position he
was in before the wrongful conduct of the Defendants.
WHEREFORE, Plaintiff prays for the entry of preliminary and permanent injunctive
relief, without bond, against Defendants ROBERT M. KNABE and SANFORD BOKOR, and
each of them:
A. Enjoining and restraining Defendants KNABE and BOKOR from aiding and
abetting LOUIS in the transfer, assignment, encumbrance, concealment, hypothecation, pledge,
or in mortgaging, borrowing against, dissipation, damage, destruction, depreciation, sale,
withdrawal, making gifts of, guarantying debts with, purchasing with, expending or otherwise
29
dealing with or disposing of, any real or personal property or income in which Plaintiff has any
interest whatsoever;
B. Prohibiting the Defendants KNABE and BOKOR from aiding or abetting LOUIS
or the Nominal Defendants in failing and refusing to hold annual shareholder and director
meetings and special meetings, where appropriate, and from otherwise refusing to include
Plaintiff in management and other business decisions regarding the Companies' business;
C. Prohibiting the Defendants KNABE and BOKOR from aiding and abetting in the
failure and refusal to provide the Companies' shareholders, including Plaintiff, with access to the
Companies' books and records, financial statements, tax returns, leases, executive compensation
information and other material financial infonnation;
D. Prohibiting the Defendants KNABE and BOKOR from aiding and abetting in the
destmction, alteration, tampering or failure to maintain and preserve the Companies' books and
records;
E. Prohibiting the Defendants KNABE and BOKOR from aiding and abetting the
LOUIS in taking excessive compensation for himself or his own account and in failing and
refusing to declare dividends and otherwise accurately value the Companies;
F. Prohibiting the Defendants KNABE and BOKOR from aiding and abetting in
oppressive and intimidating tactics and in retaliating against Plaintiff and others for asserting
rights and privileges to which they are entitled and for protecting the assets and benefits of
LOGAN SQUARE ALUMINUM and SILVER REAL ESTATE MANAGEMENT and their
shareholders;
30
G. Prohibiting and restraining Defendants KNABE and BOKOR, and their respective
finns from, directly or indirectly, invoicing, providing services or referrals to LOGAN SQUARE
ALUMINUM and/or SILVER REAL ESTATE MANAGEMENT or any of their shareholders;
H. Enjoining the Defendants KNABE and BOKOR from using the Companies' funds
to pay their legal fees and costs in defense of this action; and
I. For such other and further relief as is necessary to put Plaintiff in the position he
was in before the wrongful conduct of the Defendants.
NATHAN SILVER, Plaintiff,
By:---:::-'-kwzl~""-'<t::__?_:_:'kV:k~::ld<!(:..__,_--
One of His Atiorneys
Laurie E. Leader
Attorney No. 1598600
565 W. Adams Street- Suite 600
(312) 906-5048
(312) 906-5299 (fax)
lleader@kentlaw. iit edu
Jerald A. Kessler
14047 Petronella Drive-Suite202B
(847) 367-4500
(847) 367-9424 (fax)
jakessler@igc.org
31
VERIFICATION
Under penalties as provided by law, pursuant to Section 1-109 of the Code of Civil
Procedure, the undersigned, NATHAN SILVER, certifies that the statements set forth in the
foregoing Complaint are true and correct, except as to matters therein stated to be on information
and belief, and as to such matters, the undersigned certifies as aforesaid that he verily believes
the same to be true.
Laurie E. Leader
565 W. Adams Street- Suite 600
(312) 906-5048
(312) 906-5299 (fax)
Jerald A. Kessler
Attorney No.1453777
1404 7 Petronella Drive-Suite202B
(847) 367-4500
(847) 367-9424 (fax)
jakessler@igc.org
EXHIBIT B
EXHIBIT C
FILED
1/31/2018 10:20 AM
ERIN CARTWRIGHT WEINSTEIN
Clerk of the Circuit Court
Lake County, Illinois
FILED
1/31/2018 10:20 AM
ERIN CARTWRIGHT WEINSTEIN
Clerk of the Circuit Court
Lake County, Illinois
EXHIBIT D
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171-94 (Rev. 10/11)

EXHIBIT E
IN THE CIRCUIT COURT OF THE NINETEENTH JUDICIAL CIRCUIT
JOSEPH S. SILVER and MICHELLE S. SILVER, as )

independent co-executors of the estate of Nathan Silver,
)
and JOSEPH S. SILVER, MICHELLE S. SILVER, and )
ROCHELLE SILVER, individually and derivatively on )
behalf of LOGAN SQUARE ALUMINUM SUPPLY, )
INC., SILVER REAL ESTATE MANAGEMENT AND )
DEVELOPMENT CORP., 2470 N. MILWAUKEE )
CORP., SILVER DEVELOPMENT, LLC, and )
SILVER-TOUHY, LLC, Illinois corporations, )
)
Plaintiffs, )
)
v. ) No. 17 CH 000729
)
LOUIS SILVER, individually and as Trustee of the )
AMANDA NADINE SILVER TURNER TRUST and the )
ROSLYN RUTH SILVER TURNER TRUST, 4K )
LOGAN SQUARE PARTNERS, LLC, and SILVER- )
HUBBARD, LLC., )
)
Defendants, )
)
And )
)
LOGAN SQUARE ALUMINUM SUPPLY, INC., )
an Illinois corporation, SILVER REAL ESTATE )
MANAGEMENT AND DEVELOPMENT CORP., 2470 )
N. MILWAUKEE CORP., SILVER DEVELOPMENT, )
LLC, and SILVER-TOUHY, LLC, Illinois corporations )
)
VERIFIED AMENDMENT ADDING PARTIES AND COUNTS VII THROUGH XI TO

THE VERIFIED COMPLAINT FOR INJUNCTIVE AND OTHER RELIEF
NOW COME Plaintiffs JOSEPH S. SILVER and MICHELLE S. SILVER, as
independent co-executors of the estate of Nathan Silver, and JOSEPH S. SILVER, MICHELLE
S. SILVER and ROCHELLE SILVER, individually and derivatively, by their attorneys Laurie E.
Leader of the Chicago-Kent Law Offices and Jerald A. Kessler, and for their Verified
1
EXHIBIT A
Amendment Adding Parties and Counts VII Through XI to the Verified complaint for Injunctive
and Other Relief, as follows:
BACKGROUND
1-92. Plaintiffs reallege and incorporate by reference paragraphs 1-92 of the Verified
Complaint for Injunctive and Other Relief which Plaintiff NATHAN SILVER (“NATHAN”)
filed with this Court on May 17, 2017.
93. On January 2, 2018, NATHAN died suddenly. Two of his children, JOSEPH S.
SILVER and MICHELLE S. SILVER, were subsequently appointed independent co-executors of
NATHAN’s estate. NATHAN’s third child – ROCHELLE SILVER (“ROCHELLE”) – is unable
to work and has three children of her own. NATHAN supported ROCHELLE and her three
children until the time of his death.
94. On January 30, 2018, JOSEPH S. SILVER and MICHELLE S. SILVER, as
independent co-executors of the estate of Nathan Silver, were substituted as parties plaintiff.
95. Plaintiffs JOSEPH S. SILVER, MICHELLE S. SILVER and ROCHELLE
SILVER are the sole children and heirs of NATHAN SILVER. Each of them has acquired a
one-third (1/3) interest in his shareholdings in each of the nominal Defendants, specifically:
LOGAN SQUARE ALUMINUM SUPPLY, INC. (“LSA”), SILVER REAL ESTATE
MANAGEMENT AND DEVELOPMENT CORP. (“SREM”), 2740 N. MILWAUKEE CORP.,
SILVER DEVELOPMENT, LLC, and SILVER-TOUHY, LLC.
96. In addition, Plaintiff JOSEPH SILVER is a director in LSA, SREM, and 2470 N.
MILWAUKEE CORP.
97. Since Nathan’s death, his heirs have not received any of the compensation or
benefits which NATHAN received at the time of his death. Defendants abruptly terminated
2
EXHIBIT A
NATHAN’s compensation payments upon NATHAN’s death without seeking relief from the
temporary restraining order entered at the outset of this lawsuit and knowing the hardship the
abrupt cessation of compensation would cause to ROCHELLE and her children. Currently,
NATHAN’s three children together receive a total of only $24,000 in annual dividends from
LSA and no dividends from any of the other nominal Defendants (as defined below).
Significantly, the $24,000 in dividends received is much less than the taxes owed on certain K-1
distributions “received” for which they receive no actual income.
RESTATEMENT OF PARTIES
98. NATHAN SILVER was an officer, director and one-third (1/3) shareholder of
LSA and, until April 25, 2017, was an employee of that Company. NATHAN was also a one-
third (1/3) shareholder, director and officer of SREM, and a one-third (1/3) shareholder interest
in 2740 N. MILWAUKEE CORP., and in SILVER-TOUHY, LLC. Each of the foregoing
corporations are nominal Defendants in this action.
99. SILVER DEVELOPMENT, LLC, is also a nominal Defendant in this matter.
NATHAN and Defendant LOUIS SILVER each owned 12.5 percent of SILVER
DEVELOPMENT, LLC. The remaining 75 percent of SILVER DEVELOPMENT, LLC, is
owned by LSA. Together SILVER DEVELOPMENT, LLC and the other nominal Defendants
identified in Paragraph 99 above are referred to as the “Nominal Defendants” or the
“Companies”).
100. Although Plaintiffs JOSEPH S. SILVER and MICHELLE S. SILVER were
substituted as Plaintiffs on behalf of NATHAN’s estate on January 30, 2018, and continue to,
along with ROCHELLE, each hold one-third (1/3) of their father’s stock in each of the Nominal
3
EXHIBIT A
Defendants, none has been appointed an officer of LSA, SREM, 2740 N. MILWAUKEE CORP.,
SILVER DEVELOPMENT, LLC, and SILVER-TOUHY, LLC.
101. On May 12, 2018, JOSEPH S. SILVER was named as a director of LSA, SREM
and 2470 N. MILWAUKEE CORP., along with Defendant LOUIS SILVER and LSA’s Chief
Financial Officer, Barry Cohodes.
102. Defendant LOUIS SILVER (“LOUIS”) is the President and a director and a one-
third (1/3) shareholder of LSA, SREM, 2740 N. MILWAUKEE CORP. and SILVER-TOUHY,
LLC. He is also a 12.5% owner in SILVER DEVELOPMENT, LLC. LOUIS resides within this
Judicial District at 130 Rue Forest, City of Lake Forest, Lake County, Illinois.
TRUST and the ROSLYN RUTH SILVER TURNER TRUST. On information and belief, the
remaining one-third (1/3) of the shares in LSA, SREM, 2740 N. MILWAUKEE CORP. and
SILVER-TOUHY, LLC., are held in these two trusts for the benefit Amanda Nadine Silver
(“Amanda”) and Roslyn Ruth Silver Turner (“Roslyn”), the children of Bathshevi (“Betty”) Iva
Silver Turner, the deceased sister of NATHAN and LOUIS. Collectively, Amanda and Roslyn
are referred to herein as the “Trust Beneficiaries”).
104. Nominal Defendant LSA is an Illinois corporation – formerly known as Logan
Square Building Material Supply Inc. – with headquarters at 2500 N. Pulaski Road, Chicago,
Illinois. As previously stated, said Defendant has several divisions operating under assumed
Studio 41. All of these are collectively designated to as “LSA” herein, unless otherwise
indicated.
4
EXHIBIT A
105. A portion of LSA’s business, known as “Remodelers Supply Center” and
“ClimateGuard Windows,” operates and sells from a window and door showroom. LSA’s
products also include, without limitation, cabinets and vanities, medicine cabinets and mirrors,
faucets and fixtures, sinks, tubs, soakers and baths, whirlpools, Jacuzzi and airbaths, steam and
sauna systems, shower systems, toilets and bidets, countertops, and tile and flooring products, as
well as kitchen and bath accessories, flooring and ornamental railings and fencing. The Company
distributes and sells these products through its kitchen and bath showrooms operated under the
assumed name of “STUDIO 41”. There are various STUDIO 41 locations in Arizona and
Illinois, including the original showroom located in Highland Park, Lake County, Illinois.
106. SREM and 2740 N. MILWAUKEE CORP. own and/or manage various
properties, including properties in which the STUDIO 41 and other LSA offices, showrooms and
warehouses are located.
107. SILVER DEVELOPMENT, LLC, owns the ground lease to a property commonly
known as Sherman Park Plaza.
108. SILVER-TOUHY, LLC, owns the property located at Cicero and Touhy Avenues
in Lincolnwood, Illinois, which houses a Studio 41 showroom and warehouse.
109. Until 2013 and 2014, when LOUIS purchased a portion of 225 W. Hubbard via
SILVER-HUBBARD, LLC, and a portion of the former Macy’s warehouse property in the name
of 4K LOGAN SQUARE PARTNERS, LLC, all real estate leased to LSA was owned by one of
the Silver family entities in which NATHAN had (and his heirs now have) an interest. Following
these acquisitions, LOUIS (through the referenced entities and, formerly, by 4K Diversey
Partners, LLC) became LSA’s landlord at 225 W. Hubbard and at the former Macy’s warehouse
in Chicago.
5
EXHIBIT A
ADDITIONAL FACTS LEADING UP TO THIS AMENDMENT
110. Since the lawsuit was first filed, two other acquisitions on LOUIS’ part have been
identified as further acts of self-dealing, including LOUIS’ acquisition of that portion of the
Macy’s warehouse leased to LSA (under the guise of 4K Logan Square Partners, LLC) and a
parking lot at 2501 N. Pulaski (under the guise of 2501 N. Pulaski, LLC).
111. On October 18, 2018, Plaintiffs’ counsel learned, for the first time, by reading an
October 2, 2018 article in Crain’s Chicago Business, that LOUIS and his two unrelated partners
(Aaron Paris and Paul Fishbein) sold the former Macy’s warehouse (subsequently renamed “The
Fields”) for an undisclosed price. That sale was effected without notice to the parties, despite
allegations set forth in the Verified Complaint that LOUIS acquired the former Macy’s
warehouse (along with Aaron Paris and Paul Fishbein under the guise of 4K Diversey Partners,
LLC) as an act of self-dealing and in usurpation of corporate opportunities alleged and despite a
temporary restraining order (that remains in existence) prohibiting the Defendants from selling or
transferring real estate during the pendency of this action.
112. As set forth in the Verified Complaint, upon exercising complete control of the
nominal Defendants in 2008 until April 25, 2017, LOUIS increasingly oppressed NATHAN by
and stock interest in, LSA. In April 2017, LOUIS had LSA’s accountant – Sandy Bokor –
convey an offer to NATHAN to buy out his interests in the nominal Defendants and other Silver
family holdings, When NATHAN requested to see the Company’s books and records thereafter,
he was denied access to them, the offer was withdrawn and he was abruptly terminated on April
25, 2017. Similar acts of shareholder oppression have continued against Plaintiffs, as more
specifically set forth below.
6
EXHIBIT A
113. During the same time period that NATHAN’s income was significantly reduced
in the years before his death, LOUIS’ LSA income more than quadrupled. For tax year 2017,
LOUIS’ W-2 withholding alone from LSA exceeded three times NATHAN’s W-2 income from
that Company and was more than NATHAN’s income from all sources (including all real estate
“distributions” from Silver family holdings). This income disparity and related shareholder
oppression has become even more pronounced since NATHAN’’s death.
114. Most recently, this oppression resulted in the Plaintiffs incurring significant tax
liability (in excess of $300,000.00) related to NATHAN’s 2017 tax return based on distributions
“passed through” to NATHAN (and now to his estate) from Defendants LSA, SREM, 2470 N.
MILWAUKEE CORP., SILVER DEVELOPMENT LLC, and SILVER-TOUHY, LLC, but
never received. In all previous tax years, one or more of the Nominal Defendants made a
(seemingly arbitrary) distribution to cover NATHAN’s tax liability related to this passive
income. It stopped doing so in tax year 2017, without notice to NATHAN or his heirs.
115. As a result, as more specifically set forth below, Plaintiffs learned of that liability
– for the first time – when their accountant presented them with NATHAN’s tax return for
signature in early October 2018. They had less than one week to have funds available to pay the
$302,495.00, which included penalties incurred for late payment, because NATHAN and his
heirs assumed – based on past practice and court orders – that NATHAN’s tax liability would
continue to be paid by the Companies through a distribution, and that no additional taxes would
be owed.
116. LOUIS’ previous failure to share corporate books and information with
NATHAN (see Verified Complaint ¶¶ 36, 37, 40, 70, 86) has continued with respect to Plaintiffs
since NATHAN’s death. As a director of LSA, SREM and 2470 N. MILWAUKEE CORP.,
7
EXHIBIT A
JOSEPH S. SILVER requested access to information and records never received in a series of
communications which ended with counsel for the nominal Defendants contacting JOSEPH
directly on October 2, 2018, to place restrictions on the use of any information or documents to
be produced in the future.
117. Since his appointment as a director of Defendants LSA, SREM and 2470 N.
MILWAUKEE CORP. in May 2018, JOSEPH has received no documents or information about
material corporate matters. Nor has he been consulted or asked to vote on significant issues as a
directory of shareholder of the companies. Despite bylaws requiring that LSA and SREM hold
annual meetings in May and June each year, no meeting for either Company was held at that
time or any time since.
118. Despite a significant increase in LSA’s gross receipts between 2008 and the time
of his death, NATHAN failed to receive dividends in any of these years but one. As set forth in
the original Verified Complaint, NATHAN was never consulted or asked to vote on whether
dividends should be declared, nor was he advised why the Company failed to declare them. This
pattern has continued since his death, with his heirs currently receiving only a total of $24,000.00
in annual dividends between them.
COUNT VII
SHAREHOLDERS’ DERIVATIVE ACTION
ON BEHALF OF NATHAN’S HEIRS
119. Plaintiffs reallege and incorporate by reference Paragraphs 1 through 118 above
as if more fully set forth herein.
120. Plaintiffs bring this action pursuant to 735 ILCS 5/2-209(a)(1) and (2) and 805
ILCS 5/7.80, as a shareholders’ derivative action on behalf of the Nominal Defendants against
Defendant LOUIS SILVER, seeking to remedy Defendant’s oppression of Plaintiffs and
8
EXHIBIT A
breaches of their fiduciary duties, self-dealing, abuses of control, and unjust enrichment through
LSA, SREM, 2740 N. MILWAUKEE CORP., SILVER DEVELOPMENT, LLC, and SILVER-
TOUHY, LLC.
121. Section 12.56 of the Illinois Business Corporation Act provides, in pertinent part:

(a) In an action by a shareholder in a corporation that has no shares listed
on a national securities exchange or regularly traded in a market
maintained by one or more members of a national or affiliated securities
association, the Circuit Court may order one or more of the remedies listed
in subsection (b) if it is established that: …(3) The directors or those in
control of the corporation have acted, are acting, or will act in a manner
that is illegal, oppressive, or fraudulent with respect to the petitioning
shareholder whether in his or her capacity as a shareholder, director, or
officer; or (4) The corporation assets are being misapplied or wasted.
122. LOUIS, individually and as the de facto sole director of the Nominal Defendants,
and the Nominal Defendants -- by their direct assistance and acquiescence in LOUIS’ actions --
are in control of said Companies and have acted, are acting, and will continue to act, in a manner
that is illegal, oppressive, or fraudulent with respect to LSA, SREM, 2740 N. MILWAUKEE
CORP., SILVER DEVELOPMENT, LLC, SILVER-TOUHY, LLC, and the Plaintiffs, as
specifically set forth herein.
123. In response to his written request for certain documents and information and for a
directors’ meeting in late August 2018, JOSEPH received an email from Barry Cohodes (LSA’s
CFO and a director of that Company) suggesting that he, JOSEPH, and LOUIS meet informally,
to update JOSEPH on “the various family owned entities” and to discuss “current and
anticipated changes to the business.” In response, JOSEPH renewed his request for documents
before any meeting. He also requested identification of the corporate structure as well as the
compensation paid to executives, directors, and officers.
9
EXHIBIT A
124. In response to JOSEPH’S renewed request, no information was provided. Instead
– as noted above -- counsel for Nominal Defendants LSA and SREM, sent JOSEPH a letter
dated October 2, 2018. Plaintiffs’ counsel was not even copied on the letter.
125. The October 2, 2018, letter conditioned providing documents and information to
JOSEPH S. SILVER under conditions not permitted under the Illinois Business Corporation Act
and contrary to his duties as director. The letter states in part:
“Importantly, all agendas, minutes, and financial information provided to you will be
provided solely in your capacity as a director of, and fiduciary to, the company. As a
fiduciary you are obligated to treat this information as confidential and it is imperative
that you acknowledge and agree to treat this material as confidential and use it
exclusively to further the proper purposes of a board member. To be clear, this does not
include using confidential director information in the litigation you have instituted
against the companies. I am requesting that you sign and return a copy of this letter
confirming your acknowledgement and agreement that any information provided to you
as a director of the company will not be used in the pending litigation, shared with any
third parties, or used for any purpose other than execution of your duties and
responsibilities as a board member of Logan Square Aluminum Supply, Inc., Silver Real
Estate Management and Development Corp., and 2470 North Milwaukee Corp.”
(Emphasis added).
126. Not only is the foregoing in violation of Illinois’ ethical rules, but it is an act of
shareholder oppression and places restrictions on JOSEPH not permitted under the Business
Corporation Act. 805 ILCS 5/7; 805 ILCS 5/12.26. Based on Plaintiffs’ information and belief
and the factual foundation on which this lawsuit is based, JOSEPH may have a fiduciary duty as
director to seek third-party consultations regarding one or more of the Nominal Defendants.
127. As a direct and proximate result of Defendant LOUIS SILVER’s unlawful
conduct and actions as alleged herein, the Nominal Defendants have sustained – and continue to
sustain -- significant damages.
10
EXHIBIT A
128. As shareholders of the Nominal Defendants, Plaintiffs have the right to examine
the books and records of these Companies pursuant to the Illinois Business Corporation Act, 805
ILCS 5/7.75. Defendants have denied them that right under the circumstances stated.
129. JOSEPH is further entitled to receive material information about the business and
financials of LSA, SREM, and 2740 N. MILWAUKEE CORP., because of his position as a
director of these Companies. On this basis, too, the actions of Defendants, and each of them, in
failing and refusing to disclose such information and make these Companies’ books and records
and material financial information available to JOSEPH is unlawful and potentially exposes him
to actual and potential liabilities in his capacity as a director of the Companies.
upon a finding that the “directors or those in control of the corporation have acted, are acting, or
shareholder whether in his or her capacity as a shareholder, director, or officer.” 805
ILCS 5/12.56(a)(3).
protection for those who, like Plaintiffs, are not in control. See 805 ILCS 5/7.
132. To further protect non-controlling shareholders, the Illinois Business Corporation
Act recognizes the possibility of oppression by “directors or those in control of
the corporation.” 805 ILCS 5/12.56(a)(3). As more specifically, set forth below, LOUIS’ acts are
oppressive under Illinois law as to Plaintiffs and to other shareholders of the Nominal
Defendants.
11
EXHIBIT A
133. As previously stated, until 2017, distributions or other payments were made by
the foregoing Companies to cover the income tax arising out of the pass-through income for
NATHAN. Even after NATHAN’s employment was terminated in early 2017, such distributions
were made by one or more of the Nominal Defendants on NATHAN’s behalf to cover his 2016
tax liability.
134. As previously stated, on or about the date that JOSEPH SILVER received
NATHAN’s 2017 state and federal income tax returns (which were on extension). he learned –
for the first time – that the Companies made no distributions or other payments to cover the taxes
on NATHAN’S 2017 pass-through income, which exceeded his W-2 and other income for that
year. However, again, the difference between the W-2 and K-1 income was that neither
NATHAN nor his heirs receive any benefit from the pass-through income, and they were never
given the option of what to do with it or how to treat it for income tax purposes. Under all of
these circumstances, the current practice – if allowed to continue -- posed a huge threat and
continues to pose a threat to the Plaintiffs’ financial well-being.
135. In 2017, NATHAN’s federal return required an additional tax payment of
$273,126 (which included a penalty of $5,558.00) and an additional Illinois income tax payment
of $29,369.00 (including a penalty of $3,965.00). NATHAN’s heirs had to find a total of
$302,495.00 to make the tax payments by the October 15th filing date. As previously stated, one
or more of the Companies previously made distributions to cover NATHAN’s tax liability.
136. Not only did LOUIS SILVER and the Nominal Defendants fail to give Plaintiffs
notice that they had discontinued the practice of covering NATHAN’s income tax liability on the
pass-through income, but – to add insult to injury – NATHAN and the Plaintiffs received no
12
EXHIBIT A
benefit and a significant detriment including, without limitation, tax penalties as a result. Only
LOUIS had the income to benefit from the write-offs that resulted.
137. LOUIS SILVER continues to take excessive compensation of several million
dollars annually to the peril of Plaintiffs and several of the Nominal Defendants.
138. Based on a combined total of $24,000.00 in annual dividends paid to all of the
Plaintiffs collectively, the foregoing practice must be immediately discontinued and a
distribution must be made to cover any tax withholding incurred based on 2018 tax estimations.
A continuance of this practice will result in irreparable harm to Plaintiffs unless their resulting
tax liability is paid by the Companies; otherwise, in return for $8,000.00 per year paid to each of
them, Plaintiffs would have to pay income taxes on hundreds of thousands of dollars of pass-
through income never actually received.
139. The recent significant harm to Plaintiffs in requiring them to pay the $302,495.00
in 2017 taxes and penalties incurred because of Defendants’ failure to maintain the status quo
and cover NATHAN’s income tax liability on the pass-through income is shared by Defendants
jointly and severally.
140. As a direct and proximate result of LOUIS’ unlawful conduct and actions as
alleged herein, LSA, SREM, and 2740 N. MILWAUKEE CORP. have sustained – and continue
to sustain -- significant damages.
141. Plaintiffs and the Nominal Defendants have no adequate remedy at law.
WHEREFORE, Plaintiffs and the Nominal Defendants, and each of them, demand
judgment as follows against Defendant LOUIS and in favor of Plaintiffs, LSA, SREM, 2740 N.
MILWAUKEE CORP., SILVER DEVELOPMENT, LLC and SILVER-TOUHY, LLC:
13
EXHIBIT A
A. For extraordinary equitable and/or injunctive relief as permitted by law, equity and
state statutory provisions sued hereunder including all of the provisions of subsection (a) of
Section 12.56 of the Business Corporation Act, including the imposition of punitive damages and
the forfeiture of all excessive compensation paid to LOUIS, and repayment of all unjust
enrichments and attorneys’ and accountant fees that the Companies paid;
Defendants;
C. For Plaintiffs’ costs and disbursements of the action, including their reasonable
attorneys’ fees, accountants’ and experts’ fees, costs, and expenses; and
COUNT VIII
143. Plaintiffs re-allege and incorporate paragraphs 1–142 above, as though fully set
forth herein.
144. As a shareholder or member, director and officer of the Nominal Defendants,
LOUIS owes fiduciary duties of loyalty, honesty, good faith, and due care, and is required to act
in the best interest of said Companies and their shareholders or members.
145.. LOUIS breached his fiduciary duties to each of the Nominal Defendants and
Plaintiffs by engaging in the following actions, among others, for his benefit and to the detriment
of these Companies and the Plaintiffs (and to NATHAN, before them): (a) diminishing
NATHAN SILVER’s duties and responsibilities in LOGAN SQUARE ALUMINUM and
ultimately terminating him as an employee of that Company and thereby placing Plaintiff at risk
14
EXHIBIT A
without wages or health insurance, and continuing to deprive Plaintiffs of their just compensation
following NATHAN’s death; (b) failing and refusing to share information with Plaintiffs
following NATHAN’S death, (c) failing and refusing to consult with Plaintiffs or to otherwise
provide them with critical information regarding the assets, liabilities, profitability and value of
the Corporate Defendants and subjecting them to tax liability without just compensation to their
benefit, (d) failing and refusing to provide Plaintiffs with information about real estate
acquisitions for new Studio 41 locations and, on information and belief, purchasing some of
those locations with his own funds alone or with others outside of the Nominal Defendants and
then leasing that property, in whole or in part, back to LSA d/b/a Studio 41 for his own account
compensation while not paying distributions or dividends to Plaintiffs or paying them nominal
dividends and/or distributions without regard to their interest in the Companies, (f) on
information and belief, pledging assets of one or more of the Company or otherwise incurring
corporate debt for his own benefit to the detriment of the Companies and their shareholders, (g)
denying Plaintiffs the ability to inspect the books and records of the Companies and otherwise
failing to disclose to Plaintiffs material information about the Companies’ financial picture, and
(h) performing, allowing, or aiding and abetting other acts of waste, misuse, and self-dealing
involving the Companies’ assets.
146. LOUIS’ actions were in bad faith, dishonest and in his own self-interest. Such
actions demonstrated conscious indifference to the consequences to the Nominal Defendants and
their shareholders, and with reckless indifference to, and in willful and wanton disregard for the
rights of said Companies and their shareholders.
15
EXHIBIT A
147. As a result of LOUIS’ breaches of fiduciary duties, the Nominal Defendants and
their shareholders have sustained -- and will continue to sustain -- substantial damages.
WHEREFORE, Plaintiffs pray for judgment in their favor and against Defendant LOUIS
SILVER:
A. For actual and compensatory damages suffered by Plaintiffs and the Companies
as a result of LOUIS’ wrongful conduct in an amount far in excess of $50,000;
and in favor of Plaintiffs for punitive damages;
C. Imposing a constructive trust in favor of Plaintiffs on all rights, benefits, money,
full amount of the injury and harm to Plaintiffs and the Companies caused by Defendants;
behalf of LOGAN SQUARE ALUMINUM, SILVER REAL ESATE MANAGEMENT, 2740 N.
MILWAUKEE CORP., SILVER DEVELOPMENT, LLC, and SILVER-TOUHY, LLC. and
E. Award Plaintiffs their attorney’s fees and costs; and
COUNT IX
UNJUST ENRICHMENT
148. Plaintiffs re-allege and incorporate by reference and Paragraphs 1 through 147
16
EXHIBIT A
149. By their wrongful acts and omissions, Defendant LOUIS SILVER was unjustly
enriched at the expense of, and to the detriment of the Nominal Defendants, LOGAN SQUARE
ALUMINUM, SILVER REAL ESATE MANAGEMENT, 2740 N. MILWAUKEE CORP.,
SILVER DEVELOPMENT, LLC, and SILVER-TOUHY, LLC. and the Plaintiffs.
150. Plaintiffs, individually and as shareholders and representatives of the Nominal
Defendants, seek restitution from LOUIS SILVER and further seek an order of this Court
disgorging all profits, benefits and other compensation obtained by each of these Defendants, by
and through their wrongful conduct and fiduciary breaches.
SILVER:
A. For the amount of damages, including tax liabilities incurred and paid, that were
sustained by Plaintiffs and the Nominal Defendants, and each of them, as a result of Defendant’s
breaches of fiduciary duties, waste of corporate assets and unjust enrichment;
B. Granting restitution from Defendant LOUIS SILVER, and requiring him to
disgorge all profits, benefit, fees and other compensation obtained through his wrongful conduct
and fiduciary breaches.
C. Awarding to Plaintiffs the costs and disbursements of the action, including
reasonable attorneys’ fees, accountants’ and experts’ fees, costs, and expenses; and
F. Granting such other and further relief as the Court deems equitable and just.
COUNT X
ACCOUNTING
151. Plaintiffs re-allege and incorporate by reference Paragraphs 1 through 150 above,
17
EXHIBIT A
152. As a result of Defendant LOUIS SILVER’s breaches of fiduciary duties –
including Defendant’s failure and refusal to provide Plaintiffs with the following financial
information and documents among others – profit and loss statements, closing documents, deeds,
leases, audited and unaudited financial statements, executive compensation information,
corporate tax returns and loan documents – LOGAN SQUARE ALUMINUM, SILVER REAL
ESTATE MANAGEMENT, 2740 N. MILWAUKEE CORP., SILVER DEVELOPMENT, LLC,
and SILVER-TOUHY, LLC, and the Plaintiffs have been damaged – and continue to suffer
damages and injuries – the full extent to which remains unknown.
153. Plaintiffs, therefore, demand an accounting to be made to allow the Companies
and their minority shareholders, including the Plaintiffs, to ascertain the full amount of damages
and injuries they suffered as a result of Defendant’s misconduct as specifically alleged herein.
WHEREFORE, Plaintiffs pray for judgment in their favor and against Defendants, and
each of them:
A. Directing them to account for all damages caused by them and all profits and
special benefits, and other unjust enrichment each of them obtained as a result of their unlawful
conduct including all salaries, bonuses, fees, stock awards, options, monies and other
compensation and imposing a constructive trust thereon;
B. Award Plaintiffs their attorney’s fees and costs; and
C.. For such other and further relief as this Court deems equitable and just.
COUNT XI
INJUNCTION
18
EXHIBIT A
155. Plaintiffs possess a clearly ascertainable right or interest which needs protection.
156. Plaintiffs have suffered and will continue to suffer irreparable injury without
protection, as evidenced, in part, by LOUIS’ decision to terminate NATHAN as an employee of
LOGAN SQUARE ALUMINUM, and thereafter failing and refusing to adequately compensate
his heirs in proportion to their holdings in the Nominal Defendants and to further jeopardize their
interests in said entities as specifically set forth above.
157. Under all of the circumstances herein, Plaintiffs have a substantial likelihood of
158. In the absence of preliminary and permanent injunctive relief, Plaintiffs will
suffer greater harm without injunctive relief than the harm Defendant will suffer if such relief is
imposed.
WHEREFORE, Plaintiffs pray for the entry of preliminary and permanent injunctive
relief against Defendant LOUIS SILVER, enjoining and restraining said Defendant from:
A. Engaging in self-dealing, usurping corporate opportunities and otherwise
breaching their fiduciary duties to LOGAN SQUARE ALUMINUM, SILVER REAL ESTATE
MANAGEMENT, 2740 N. MILWAUKEE CORP., SILVER DEVELOPMENT, LLC, and
SILVER-TOUHY, LLC and their shareholders;
B. Transferring, assigning, encumbering, concealing, hypothecating, pledging,
mortgaging, borrowing against, dissipating, damaging, destroying, depreciating, selling,
withdrawing, making gifts of, guarantying debts with, purchasing with, expending or otherwise
dealing with or disposing of, any real or personal property or income in which Plaintiffs have
any interest whatsoever, including all real estate held, directly or indirectly, by LOUIS SILVER
19
EXHIBIT A
including, without limitation, all real estate held in the name of any of the Nominal Defendants,
SILVER-HUBBARD, LLC and/or 4K LOGAN SQUARE PARTNERS, LLC;
C. Failing and refusing to hold annual shareholder and director meetings and special
meetings, where appropriate;
C. Failing and refusing to provide the Nominal Defendants’ shareholders, including
Plaintiffs, with access to the Companies’ books and records, financial statements, tax returns,
leases, executive compensation information and other material financial information;
D. Failing and refusing to declare dividends or declaring only nominal dividends and
otherwise inaccurately valuing the corporation;
E. Engaging in oppressive and intimidating tactics and retaliating against Plaintiffs
and others for asserting rights and privileges to which they are entitled and for protecting the
assets and benefits of LOGAN SQUARE ALUMINUM, SILVER REAL ESTATE
F. For such other and further relief as is necessary to put Plaintiffs in the position
they would have been in but for the Defendant’s wrongful conduct.
By: /s/ Laurie E. Leader .

One of Plaintiffs’ Attorneys
Laurie E. Leader Jerald A. Kessler

Attorney No. 1598600 Attorney No.1453777
Chicago-Kent Law Offices 14047 Petronella Drive-Suite202B
565 W. Adams Street - Suite 600 Libertyville, Illinois 60048
Chicago, Illinois 60661 (847) 367-4500
(312) 906-5048; (312) 906-5299 (fax) (847) 367-9424 (fax)
lleader@kentlaw.iit.edu jakessler@igc.org
20
EXHIBIT A
EXHIBIT A
EXHIBIT A
EXHIBIT A
EXHIBIT F
IN THE CIRCUIT COURT OF THE NINETEENTH
JUDICIAL CIRCUIT, LAKE COUNTY, ILLINOIS
JOSEPH J. SILVER and MICHELLE S. )

SILVER, as independent co-executors of )
the Estate of NATHAN SILVER, Deceased, )
individually and derivatively on )
behalf of LOGAN SQUARE ALUMINUM )
SUPPLY, INC., and SILVER REAL ESTATE )
MANAGEMENT AND DEVELOPMENT CORP., an )
Illinois corporation, )
)
Plaintiffs, )
) No.
vs. ) 17 CH 729
)
LOUIS SILVER, individually and as )
Trustee of the AMANDA NADINE SILVER )
TURNER TRUST and the ROSLYN RUTH )
SILVER TURNER TRUST, ROBERT M. KNABE, )
and SANFORD BOKOR, )
)
Defendants, )
and )
)
LOGAN SQUARE ALUMINUM SUPPLY, INC., an )
Illinois corporation, and SILVER REAL )
ESTATE MANAGEMENT AND DEVELOPMENT )
CORP., an Illinois corporation, )
)
-------------------------------------- )
REPORT OF PROCEEDINGS had in the hearing
of the above-entitled cause before the HONORABLE
MARGARET A. MARCOUILLER, Judge of said Court, at the
Lake County Building, 18 North County Street,
Courtroom 406, Waukegan, Illinois, on Friday,
November 16, 2018, at the hour of 1:30 o'clock p.m.
Reported by Linda M. Giuseffi, CSR
L&L REPORTING SERVICE, INC.
(847) 623-7580
L and L Reporting Service, Inc.

847-623-7580
c9a3fea5-88b4-47ba-a508-8259ef0ff33e
Page 2 Page 4
APPEARANCES: 1 MR. SCANDAGLIA: We were here at the end of
LAW OFFICE OF JERALD A. KESSLER
14047 Petronella Drive 2 October on plaintiffs' motion to file a TRO, and I
Suite 202B 3 expressed the corporate defendant's view that there
Libertyville, IL 60048
jakessler@igc.org 4 were some statements in the pleading that I thought
lleader@kentlaw.itt.edu 5 were unsubstantiated and could pose a problem for the
BY: MS. LAURIE E. LEADER AND MR. JERALD A. KESSLER
Appeared on behalf of the Plaintiffs; 6 corporation should a lender or a bank or other business
7 associate come upon it.
SCANDAGLIA RYAN, LLP
55 East Monroe Street 8 And we talked about the possibility of
Suite 3440 9 a motion to strike, and I contacted opposing counsel,
Chicago, IL 60603
gscandaglia@scandagliaryan.com 10 and she agreed to substitute a redacted version of that
BY: MR. GREGORY J. SCANDAGLIA 11 pleading; and she has reviewed both the -- and signed
Appeared on behalf of the Defendants,
Logan Square Aluminum Supply and Silver 12 the agreed order you have in front of you and the
Real Estate; 13 proposed redacted replacement. And if it suits the
FREEBORN & PETERS LLP 14 Court, those -- that can be swapped out, and it would
311 South Wacker Drive 15 resolve that issue.
Suite 3000
Chicago, IL 60606 16 THE COURT: Okay. I do need to review the
rkienzler@freeborn.com 17 proposed redactions, but I see there are not too many
BY: MR. RICHARD T. KIENZLER and 18 of them looking very quickly at this.
MR. MICHAEL P. KORNAK 19 It looks like the first one is in
Appeared on behalf of the Defendant,
Louis Silver. 20 Paragraph 17.
21 MR. SCANDAGLIA: Yes, your Honor.
22 THE COURT: Does anybody have a copy of the
L&L REPORTING SERVICE, INC. 23 original for me?
(847) 623-7580 24 MR. SCANDAGLIA: I should have brought one.
Page 3 Page 5
1 THE COURT: All right. Good afternoon. 1 THE COURT: It might be an exhibit. I'm
2 Counsel, please approach on the case of 2 sure I can locate it in the file. We'll go off the
3 Silver vs. Silver, 17 CH 729. 3 record for just a minute.
4 MR. SCANDAGLIA: Good afternoon, your Honor. 4 (Discussion had off the record.)
5 Greg Scandaglia on behalf of the corporate defendants. 5 THE COURT: The Court has reviewed the
6 MR. KIENZLER: Good afternoon. Richard 6 specific proposed redactions, and the Court does have
7 Kienzler on behalf of Louis Silver. 7 an obligation in this particular instance -- it's been
8 MR. KORNAK: Good afternoon. Mike Kornak on 8 made clear by our Supreme Court -- to review proposed
9 behalf of Louis Silver. 9 redactions and proposed filings under seal even where
10 MS. LEADER: Laurie Leader on behalf of the 10 there is an agreement by the parties.
11 plaintiffs. 11 The Court has reviewed -- there are
12 MR. KESSLER: Jerry Kessler on behalf of the 12 only three proposed paragraphs to be redacted here, and
13 plaintiffs. 13 the Court has reviewed what the parties have proposed.
14 THE COURT: All right. We have a number of 14 We also had a very brief discussion off the record
15 motions up this afternoon. 15 regarding one of the paragraphs where the Court has a
16 MR. SCANDAGLIA: We have something even 16 concern.
17 easier, your Honor. We have an agreed order -- 17 So the Court finds -- with respect to
18 THE COURT: Oh, terrific. 18 the redaction in Paragraph 17, I agree with the concern
19 MR. SCANDAGLIA: -- for you to look at. 19 expressed by Mr. Scandaglia that this could -- it could
20 THE COURT: All right. 20 cause competitive harm to his client, and I think the
21 MR. SCANDAGLIA: You might remember what -- 21 redaction of Paragraph 17 will be approved.
22 (Discussion had off the record.) 22 The concern that the Court had was with
23 THE COURT: All right. Go ahead, 23 the redaction to Paragraph 62. There is a theoretical
24 Mr. Scandaglia. 24 statement that ends Paragraph 62, which is, frankly,
2 (Pages 2 to 5)
847-623-7580
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1 not the sort of statement -- because it is so 1 is there was a motion for leave to file an amendment to
2 hypothetical, theoretical -- that would cause competitive 2 the verified complaint -- a verified amendment to the
3 harm. So with respect to 62, the Court will ask that 3 verified complaint yesterday; and counsel has no;
4 counsel write in that last sentence, and that will be 4 objection to the Court granting us leave to file that.
5 fine with your proposed pleading. 5 They just want to set a schedule for answering --
6 Because I do also agree with 63, 6 MR. SCANDAGLIA: Responding.
7 it's -- the argument is not quite as strong as it is on 7 MS. LEADER: -- responding, your Honor.
8 17, but there is enough elucidated in that proposed -- 8 THE COURT: Okay. That's fine. I will give
9 you know, hypothetical that it -- I will approve that 9 you leave to file the amended pleading.
10 as well. 10 I wonder if it doesn't make sense --
11 So I will approve the redactions 11 rather than having one pleading with Counts -- whatever
12 proposed for Paragraphs 17 and 63, not 62, and we can 12 it is -- 1 through 6, along with 7 through whatever,
13 just add to today's order that the redacted pleading 13 can we have one operative pleading, and can you put
14 will be substituted for the prior pleading. But we 14 that together for me in one amended complaint and
15 will add that last statement to Paragraph 62 there, and 15 understanding that the only amendments are to the
16 then with that, I think that does resolve your proposed 16 latter.
17 order. 17 MS. LEADER: The reason we did it the way we
18 MR. SCANDAGLIA: Except Exhibit G. 18 did, your Honor, is we didn't want to lose the
19 MS. LEADER: There is Exhibit G. 19 verification of Nathan.
20 THE COURT: Oh, thank you. Let me take a 20 THE COURT: I see. Okay. That makes sense
21 look at Exhibit G. 21 to me. That makes sense to me. All right. That's
22 MR. SCANDAGLIA: Which is a letter, and it's 22 fine. So we will give -- did I say back on the record?
23 redacted in its entirety, your Honor. 23 THE REPORTER: Yes, your Honor.
24 THE COURT: All right. Let me take a look. 24 THE COURT: I apologize. I have made things
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1 We can go off the record. 1 a little difficult for you this afternoon, Madam Court
2 The reason I wanted to have this is 2 Reporter.
3 because the case law is clear that if any portion of 3 So the motion for leave to file the
4 the -- 4 amended complaint will be granted, and how much time
5 THE REPORTER: We're off, your Honor, 5 would you like to respond?
6 correct? 6 MR. KIENZLER: Judge, could we have 30 days,
7 THE COURT: On right now for a minute, if 7 please?
8 you will. I'm sorry. I wasn't clear. 8 THE COURT: Sure. 30 days to respond is
9 There are portions of this letter that 9 just fine, and then we'll wind up getting you back in
10 I think may be properly filed in the open record and 10 for status in January.
11 portions that need to be redacted. 11 Okay. Good. So those two matters we
12 Let's go off the record for just a 12 can get resolved, and then we have -- we have a number
13 minute and discuss in more detail the different content 13 of discovery motions today.
14 of this letter. So let's go off the record for a 14 MS. LEADER: But I think they -- if I could
15 minute. 15 just --
16 (Discussion had off the record.) 16 THE COURT: Go ahead, please.
17 THE COURT: Back on the record for just a 17 MS. LEADER: -- encapsulate everything,
18 minute. 18 I think they really just revolve around two issues,
19 With respect to Exhibit G, the 19 your Honor, and that is net worth statements and tax
20 attorneys will, during a recess this afternoon, take a 20 returns because everything really revolves around those
21 look at Exhibit G and propose some more limited 21 issues. Whether we're talking about the motion to
22 redactions. All right. 22 quash the subpoena, it's -- it's a little bit broader
23 MS. LEADER: Your Honor, just -- we do have 23 there because then the question is the bank did not
24 one other matter that I think we can agree on, and that 24 file something. So there's that issue.
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1 But in terms of the substantive 1 respect to Mr. Silver, the issues related to the
2 arguments on the motion to quash the subpoena and the 2 subpoena seem to revolve around net worth and tax
3 motion to enforce the subpoena, which are cross 3 returns because the other issues I -- I haven't seen
4 motions, and then the motion to compel, I think those 4 any specific objections. But we'll go through it
5 are the issues that really go to the substance of the 5 however the Court wants to proceed and counsel wants to
6 matters. 6 proceed.
7 MR. KIENZLER: Judge, I don't have any 7 MR. KIENZLER: Well, that's fine, Judge. I
8 problem with what counsel just said. I just -- I do 8 mean, we have a motion for a protective order quashing
9 think it's important to be clear on the record, though, 9 the subpoena that challenges all the subpoena requests
10 that the subpoena to the bank in particular and the 10 that I just went through. So we can talk about them.
11 motion directed at Louis contain a lot of loan-related 11 The only reason I said that, Judge --
12 questions. 12 and just to put it on the record -- is because counsel
13 Now, if they're withdrawing or not 13 said we're here to talk about net worth statements and
14 pressing those expansive requests right now, that's 14 tax returns, which is certainly true. But the rest of
15 fine, but I just want to be clear on the record that, 15 these document requests, although they touch on
16 you know, I'm not going to -- I'm not going to ask them 16 personal financial information, they go much broader
17 to press it. I just want to be clear, you know, 17 than that; and we can get into it, and I'm happy to do
18 because if they're -- I want a clear order coming out 18 that.
19 of this hearing. 19 THE COURT: Yeah. You've kind of grouped
20 THE COURT: Sure. I understand. So 20 your objections.
21 maybe -- I think the first filed motions might have 21 MR. KIENZLER: Yes.
22 been the ones with respect to the subpoena to the bank. 22 THE COURT: And I think the way you did it
23 So shall we start with that? And then we would have a 23 made sense. You've got these categories: Louis's
24 very specific ruling with respect to what requests, if 24 financial information, defendant's loans to entities
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1 any, to the bank are being stricken. 1 not family owned -- I'm sorry -- loans to the entities
2 MR. KIENZLER: And from my perspective, 2 that were not family owned, loans to entities that are
3 Judge -- and counsel can correct me if I'm wrong or if 3 family owned, and then documents evidencing repayment
4 she has a different opinion. But given the sort of lay 4 of the loans.
5 of the land, the order should read, just before we even 5 MR. KIENZLER: Correct.
6 argue, that Subpoena Request Nos. 1, 2, 4, 5, 11, 15 6 THE COURT: I thought those categories made
7 through 21, 3, 9 -- I'm sorry. I'm going out of order 7 a lot of sense, and maybe we can take them in that
8 because I had them grouped by categories, but -- 8 order.
9 THE COURT: That's fine. 9 Does everybody have the subpoena there
10 MR. KIENZLER: 3, 9, 12, and 13 and 6, 7, 10 in front of them?
11 and 8, the motion for protective order would be granted 11 MS. LEADER: No, not yet.
12 as to those, and they'd be removed from the subpoena. 12 THE COURT: Okay. I know there's a lot of
13 THE COURT: And that's entirely? 13 paper here.
14 MS. LEADER: I don't -- I have to take a 14 MS. LEADER: There's a lot of paper, yeah,
15 look at those particular paragraphs. Give me a moment. 15 Judge.
16 THE COURT: Certainly. 16 THE COURT: Does it make sense for us to
17 And while we're off the record, let me 17 start with your argument, Mr. Scandaglia? And I'll let
18 see if I can help the other attorneys in the courtroom. 18 you address -- your first category of objection was
19 MS. LEADER: Okay. That sounds good. 19 really pointedly to Request No. 10.
20 THE COURT: Off the record. 20 MR. KIENZLER: That's fine, your Honor.
21 (Discussion had off the record.) 21 THE COURT: Do you want to go ahead and --
22 THE COURT: Let's go back on the record. 22 MR. KIENZLER: And just for the record, Rick
23 MS. LEADER: So we're not walking away from 23 Kienzler for Silver --
24 the rest of the subpoena. I was just saying, with 24 THE COURT: Oh, I apologize.
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1 MR. KIENZLER: That's okay. I just want to 1 of them, certainly, information about money that
2 have a clear transcript. I take no offense. 2 Mr. Silver put into those investments and money that he
3 MR. KORNAK: Although your Honor should have 3 got back is relevant for purposes of discovery.
4 seen Mr. Scandaglia's eyes when you went to Rick first. 4 And so we've given them information
5 THE COURT: All right. Very good. 5 about his initial contributions to those entities.
6 Mr. Kienzler, go ahead, sir. 6 We've given them information about subsequent
7 MR. KIENZLER: So Request No. 10 reads 7 contributions to those entities, and we've given them
8 documents -- it requests production of documents 8 K-1 statements that he received from those entities.
9 submitted to the Private Bank evidencing the net worth 9 So there again, we feel that we've given them the
10 of Louis Silver in connection with the loans referenced 10 financial information that they're entitled to as it
11 in two, three, and four above. 11 relates to the claims in the complaint.
12 Judge, our position, which will come up 12 But the subpoena in our -- from our
13 time and again in today's hearing, is that Louis 13 perspective goes much broader than that, and asking for
14 Silver's personal financial information in blanket form 14 statements about net worth isn't tied to any allegation
15 and fashion is not relevant to this lawsuit. The 15 in the complaint. It's not tied to any theory of
16 plaintiffs have put a complaint on file, and the 16 recovery in this case, and so it becomes, as we've said
17 complaint talks about several different categories of 17 in our papers, a fishing expedition, which Illinois
18 information, and Louis has never argued that the 18 courts define as seeking discovery merely with the hope
19 complaint doesn't put a portion of his personal 19 of finding something relevant.
20 financial information at issue. 20 So, Judge, we think that that explains
21 They have a claim for excessive 21 why a lot of their motion says that -- it talks in
22 compensation from the nominal defendant, Logan Square 22 terms of wanting to see the, quote, whole picture. But
23 Aluminum Supply, Inc., and the nominal defendant, 23 our problem with this -- with this particular request
24 Silver Real Estate Development and Management Corp.; 24 and with certain others we'll talk about later is that
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1 and because they have a claim that Louis took excessive 1 they've never articulated what piece of the picture is
2 compensation from those claims, we have provided them 2 missing.
3 with W-2s that he received evidencing earnings from 3 And, Judge, we've -- we've bent over
4 those companies. 4 backwards to ask them if they can articulate what piece
5 They have evidence -- they have 5 of the picture they think is missing, and it's been met
6 information about dividends he's received from those 6 with a failure to articulate what more about his
7 companies. They have information about -- they have 7 personal finances is relevant to the allegations of the
8 the K-1s that he received from those companies that 8 complaint. So we think that Subpoena Request
9 were attached to the corporate tax returns. So from 9 No. 10 is irrelevant. We think it should be stricken,
10 our perspective, they certainly have excessive 10 and we think it just doesn't relate to the claims in
11 compensation. 11 this case.
12 And one more thing, Judge. They have a 12 THE COURT: So Subpoena Request No. 10
13 sworn interrogatory answer saying that there are no 13 refers back to the loans and Requests 2, 3, and 4. So
14 deferred compensation aspects of pay, things like that. 14 the loan in Request 2 is the loan with respect to the
15 So from our perspective, we have given them everything 15 Hubbard Street property; is that right?
16 they're entitled to on their excessive compensation 16 MS. LEADER: Correct.
17 claim given the allegations of the complaint that are 17 THE COURT: And then the Request 3 is --
18 on file. 18 MS. LEADER: No.
19 They have -- there's other aspects of 19 THE COURT: I don't know what loan --
20 the complaint, two -- and namely, there are two 20 MS. LEADER: I'm sorry, Judge. I'm sorry to
21 supposed corporate opportunities that were usurped: 21 interrupt you. So Request No. 2 relates to Louis
22 the Macy's warehouse and the building on Hubbard Street 22 Silver after -- right. Okay. I'm sorry. I stand
23 in downtown Chicago. Those corporate opportunities, 23 corrected. I was looking at something else. Yes.
24 while we have a difference of opinion on the substance 24 Request No. 2 relates to --
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1 THE COURT: Okay. So two is the Hubbard 1 them information about the source of funds he used for
2 Street? 2 No. 4.
3 MS. LEADER: Yes. 3 So the reference to loans for
4 THE COURT: And what is three? 4 transactions that are at issue in the case doesn't,
5 MR. KIENZLER: Judge, two is not -- just for 5 from our perspective, put his net worth in play. We
6 the -- just to be clear, two is not for Hubbard Street. 6 still don't think that -- we still don't see the tie
7 MS. LEADER: Okay. 7 between the allegations of the complaint and a net
8 MR. KIENZLER: Two is for the -- two is for 8 worth statement that he gave to the Private Bank.
9 4K Logan Square Partnership. 9 THE COURT: I'm not -- I'm a little bit
10 MS. LEADER: Okay. Two -- yes. So after 10 confused, and here's why. What I hear you saying on
11 Louis Silver with two other partners, Aaron Paris and 11 the one hand is we've already given them the documents,
12 Paul Fishbein, bought the Macy's warehouse, he 12 and on the other hand, but the documents are
13 purchased a portion of their interest in the Macy's 13 irrelevant. Where -- where do you think this Court
14 warehouse. And that's held solely by him or by his 14 should draw the line with respect to what's relevant
15 trust and -- under the guise of 4K Logan Square 15 and irrelevant here?
16 Partners, and that was done in 2017. 16 MR. KIENZLER: I think the Court should draw
17 I stand corrected. And that is the 17 the line based on what the allegations of the complaint
18 portion, in part -- I don't have all the information 18 are. So the complaint says that he usurped a corporate
19 yet, but -- that he leased back to the company. So 19 opportunity to buy the Macy's warehouse.
20 that portion -- at least part of 4K Logan Square 20 THE COURT: Right.
21 Partners, if not all of it, is leased to Logan Square 21 MR. KIENZLER: Right. And we've given --
22 Aluminum Supply Company, one of the nominal defendants. 22 we've given them documents showing what money he used
23 So there were two acts allegedly of 23 for that transaction, so we think that's what they're
24 self-dealing dealing with the Macy's warehouse. That 24 entitled to. They know what accounts the money came
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1 is the second of the two. 1 from. They know how he came up with his initial
2 THE COURT: Okay. So two relates to the 2 contribution to that -- to the entity that was formed
3 Macy's warehouse -- 3 to buy the Macy's Warehouse.
4 MS. LEADER: Yes. 4 And the same is true with the
5 THE COURT: -- from your perspective? 5 opportunity for Hubbard. They know what accounts the
6 MS. LEADER: Yes. 6 money came from. They know the entity that was used to
7 THE COURT: And three? 7 buy the building, and we think that that's what they're
8 MR. KIENZLER: Three is a family-owned -- 8 entitled to.
9 a loan to family-owned companies, your Honor. 9 THE COURT: Okay. Thank you for your
10 THE COURT: Does it relate to Macy's or -- 10 argument.
11 MR. KIENZLER: Logan -- Logan Square -- it 11 MS. LEADER: Can I respond?
12 relates to the family-wide business run by Logan Square 12 THE COURT: Yes, Ms. Leader.
13 Silver Real Estate, Silver Touhy, Silver Development 13 MS. LEADER: Several things, your Honor.
14 at 2470 North Milwaukee. 14 One is, clearly, just having a closing statement --
15 THE COURT: And four? 15 just referring to these particular subpoenas -- two,
16 MS. LEADER: Macy's warehouse. 16 three, and four, I believe -- just getting a closing
17 THE COURT: Okay. 17 statement and the source of funds account and what
18 MR. KIENZLER: Judge, if I may, from our 18 entity purchased these corporate opportunities that
19 perspective, the fact that this references these three 19 have been allegedly usurped is not enough.
20 loans doesn't change the fact that it's irrelevant. 20 I mean, we have no idea what appraisals
21 We've given them information about funds he used for 21 were done on the property, what the property's
22 this -- the transaction that two is talking about. 22 supposed -- was supposedly worth at the time of the
23 We've given them all the loan documents for -- the 23 loan, what representations Mr. Silver made to the bank
24 final signed loan documents for No. 3, and we've given 24 in connection with the loan, which can certainly be
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1 relevant to usurping the corporate opportunity, what 1 cited in our briefs that we're not -- W-2s aren't
2 loan-to-value metrics the bank used, which certainly is 2 enough when this information is at issue. The
3 related to the loan, and it's certainly related to 3 Hawkins vs. Wiggins case and the Hawkins vs. Potter
4 evaluating, you know, what is the worth of this 4 case that we cited certainly is on point, and it's
5 corporate opportunity that was allegedly usurped. 5 clear that the allegations in the complaint are --
6 We have no information whatsoever. 6 clearly put Mr. Silver's income at issue.
7 We've asked for balance statements. We've asked for 7 And there's more that we've learned in
8 operating expenses and profits and gross receipts, and 8 discovery. For example, he leases -- or he owns a
9 we've got nothing in that regard. So I do think, you 9 Bentley through the business. All of his family
10 know -- it's true counsel provided us with the 10 members have cars. I mean, I don't know what his tax
11 documents he has referenced, but that's not enough. 11 return's going to show with respect to those kinds of
12 It's not enough to begin, and we've got -- our 12 things, but certainly, we're entitled to see that. If
13 allegations in the complaint deal with, if we prove 13 the issue is, you know, protecting the information as
14 that, then there should be a constructive trust set up. 14 confidential, we've offered to have a two-tiered
15 There should be profits disgorged. 15 protective order. I just think the probative value far
16 We can't begin to evaluate any of that 16 outweighs anything else.
17 without some of this additional information. So I do 17 MR. KIENZLER: Judge --
18 think, with respect to those particular loans, it's 18 THE COURT: All right. I -- hold on a
19 very important to get some additional information. 19 minute, if you will.
20 With respect to the net worth issue, 20 MR. KIENZLER: Okay.
21 Illinois law is clear that evidence of the 21 THE COURT: I promise I will let you
22 plaintiffs' -- of the defendant's net worth is relevant 22 respond.
23 and discoverable where the pecuniary position is that 23 But, you know, my initial inclination
24 it should -- which counsel somewhat admitted to in his 24 is that I'm inclined to agree with you that you need
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1 argument and certainly where the punitive damages have 1 the information to value the corporate opportunity that
2 been alleged, and we have alleged punitive damages in 2 you believe was usurped, and Macy's is No. 2. But
3 the breach of fiduciary duty counts in the complaint. 3 No. 3 -- there are a lot of loans at issue here, and I
4 And so on that basis, too, I think the net worth 4 think it's important for the Court to get a sense of
5 statements are relevant. 5 exactly which loans we're talking about, and from right
6 With respect -- and I -- there is a -- 6 now it's not really my understanding that this 2.5
7 I don't know if you want to draw a line between the tax 7 that -- the loan from June of 2014, does that relate
8 returns and the net worth statements, but certainly, 8 either to Macy's or to the Hubbard Street opportunities?
9 there's -- there's flow and blurry lines there, and the 9 MS. LEADER: The loan of June of 2014, I
10 case law is clear that where the -- we don't have to 10 believe --
11 plead evidence in the complaint. We have to plead the 11 THE COURT: That's in Document Request 3?
12 facts as we know them, and certainly, counsel's 12 MR. KIENZLER: The answer is no, your Honor,
13 suggesting by his argument that we have to plead 13 from Louis Silver's perspective.
14 evidence. 14 MS. LEADER: It was my understanding that
15 We didn't know about 4K Logan Square 15 was a partial subsidy for the buyout on the 4K Logan
16 Partners, for example, when we pled the complaint. We 16 Square Partners, and that's why it's in there.
17 didn't know about a parking lot on Pulaski. That was 17 No. 1 is another corporate opportunity
18 another corporate opportunity that was usurped that 18 that was usurped at Silver Hubbard. That's the
19 came about in the discovery process. We don't know 19 225 West Hubbard.
20 what else we'll see in a tax return, but for counsel to 20 THE COURT: Okay.
21 ask us to essentially identify what we want in 21 MS. LEADER: So it's my understanding that
22 something that we don't even know what the scope is, 22 in June 2014 that -- if counsel has something to show
23 it's very difficult to do that. 23 me otherwise, I'll be happy to review it, but that's
24 And the case law is clear, and we've 24 just my --
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1 MR. KIENZLER: Judge, I absolutely do have 1 None of that is net worth statements.
2 something to show to her. 2 The two points she made on net worth
3 MS. LEADER: Okay. That would be -- and 3 statements are that Mr. Silver's financial information
4 if I am incorrect in that, I'll tell the Court, you 4 is at issue in the case and that they believe that
5 know. 5 there's a lot of -- they've cited a lot of Illinois
6 MR. KIENZLER: Well -- 6 case law that say that that would justify the
7 MS. LEADER: But it was my understanding 7 production of his net worth statements.
8 that was -- I was just looking at the date, and that 8 We disagree with that, your Honor.
9 was my understanding of when -- 9 We've put competing case law into our briefs. The
10 MR. KIENZLER: Judge, the loan -- I mean, by 10 cases they cite stand for this proposition, your Honor.
11 its own terms, this is a loan to a family-owned 11 If a plaintiff files a lawsuit against a defendant and
12 company. We have -- I issued a letter to counsel 12 says to the defendant, "Part of the damages I want are
13 yesterday. We were in court October 25th talking about 13 lost wages," then the plaintiff has put his own
14 the TRO, the rule to show cause, et cetera. You asked 14 financial information at issue and can't refuse to
15 us to step back when you took those under advisement 15 produce tax returns and financial information.
16 and talk. We did talk. 16 What they're trying to do is turn that
17 Counsel asked me to explain the 17 principle on its head and say a plaintiff sues a
18 documents we've produced that relate to the 18 defendant and says they've put his information at issue
19 4K Logan Square transaction, which is where Mr. Silver 19 by an excessive compensation claim, but that doesn't
20 bought out interests of his two partners in the Macy's 20 mean they've put his -- the entirety of his personal
21 warehouse. This is what counsel is talking about. We 21 finances at issue. And so that's what I -- that's the
22 have a letter explaining her two documents in our 22 point that I'm trying to make when I say we're not
23 production explaining the source of funds. 23 disputing that what -- the wages he made from Logan
24 So it's difficult to -- I mean, it's 24 Square are at issue. Of course, they are.
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1 difficult to respond to this because we have been 1 We're not disputing that money he put
2 responding to it. I sent it to her yesterday. It 2 into and got out of the Macy's warehouse is at issue.
3 points her to Bates numbers in the production saying 3 It is. We're not disputing that, but what we're saying
4 the source of funds was a mortgage in January of 2017 4 is that the line to draw is that information that's on,
5 that he used to buy out his partner's interest in the 5 you know, his wife and his joint tax return doesn't
6 property. 6 just become relevant to the case because they filed a
7 THE COURT: Of which property? 7 claim against him. So that's what we're saying.
8 MR. KIENZLER: A portion of the Macy's 8 And just one more point on the punitive
9 warehouse, your Honor, the portion that is leased to 9 damages issue, your Honor. Illinois law is very
10 Silver -- Logan Square, but -- 10 clear -- and we've shared this with Miss Leader -- that
11 MS. LEADER: So you -- 11 the right to seek punitive damages does not survive the
12 MR. KIENZLER: Judge, I just would like to 12 death of the plaintiff. So as it stands right now --
13 make a point just sort of -- before we sort of -- I 13 and this comes from Vincent vs. Alden-Park Strathmoor,
14 mean, I would like to bring it back to Request No. 10, 14 241 Illinois 2d 495. It's a 2011 case.
15 if we could. 15 So as it stands right now, we don't
16 THE COURT: This is part of Request No. 10 16 believe that the plaintiffs have an ability to seek
17 because Request No. 10 specifically relates to two, 17 punitive damages in this case.
18 three, and four. 18 THE COURT: Well, have you filed a motion to
19 MR. KIENZLER: Well, certainly, your Honor. 19 strike that claim at this point? I mean, it -- no
20 But on the topic of net worth statements, so what you 20 determination has been made by the Court, as far as I
21 heard Miss Leader say is she'd like appraisals, 21 know, with regard to --
22 property value information, representations to the 22 MR. KORNAK: Well, if I may, your Honor,
23 bank, loan-to-value metrics, information to evaluate 23 just briefly.
24 the opportunity, operating expenses, gross receipts. 24 THE COURT: Yes.
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1 MR. KORNAK: It was a sequence of events. 1 MS. LEADER: Correct.
2 There was no motion to strike because when Nathan 2 MR. KIENZLER: Well, certainly, your Honor.
3 passed away unexpectedly the complaint had already been 3 The point that I'm making is that it's certainly
4 filed. So there was no motion to strike filed for that 4 premature as of today, from our -- from our
5 provision of the complaint after Nathan passed away. 5 perspective, to grant them punitive damages based on
6 THE COURT: Right. And that's what I might 6 discovery given Nathan Silver's passing and leave that
7 have expected to clarify the issue. 7 they were granted to file an amended complaint, you
8 Go ahead. 8 know, within the hour.
9 MS. LEADER: Your Honor, we were just given 9 THE COURT: I hear you. I understand the
10 leave to file a verified amendment that contains a 10 argument.
11 breach of fiduciary duty claim on behalf of 11 I'm going to take a quick look at this
12 his heirs -- 12 Vincent vs. Alden-Park Strathmoor case. While I'm
13 MR. KIENZLER: Judge -- 13 doing that, why don't you talk about Exhibit G. Okay?
14 THE COURT: Hold on. Hold on, please. 14 I'll be back with you very shortly.
15 MR. KIENZLER: I apologize, Judge. 15 MS. LEADER: Okay.
16 THE COURT: Go ahead. 16 (Brief recess taken at 2:20 p.m.)
17 MS. LEADER: And there's a punitive damages 17 (Proceedings resumed at 2:28 p.m.)
18 component to that claim that we've sought in the 18 THE COURT: All right. We haven't been off
19 verified amendment. So it -- you know, it's -- it's an 19 the record that long. I didn't want to take too much
20 ongoing -- there was an ongoing shareholder impression 20 time. Have you had an opportunity to talk about
21 from our perspective, and our allegations deal with 21 Exhibit G?
22 that; and so there is -- there is a claim for punitive 22 MS. LEADER: We have.
23 damages based on what we were just granted leave about. 23 THE COURT: Okay. And do you have a
24 So I don't think counsel's point is well taken given 24 proposal with respect to Exhibit G?
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1 the current state of the pleading. 1 MS. LEADER: We do.
2 MR. KIENZLER: Judge, we -- 2 MR. SCANDAGLIA: Here it is.
3 THE COURT: Well, I think this issue with 3 MS. LEADER: We have one potential issue
4 respect to punitive damages is really important here, 4 that we just want the Court's, you know, opinion on.
5 and I need to take a look at this case because, 5 THE COURT: Sure.
6 frankly, I haven't. 6 MS. LEADER: But otherwise, we're good.
7 Go ahead. 7 MR. SCANDAGLIA: Your honor, counsel has
8 MR. KIENZLER: Can I make one more point, 8 reviewed this with me. These are my little marks, and
9 your Honor? Illinois law further says that punitive 9 then I started with this.
10 damages certainly can become relevant when claims for 10 THE COURT: All right. So you're looking to
11 punitive damages are properly an issue. This is from 11 redact the paragraph that I mentioned previously,
12 Manns vs. Briell, 349 Ill. App. 3d 358, a Fourth 12 second on page 2, which I agree and ought to be
13 District case from 2004. 13 redacted. That does potentially cause competitive harm
14 If you look at the claim that they've 14 to your clients.
15 been granted leave to file, which is not -- nothing is 15 You're also looking to redact the last
16 an issue on that yet. We will be responding to the 16 sentence of the third paragraph on page 2. You know,
17 complaint. I certainly think it would be premature to 17 I think at this juncture the Court is all right with
18 grant them leave to take punitive damages research on 18 redacting the last sentence of Paragraph 3. So when we
19 an amended complaint that hasn't been responded to. 19 get closer to trial, some of this may become public
20 But if that -- leaving that aside, your Honor, their 20 information, but right now I think it's appropriate to
21 own pleading says that -- the prayer for relief said, 21 redact.
22 "after a showing of entitlement and after a hearing." 22 And then you're also asking to redact
23 THE COURT: Well, yes, but that's always the 23 the very last sentence on page 2.
24 case. 24 MR. SCANDAGLIA: Yes.
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1 MS. LEADER: Right. 1 I don't have it in front of me right now, but I read
2 THE COURT: Yeah. I would agree. That last 2 it, and it said that there -- one of the things the
3 sentence and the one word on page 3 can be redacted 3 Court said was there was no allegation in the actual
4 and, finally, the second full paragraph on page 3 of 4 pleading itself for punitive damages, unlike the
5 Exhibit G, the last sentence. 5 situation here.
6 MS. LEADER: Right. 6 THE COURT: Okay. All right. Thank you for
7 MR. SCANDAGLIA: Half of it. 7 that.
8 THE COURT: Where do you want to start? 8 Anything you want to say to wrap up
9 With the word "consistent"? 9 with respect to Document Request 10?
10 MR. SCANDAGLIA: After the word "court 10 MR. KIENZLER: Judge, very quickly, we don't
11 order," and then there's the conjunction "and," from 11 believe the plaintiffs articulated why a net worth
12 the "and" to the end. 12 statement from Louis is relevant to their claims. We
13 THE COURT: And I agree with that proposal 13 think you should sustain the objections to Request
14 as well, Mr. Scandaglia. So you can make those 14 No. 10 on the basis that the plaintiffs have not
15 redactions, and that will become a part of the revised 15 established that information about his net worth is
16 pleading. 16 relevant to the claims in this case, and I'll end my
17 MR. SCANDAGLIA: Yes. 17 argument there.
18 THE COURT: All right. Very good. 18 THE COURT: Okay. The next category that
19 I didn't take a lot of time, but I 19 you talked about, Mr. Kienzler, was -- and these are
20 did -- for purposes of our discussion today, I did take 20 relevant to Requests 1, 2, 4, 5, 11, and 15 to 21. You
21 a look at the Vincent vs. Alden-Park case. You can 21 say all of these involve loans to entities that are not
22 bring an appropriate motion if you want to move to 22 family owned, and therefore, you don't see the
23 strike that particular request for relief. 23 relevance. Do you want to address that?
24 But the Alden-Park case does talk about 24 MR. KIENZLER: Judge, we have two primary
Page 35 Page 37
1 the fact that the common law right to punitive damages 1 objections to these. One is relevance, and one is
2 for personal injuries does not survive the death of the 2 breadth.
3 injured party. Here we do have a claim for usurpation 3 Judge, we think the -- we think that
4 of corporate opportunities, and the case law is clear 4 these requests essentially ask for every -- every piece
5 that that is an injury to the corporation rather than a 5 of paper and every e-mail that was created at any time
6 personal injury. 6 with relation to all of these loans, and when I talk
7 It is an injury that is shared by all 7 about the loans in No. 1, it's a loan to Silver
8 of the investors, and so I think there's -- there's an 8 Hubbard; two, 4K Logan Square; four, 4K Diversey. Five
9 issue to go forward with, but this is not as simple as 9 is loans taken during the development of the Macy's
10 no punitive damages could be had in this case because 10 warehouse; 11, Palatine and Naperville Studio 41s,
11 of Nathan's passing. That's my feeling. 11 which the plaintiffs signed off on during the course of
12 Anything more you want to add with 12 this lawsuit; 15, more Logan -- 4K Logan Square; 16,
13 respect to Request No. 10? And then I'm going to give 13 4K Logan Square; 17, 4K Logan Square; 18, 4K Diversey.
14 you the last word on that, Mr. Kienzler. 14 And the rest of them are things having to do with the
15 MS. LEADER: No, other than I did look at 15 Macy's warehouse, your Honor.
16 the Vincent case at the break as well, your Honor; and 16 We think that these requests are
17 in that case, there's one other distinguishing factor, 17 overbroad. We think that they seek through
18 and that is there was no allegation in the prayer for 18 Subsection F -- and I guess maybe -- maybe step back,
19 relief for punitive damages unlike the situation here. 19 and let me make sure that part of our discussions
20 So it's further distinguishable in the pleading itself 20 before this motion are carried through.
21 based on my reading of the case, but -- 21 At our August 8th 201(k) conference,
22 THE COURT: I'm sorry. I didn't follow. 22 plaintiff offered to withdraw Subsections D and E from
23 There's no allegation -- 23 each of these requests, and we're operating as though
24 MS. LEADER: Judge, it's my understanding -- 24 that still holds true. Through Subsection F, we
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1 believe -- 1 statements for the companies and closing statements for
2 THE COURT: Maybe before we move on we 2 those loans and a host of other things.
3 should determine is that -- does that still hold true? 3 But -- so taking No. 1, we think that
4 MS. LEADER: It -- we did offer to withdraw 4 this is a backdoor attempt at getting his tax returns,
5 those subsections from the request to produce, not from 5 same with number E, same with number F. We think
6 the subpoena, because -- so -- and let me explain the 6 that -- we think that this subpoena is seeking
7 distinction. So with respect to the subpoena, whatever 7 information about Louis's finances that is not relevant
8 the bank received on the borrower's -- borrower's 8 to their complaint.
9 shareholders information or borrower's member 9 We think that throwing that subsection
10 information is -- is what it received whereas when -- 10 into an otherwise overbroad subpoena request to the
11 in the actual request, I agree that that might be 11 bank is improper, and we object to it for those reasons.
12 vague. But in the -- in the actual subpoena, it's 12 THE COURT: And another objection, I
13 whatever was submitted in connection with the loan or 13 believe, was simply to the wording of the document
14 whatever the bank sought. 14 request; that when the documents sought to be
15 So I think that it's a different 15 discovered are documents evidencing or relating to,
16 situation, your Honor, and so we did, in fact, in the 16 I think your argument is that the words "relating to"
17 201(k) conference say with respect to the request to 17 make this very overbroad.
18 produce that -- that somewhat mirror some of these 18 MR. KIENZLER: Well, Judge, certainly, we
19 subpoena -- subpoena requests we would agree to forego, 19 have a -- we have a global objection to all of these
20 on the basis of vagueness or overbreadth, anything 20 loan requests, whether they're family-owned companies
21 related to E or F. But in connection with the bank 21 or not; and if you look at the words of the subpoena
22 subpoena, it's whatever they have. 22 request, it says, "all documents evidencing or relating
23 THE COURT: All right. So it sounds like 23 or related to the application to Private Bank, the
24 there's no agreement with respect to the bank subpoena. 24 consideration by Private Bank, and the approval by
Page 39 Page 41
1 MR. KIENZLER: So that's fine. 1 Private Bank of the loan/mortgage that was issued
2 Okay. So Subsection D, your Honor, 2 to --" the case in No. 1 it's to Silver Hubbard. In
3 Subsection D asks for income tax returns submitted by 3 the case of others, as you go through the subpoena,
4 the borrower. This dovetails into the motion to compel 4 it's different entities, and then it says "including,
5 to Louis and dovetails into arguments I just made about 5 without limitation" eleven subcategories.
6 the net worth statements. Louis does not believe that 6 We think that the requests on their
7 plaintiffs' complaint that is on file or, frankly, the 7 face are vague, ambiguous, overbroad. It's difficult
8 amendment that they've been given leave to file this 8 to determine what exactly they're asking for, and so we
9 afternoon justifies discovery in wholesale fashion into 9 certainly have objected on those bases as well.
10 his personal finances. 10 THE COURT: Okay. And that is the argument
11 THE COURT: Hasn't he already turned over 11 that you want to make with respect to all of the
12 the income tax returns, or am I not remembering 12 category of the loans to entities not family owned?
13 correctly? 13 MR. KIENZLER: That's correct, your Honor.
14 MR. KIENZLER: He's turned over -- 14 And for the record, those would be
15 MR. KORNAK: Company tax returns, corporate. 15 one -- Subpoena Request No. 1, 2, 4, 5, 11, 15 through
16 MS. LEADER: Corporate. 16 21.
17 THE COURT: Corporate. Thank you. 17 THE COURT: Okay. Thank you, sir.
18 MR. KORNAK: And the K-1 statements that 18 Ms. Leader.
19 Louis individually received. 19 MS. LEADER: Okay. Just in terms of the
20 THE COURT: Okay. Go ahead. 20 actual loans themselves, I want to start focusing on
21 MR. SCANDAGLIA: And W-2s. 21 that. I think that might be easier.
22 MR. KIENZLER: And W-2s. 22 So one is one of the corporate
23 MS. LEADER: W-2s? 23 opportunities usurped at Silver Hubbard, 225 West
24 MR. KIENZLER: Correct. And financial 24 Hubbard. So for the same reasons, we think the Macy's
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1 warehouse loan documents are relevant to our 1 and the rental income and the expenses, all of it. We
2 allegations. We think these -- what's being requested 2 have none of that information currently through the
3 in Request No. 1 of the subpoena is relevant. 3 discovery process.
4 Two is, again, the 4 -- the 4K Logan 4 THE COURT: All right. Last word,
5 Square, the subset that Louis purchased the second 5 Mr. Kienzler. Excuse me.
6 prong, if you will, of the corporate opportunity 6 MR. KIENZLER: Judge, I would just come back
7 allegedly usurped with respect to the Macy's warehouse. 7 to -- Subsection D, for example, it's unclear to me --
8 Four is the Macy's warehouse loan. Five is in 8 and plaintiffs have not articulated it through the
9 connection with the development or purchase of the 9 201(k) process -- how Louis's tax returns are relevant
10 Macy's warehouse. 10 to valuing the 4K's or the Macy's warehouse project or
11 Eleven is to determine whether there 11 the Silver Hubbard project; that they've made no effort
12 are other opportunities that may have been usurped by 12 to articulate that for me.
13 Louis with respect to properties that he purchased for 13 And I submit to the Court that I don't
14 which the bank issued a loan, which was leased back to 14 understand how the tax return would be relevant to the
15 Logan Square, which is -- was the pattern that we saw 15 stated reason why they want these documents, which is
16 in terms of the corporate opportunities usurped. And 16 to value the opportunities.
17 it's -- it kind of crystalized when we saw the 4K Logan 17 THE COURT: All right. That's a fair
18 Square Partners where he purchased a portion of the 18 question. Do you want to respond to that?
19 Macy's warehouse from his two unrelated partners and 19 MS. LEADER: Yeah. I'll be happy to respond
20 then leased it back to Logan Square. 20 to that.
21 15 is 4K Logan Square Partners, again, 21 When we first drafted this list,
22 related, and so is 16, and so -- I'm just going -- 22 your Honor, we were looking for everything that would
23 going through these. All of these relate -- 15 through 23 typically be in a loan application package, and so
24 21 relate to different entities that were identified in 24 that's why it was included. The other reason I did
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1 discovery related to the Macy's warehouse. So, again, 1 include it is because when we were arguing about tax
2 it's all corporate opportunity issues in terms of 2 returns counsel said, "Well, you can get it from other
3 what's being usurped. 3 places." So I said, "Okay. Let's try to do it."
4 I've already argued in connection with 4 But that was not the only reason that
5 the Macy's warehouse for the Court -- and I don't 5 we did that. We -- the main reason was that we were
6 want to be redundant here -- why I think these kinds of 6 attempting to do a complete loan application process
7 documents are relevant, and what we have isn't sufficient 7 package, and so these are the things that are typically
8 to begin to evaluate the corporate opportunities 8 included. But we can argue the tax return issue
9 allegedly usurped. 9 separate and apart, if the Court would prefer.
10 To the extent that the Court thinks 10 THE COURT: So with respect to the loan
11 that the language "all documents evidencing or related 11 documents, you're saying that you would withdraw D and
12 to" the app -- I'm willing to strike the "or related 12 E from document requests that are at issue? 1, 2, 4,
13 to" because what we're really seeking is the 13 5, 11, 15 through 21?
14 application, the subsections of the application, the 14 MS. LEADER: I would withdraw D and E to the
15 minutes related to the application because I think 15 extent we get this information from Mr. -- I'm not
16 that's relevant for the reasons previously articulated. 16 saying it's not relevant from Mr. Silver. With that
17 THE COURT: Okay. We could even strike that 17 caveat or qualification, yes, I would withdraw it from
18 "all documents evidencing." You are looking for the 18 the bank's subpoena.
19 documents identified in A through K? 19 THE COURT: And you would do that because
20 MS. LEADER: Correct. 20 you think it's covered by ten? Is that accurate?
21 THE COURT: And you're looking for those 21 MS. LEADER: I think it's covered by ten,
22 documents because you believe that they are relevant to 22 and I think we're otherwise entitled to get the
23 a valuation of the opportunities purportedly usurped? 23 information from Mr. Silver directly.
24 MS. LEADER: Both in terms of the property 24 THE COURT: All right. But this is -- okay.
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1 Understood, understood. 1 inclined to agree with Mr. Kienzler. I don't see how
2 The next category then is loans to 2 the loans relate to the excessive compensation to
3 entities that are not family owned, and that involves 3 Louis. How do they -- how do they relate?
4 3, 9, 12, and 13. 4 MS. LEADER: It relates to the -- not to the
5 MR. KIENZLER: Judge, this is really more of 5 excessive compensation to Louis, but to the shareholder
6 the same except for these are -- we think these loans 6 oppression because the shareholders are the ones -- the
7 are further afield from what is at issue in this case. 7 minority shareholders are the ones who are suffering
8 I don't know the relevance in a corporate opportunity 8 because of the amounts of debt, and the amount that
9 shareholder oppression case to loans that were made to 9 they get from the company, if anything, in dividends is
10 the family entities, and certainly, the arguments that 10 pretty nominal.
11 we're talking about with Subsection D and E carry 11 There were years covered by this
12 through to these requests too. 12 litigation where no dividends were even declared to the
13 These are not corporate opportunities 13 minority shareholders, and so that's why to evaluate
14 that the plaintiff is seeking to value. These are 14 the shareholder oppression we need to evaluate the debt.
15 loans that were made through the ordinary course of 15 You wanted to say something. I
16 business to companies which the plaintiffs -- first 16 can't --
17 Nathan, now his children -- are shareholders in, and 17 MR. KESSLER: Oh. Well, I think it also
18 asking for the loan file and among that Mr. Silver -- 18 goes to -- the excessive compensation goes to the
19 Mr. Louis Silver's tax returns we think is 19 question of whether the corporate defendants would have
20 inappropriate. We don't think it's tied to any -- 20 qualified for these loans themselves had Louis not
21 anything that's at issue in this case, and we think 21 taken the excessive compensation instead of him saying,
22 3, 9, 12, and 13 should be removed from the subpoena. 22 well, the corporation really can't afford these
23 THE COURT: All right. Thank you, Counsel. 23 properties.
24 MS. LEADER: So there are allegations in the 24 THE COURT: Okay. Thank you.
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1 complaint, your Honor, that Nathan and subsequently in 1 Do you want to respond?
2 the verified amendment that his children do not -- have 2 MR. KIENZLER: Judge, just to the last
3 not received critical information, and the subpoena 3 point, we're talking about loans that were made to the
4 with respect to the particular items referenced relates 4 family-owned entities. Maybe I misunderstood what
5 to those allegations. 5 Mr. Kessler was saying, but I think that goes to the
6 There's been allegations of excessive 6 last category and not this current category.
7 compensation on the part of Louis Silver to the 7 MR. KESSLER: It doesn't --
8 detriment of Nathan and his family and that there have 8 (Court reporter interruption.)
9 been allegations that -- if we can go off the record 9 THE COURT: I think Mr. Kessler
10 for a moment. 10 acknowledged that --
11 THE COURT: We can go off the record because 11 MR. KESSLER: It goes to the first
12 you arranged for the court reporter. 12 category -- I agree -- not the non-family --
13 MS. LEADER: Right. So if we can go off the 13 THE COURT: I do see this category as being
14 record. 14 different.
15 (Discussion had off the record.) 15 MR. KESSLER: Okay.
16 MR. KIENZLER: Could we go back on the 16 THE COURT: And I think you're right; that
17 record, please. 17 the comment that was just made really does go to the
18 THE COURT: Oh, yeah. Let's go back on the 18 first category.
19 record. 19 MR. KESSLER: The first category.
20 MS. LEADER: Yes. Sorry. I didn't want to 20 THE COURT: Yeah.
21 get into this. 21 MR. KIENZLER: So, Judge, I would submit
22 THE COURT: What I heard was that this 22 that the stated reasons as to why this loan information
23 information is relevant because it relates to excessive 23 to family-owned entities is needed in this case --
24 compensation to Louis, and I guess in this instance I'm 24 excessive compensation, an allegation of withholding
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1 information -- don't justify the requests and certainly 1 $5 million line of credit in addition to the $22 million
2 don't justify requests for personal financial 2 loan. I have some documents related to that that
3 information of Louis. 3 Mr. Scandaglia has produced, but I want to see the bank
4 Again, I don't think -- I don't think 4 records related to who is taking those monies out
5 the plaintiffs have articulated a basis to bring this 5 and -- but that's the nature of eight.
6 information into the case. I think 3, 9, 12, and 13 6 So eight is a little different than six
7 should be taken out of the subpoena. 7 and seven. Six and seven relate to the corporate
8 THE COURT: Okay. And the last category 8 opportunities allegedly being usurped.
9 relates to six, seven, and eight, documents evidencing 9 THE COURT: All right. What you're really
10 repayment of the loans. 10 looking for here, though, is essentially a payment
11 MR. KIENZLER: Correct, your Honor. So 11 history, not give me a copy of the assignment of rents,
12 documents evidencing repayments of the loans, six is -- 12 if there is one. It seems to me that asking for the
13 so six and seven are -- six is for Silver Hubbard. 13 payment history is overbroad.
14 Seven is for Macy's warehouse. Eight is for a 14 MS. LEADER: Okay. I'm willing to amend it.
15 family-owned entity. 15 What I really am looking for is the assignment of rents
16 Judge, the reason that we've objected 16 and if that's, in fact, how the indebtedness is being
17 to these three subpoena requests is relevance. There's 17 paid. So I'm willing to -- because I do think that's
18 no allegation in the complaint that's on file in this 18 very relevant on six and seven. So I'm willing to
19 case that loans made to Silver Hubbard, 4K Logan 19 reframe it, but I think that's the issue, your Honor.
20 Square, 4K Diversey were repaid with company funds. 20 THE COURT: Okay. And do you want to speak
21 There's no evidence that there's been any impropriety 21 to that, Mr. Kienzler?
22 that loans made to family-owned entities were somehow 22 MR. KIENZLER: I mean, I guess -- so I don't
23 repaid in a nefarious way, and for that basic reason, 23 know exactly how she's reframing it.
24 we don't think that bringing in information about how 24 THE COURT: No. I'm not asking you to
Page 51 Page 53
1 loans have been repaid is relevant to the complaint 1 respond to that.
2 that's on file. 2 MR. KIENZLER: Oh, okay.
3 THE COURT: All right. Thank you. 3 THE COURT: I want to be clear about that.
4 MS. LEADER: Your Honor, particularly in the 4 I'm not asking you to respond to something that you
5 Silver Hubbard situation, the mortgage documents that 5 haven't seen.
6 I've seen indicate at least Private Bank, the 6 MR. KIENZLER: Well, I mean, I guess I
7 predecessor to CIBC, was willing to take an assignment 7 don't -- all I'll say is that if this --
8 of rents in lieu of mortgage payments. I don't know if 8 THE COURT: I guess I want to give you the
9 that's true on some of the -- if that's been done and 9 opportunity to argue that the assignment of rents is
10 if that's been done on the other -- other two entities. 10 not relevant, if you want to argue that.
11 But if that's the case, it's hard for 11 MR. KIENZLER: Well, all I would say is that
12 the defendant to argue that the corporation couldn't 12 they already have the information. We've given them
13 have afforded to purchase these corporate opportunities 13 the closing documents for the loans.
14 that were allegedly usurped if, in fact, the 14 So, I mean, Miss Leader is talking
15 corporation is essentially paying the mortgage for 15 about an assignment of rents that she has reviewed from
16 these opportunities, and so for that -- by the rents. 16 Lou Silver's production. So I guess -- I mean, I'm
17 And that's the reason that we were looking for six, 17 just sort of trying to -- maybe I'm not understanding.
18 seven, and eight is to see if, in fact, that's how the 18 I really don't understand what she's looking for that
19 loans are being repaid; and if it's through the 19 she doesn't have at this point. She has the leases.
20 assignment of rents, it's very relevant to the 20 She has the rent history. She has the loan documents.
21 corporate opportunity issue in terms of six and seven. 21 THE COURT: That sounds like a matter for a
22 No. 8 is -- there's a -- that is a loan 22 201(k) before you revise that.
23 that is a loan to the company, and in that particular 23 MS. LEADER: Okay.
24 situation, there was a line of credit that was a 24 THE COURT: Okay. I'm going to take a short
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1 break, and then we'll give you the ruling with respect 1 So with respect to this specific case,
2 to the subpoena. 2 documents evidencing payments made in connection with
3 I recognize there's been an offer with 3 loans in six, seven, and eight -- and these are
4 respect to the protective order, and I'm certainly 4 loans -- these are the family loans, loans related to
5 going to require that there not be disclosure if I do 5 entities controlled by the family -- the motion to
6 order production of this -- of financial information 6 quash here will be granting -- granted because the
7 beyond the attorneys in this case and any experts that 7 Court does find that the burden -- you know what? I
8 you may hire; and I'm certainly open to any additional 8 apologize. This is the -- six, seven, and eight is the
9 provisions that either side wants to suggest when it 9 payment history.
10 comes to a protective order today or in the future. 10 MR. KIENZLER: That is correct. That's
11 MS. LEADER: Experts or accounting 11 correct, your Honor.
12 consultants? 12 THE COURT: You're looking for payment
13 THE COURT: Yes. Okay. 13 history on the loans. Sorry about that.
14 MR. KIENZLER: Sure. We appreciate that, 14 All right. The motion to quash will be
15 your Honor. 15 granted with respect to the payment history. The Court
16 MS. LEADER: Thank you. 16 does find that the burden of production of the history
17 THE COURT: All right. I will be back with 17 outweighs any benefit of that production.
18 you in 10 to 15 minutes. 18 Plaintiff has essentially acknowledged
19 MS. LEADER: Thank you. 19 that what they're really looking for is an assignment
20 THE COURT: You're welcome. 20 of rents. I understand the relevance of that, but I --
21 (Brief recess was taken at 2:58 p.m.) 21 you know, producing the whole payment history to try to
22 (Proceedings resumed at 3:18 p.m.) 22 get to assignment of rents, I think, is unreasonable.
23 THE COURT: Back on the record. 23 So the motion to quash in connection
24 Do we have everybody here? 24 with six, seven, and eight will be granted, and I'm
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1 MR. KIENZLER: Yes, your Honor. 1 sure where there are assignment of rents you could work
2 THE COURT: All right. Thank you for your 2 that out and produce a copy of the assignment.
3 argument with respect to the subpoena to the bank. 3 All right. With respect to the loans
4 I'd like to begin, but with the 4 that are family owned -- and this is 3, 9, 12, and
5 recognition that, as we all know, a party's generally 5 13 -- the argument is that these are relevant to
6 entitled to obtain full disclosure in discovery 6 excessive compensation to Louis and to shareholder
7 regarding any matter that is relevant to the subject 7 oppression because of the amounts of the debt.
8 matter that's involved in the pending action. 8 Frankly, the Court doesn't see the relevance argument
9 And the Court is certainly authorized 9 with respect to the excessive compensation allegations.
10 to honor a protective order denying, limiting, 10 And when it comes to the oppression
11 regulating discovery to prevent unreasonable annoyance, 11 claim, the oppression claim here is, essentially, that
12 expense, or embarrassment, disadvantage, or oppression; 12 Louis's -- that Louis reduced Nathan's compensation
13 and the reason for that is that it is clearly 13 while increasing his own and that Louis improperly
14 recognized that, although the scope of discovery is 14 terminated Nathan's employment, and I just don't see
15 broad, the parties do not sacrifice all aspects of 15 how these loans really are relevant to that issue.
16 privacy -- their personal privacy or their personal 16 So the -- let me put it this way. If
17 information -- because of a lawsuit. 17 there is any tangential relevance, I think it's
18 Case law is clear that, even if certain 18 outweighed by the burden of production. So the motion
19 discovery is relevant, information need not be produced 19 to quash with respect to 3, 9, 12, and 13 is also
20 if the benefits of producing it do not outweigh the 20 granted.
21 burdens of producing, and the legitimate privacy 21 However, when it comes to the loans to
22 concerns of the responding party are one of the factors 22 the entities that are not controlled by the family,
23 that the Court is specifically directed to weigh in its 23 here the Court does agree with the plaintiffs' argument
24 balancing. 24 that this is relevant to the valuation of the corporate
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1 opportunities that were allegedly usurped. Prior 1 MS. LEADER: Okay.
2 production evidencing compensation titled to Louis 2 THE COURT: So with respect to Document
3 I don't think gives plaintiff the opportunity that it 3 Request 10, it will be amended, but the motion to quash
4 deserves to try to value those claims. 4 in its entirety is denied.
5 So I think that the information that 5 So the motion to quash is granted with
6 plaintiff is seeking in 1, 2, 4, 5, and 11 is relevant, 6 respect to the Document Request 3, 6, 7, 8, 9, 12, and
7 and I think that the burden of production does not 7 13. The motion to quash is denied with respect to
8 outweigh the relevance. I think the relevance and the 8 Document Request 1, 2, 4, 5, 10, and 11, and I have
9 need for the discovery is controlling on this one. So 9 amended certain of those requests.
10 the motion to quash will be denied. 10 So that, I believe, will resolve the
11 However, for these loans -- 1, 2, 4, 5, 11 motion to quash and the motion for protective order
12 and 11 -- I'm going to order that the request be 12 with respect to the subpoena to the bank unless there
13 amended so that the request will include only the 13 are some additions you want to make with respect to a
14 specific documents identified, not documents relating 14 protective order for the subpoena to the bank.
15 to the specific documents identified; and it'll be the 15 Do you want to discuss that now?
16 specific documents identified in Subsections A through 16 MR. KIENZLER: Well, Judge, before we took
17 C and F through K. 17 our break, you made a statement saying that, to the
18 Document Request No. 10, documents 18 extent financial information was ordered, you would
19 evidencing the net worth of the defendant, the case law 19 rule that the information be held attorneys' eyes only
20 does clearly provide that the financial status of a 20 essentially. We -- on behalf of Louis, we would
21 defendant is relevant and discoverable when there is a 21 certainly request that for Request No. 10.
22 claim for punitive damages, and right now there is a 22 THE COURT: Certainly. Accounting
23 claim for punitive damages here. 23 professionals, I think, you referenced as well.
24 The case law that was cited today with 24 MS. LEADER: Yes, yes. Attorneys and
Page 59 Page 61
1 respect to personal injuries, the Court doesn't see it 1 accountants, yes.
2 as controlling, and so I believe that it's appropriate 2 THE COURT: I think that's perfectly
3 to allow discovery into the defendant's status. But I 3 reasonable.
4 agree with Mr. Kienzler's argument that this is 4 MS. LEADER: We have no objection to that as
5 somewhat vague, "documents evidencing the net worth of 5 long as the accountants are included.
6 the defendant." 6 MR. KIENZLER: That's fine too, Judge. Just
7 What is it -- I think you referenced a 7 to be clear on the record, accountants -- we can
8 specific document, Ms. Leader, that you were looking 8 include them, obviously, in the control group.
9 for in these loan applications. What is it you're 9 THE COURT: Thank you, Mr. Kienzler.
10 looking for there? 10 All right. So I think that at this
11 MS. LEADER: There aren't -- some of the 11 point in the afternoon -- it's just before 3:30. We
12 loan documents required Mr. Silver -- and I can't cite 12 have resolved the issues with respect to redacting the
13 the loan documents specifically, but generally required 13 petition for temporary restraining order at this point.
14 Mr. Silver to maintain a certain net worth and disclose 14 We have resolved the motion for leave to file an
15 that he had maintained a certain net worth with 15 amended pleading. We have resolved the motion for a
16 respect, I guess, to the loan-to-value ratios. And so 16 protective order or to quash the subpoena to the bank
17 he would have submitted net worth statements to the 17 and also the motion to compel production by the bank.
18 bank in connection with those loan requirements, but I 18 So you're going to need to prepare an
19 don't know anything more specific than that. 19 amended subpoena to the bank, and then we'll get back
20 THE COURT: Okay. All right. Well, I don't 20 here for status of discovery with respect to the bank
21 have a problem with discovery of if you want to call 21 in January. By that point in time, Mr. Kienzler,
22 them net worth statements. I think that's -- that's a 22 you'll have had an opportunity to respond to the
23 little bit more specific than "documents evidencing the 23 amended pleading.
24 net worth." 24 We still have a motion to compel and a
16 (Pages 58 to 61)
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1 motion with respect to interrogatories. Do you think 1 present in the return, this Court cannot speculate on
2 we can get that done yet this afternoon, or do you want 2 the use defense may have made of the plaintiff's
3 to put that over to January? You tell me. 3 federal tax -- income tax returns." I think that when
4 MS. LEADER: I think the only thing we have 4 counsel says to us, "Tell us what you want in the tax
5 outstanding on the motion to compel really is the tax 5 returns," and we don't know what's there, it's
6 return issue. I think we've worked out everything 6 precisely this issue.
7 else. 7 And so, again, I don't think it's
8 THE COURT: Okay. Well, let's argue that 8 any -- there's any question that we could have -- we
9 today then. Let me get them. 9 would protect the confidentiality of the information.
10 I have a motion to compel filed 10 We understand that it's confidential, and we would make
11 August 21st, 2018. Can you tell me, Mr. Kienzler, was 11 it subject to attorneys' and accountants' eyes only.
12 there a response to this that I need to be looking at? 12 But I don't think, under the circumstances, that we can
13 MR. KIENZLER: Yes, your Honor. 13 say that W-2s and K-1s are sufficient here.
14 September 20th. 14 There's other kinds of compensation
15 THE COURT: Okay. 15 that we've seen in terms of a Bentley for Mr. Silver
16 MS. LEADER: And there was a reply 16 that's gone through the corporation. Robin Silver, his
17 October 11th. 17 wife, has taken compensation out. We've learned that
18 THE COURT: September 20th and October 11th. 18 in discovery.
19 MS. LEADER: Yes. 19 And so it's hard to say that somehow
20 THE COURT: Okay. Why don't you go ahead 20 this should be shielded given what we've learned in the
21 and proceed with your argument, Ms. Leader. 21 discovery process, and we've had limited access to some
22 MS. LEADER: Well, some of this we started 22 of this information because some of it's in the
23 to argue before. So just very briefly, your Honor, I 23 corporate returns, but -- in the corporate documents.
24 think that given the allegations of excessive 24 But other things I don't know what he
Page 63 Page 65
1 compensation, given the corporate opportunities that 1 has declared. I don't know what he has received from
2 have been allegedly usurped, and the fact that we've 2 other companies. I don't know if there are other
3 discovered more in the process of discovery here, 3 corporate opportunities that we need to deal with. I
4 we've -- and given the fact that there's case law that 4 don't know what he's gleaned from the corporate
5 says, if the complaint identifies compensation as an 5 opportunities that he's allegedly usurped. We've never
6 issue, then, in fact, the tax returns are relevant; and 6 gotten that information. So I think, given the totality
7 there is case law that rejects -- and we've cited it in 7 of the situation, we need to see the tax returns.
8 our briefs -- the idea that the defendant advances here 8 THE COURT: All right. So just so that I
9 that the W-2s are sufficient. 9 can really focus, we're talking now about the second
10 The case law says -- and I think 10 set of discovery. Which requests? So that I can give
11 it's Potter -- it's Hawkins vs. -- Wiggins and Potter 11 you a really specific order.
12 are the two cases on point in terms of rejecting W-2s 12 MS. LEADER: Oh, I'm sorry, Judge. Hold on.
13 only and saying that the tax returns themselves can be 13 MR. KIENZLER: No. 1, your Honor.
14 relevant if there's no substitute. 14 MS. LEADER: Yeah. I think it's only No. 1.
15 In Hawkins vs. Wiggins, the Court says 15 I think the other things, I think, were --
16 that -- in that case the plaintiff was arguing that the 16 THE COURT: So we're only looking at
17 secondary evidence presented in the form of a W-2 and a 17 Document Request No. 1?
18 check stub was the substitute for the requested tax 18 MS. LEADER: Well, there's Document Request
19 returns, and the Court said the return could have 19 No. 1, and there was a net worth issue in the -- in
20 useful information -- this was a personal injury case 20 here as well, which was document request number --
21 regarding medical expenses and possible reimbursement 21 sorry. That was the only other issue that we identified
22 for time lost. 22 to be presented here, which is why I started the
23 And here's the relevant quote from my 23 argument with that statement.
24 perspective. "Without knowing what information was 24 THE COURT: Okay. That's all right.
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1 MS. LEADER: And I need to find which 1 In terms of the personal financial
2 document request that is, but I will. Sorry, Judge. 2 information, I mean, we've already made the arguments
3 THE COURT: It's all right. Well, I need to 3 that I think we need to make on that.
4 do that too, so we're going to go off the record for 4 THE COURT: And I think we know what the
5 just a minute. 5 attachments and schedules are. What are you referring
6 MS. LEADER: Okay. 6 to when you say "reports and disclosures"?
7 (Discussion had off the record.) 7 MS. LEADER: I don't -- it's -- I was trying
8 MS. LEADER: One is the tax returns. 8 to be all-encompassing because I don't know what his
9 THE COURT: September 20th. Off the record. 9 tax returns look like. So I'll -- if we get all -- if
10 (Discussion had off the record.) 10 we get the tax returns and the schedules, I think
11 THE COURT: Let's go back on the record. 11 that -- and attachments -- we've already got the W-2s
12 There are only two remaining issues 12 and the K-1s -- I think that's good.
13 with respect to the motion to compel that was filed by 13 THE COURT: Okay. Thank you.
14 plaintiffs, motion to compel production of documents on 14 MR. KIENZLER: Judge, it's really our
15 August 21st of this year, and that is with respect to 15 position on -- this document request is also more of
16 Document Request 1 and Document Request 29. 16 the same as we've heard already this afternoon, but I
17 Document 1 is for defendant's personal 17 do want to make a couple points.
18 tax returns with all attachments, schedules, and 18 The first is just with respect to the
19 reports and disclosures, including but not limited to 19 case law. I continue to believe that they have the
20 W-2s and K-1s for the years 2012 through to the 20 case law -- they're turning it on its head, Judge.
21 present. I think we've already heard about the W-2s 21 They're taking cases where plaintiffs are putting their
22 having been produced and the K-1s. 22 own income at issue and then refusing to answer
23 The objection notes what has been 23 discovery requests from a defendant and using them as
24 produced and then goes on to state, "Louis objects to 24 the basis for, in this case, the plaintiff putting the
Page 67 Page 69
1 producing his full personal tax return from 2012 to the 1 defendant's income at issue, a portion of it, and then
2 present because the request for his entire tax return 2 offensively saying, now that we've made an allegation
3 seeks information about Louis's personal finances that 3 against you, we get your complete personal -- personal
4 is neither relevant to plaintiffs' causes of action nor 4 information -- personal financial information.
5 reasonably likely to lead to the discovery of 5 I think that's wrong, and I think a
6 admissible evidence. 6 case that's been cited in the briefs actually gets it
7 Further, Louis objects to the extent it 7 right and comes out differently. That case is
8 seeks information protected from discovery by the 8 Jackson vs. N'Genuity, a case cited by plaintiff. It's
9 accountant privilege or any other applicable privilege 9 an Illinois federal case, 2010 WL 4928912. It's a 2010
10 protection or immunity." 10 case, and the holding in that case is plaintiff files a
11 Well, of course, we have to have the 11 lawsuit against defendants and asks for the defendants'
12 specific document really to evaluate the privilege 12 tax returns. The judge initially denies that discovery
13 issue, and you'd give me a privilege log if you needed 13 request as not relevant and -- for a number of reasons,
14 to do that. 14 orders the parties to go and talk about whether there
15 But what more would you like to say 15 are alternative ways to get more targeted information,
16 with respect to Request 1, Ms. Leader? 16 and the defendant in that case blew off all those
17 MS. LEADER: There is no privilege log, and 17 attempts.
18 I think counsel said there was -- they weren't 18 So then later on in the case, the judge
19 asserting the privilege. I've never seen a privilege 19 said -- based on the later, subsequently created
20 log, so let's put it that way. 20 records said basically, in effect, "I gave you a
21 I thought previously, in connection 21 chance. You didn't take me up on my offer. Now I'm
22 with the production request, they had said there were 22 going to order you to produce your tax returns because
23 no privilege issues, although they asserted them as 23 you hadn't in the interim worked with the plaintiff to
24 objections. 24 get more targeted information."
18 (Pages 66 to 69)
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1 We think that case -- the lesson from 1 I don't know what's been declared, and
2 that case controls this discovery dispute. Their 2 part of what the Hawkins case says is we're allowed to
3 claim -- I will continue to say -- does not place 3 see what's been declared, and so on those bases I think
4 Louis's financial information wholesale at issue in 4 that certainly the tax returns are discoverable; that
5 this case. That's why we've given them targeted pieces 5 the probative value outweighs any issues in terms of
6 of information, and that's why we've also asked them 6 confidentiality, and the confidentiality can be
7 repeatedly to identify other areas of information that 7 protected the same way we protected the net worth
8 they want. 8 confidentiality in terms of a two-tiered protective
9 Obviously -- it's obvious that they 9 order limiting it to attorneys' eyes and accountants'
10 haven't seen the tax returns, so they don't know what's 10 eyes only.
11 there, but I don't think that justifies the leap of 11 THE COURT: Okay. All right. Thank you for
12 them saying, because we don't know what's there, we 12 your argument.
13 can't articulate what else we need. I have never asked 13 I agree with plaintiffs that the tax
14 them to articulate by line or by category on a tax 14 returns are discoverable here. I don't think we're
15 return what types of information they want. I've asked 15 talking, for one thing, about wholesale discovery into
16 them to do it in broad brushstrokes, and so it's -- 16 personal issues. I will amend the request so that it
17 this is not a situation where I'm asking them to use, 17 will require production of defendant's personal tax
18 you know, 1040-EZ language and that because they failed 18 returns with all attachments and schedules just because
19 to do that I'm saying we don't have anything to talk 19 I think the following two -- that's vague, and I don't
20 about. 20 want there to be any ambiguity.
21 I'm asking them to make high-level 21 I understand the W-2s and K-1s for 2012
22 articulations of what they think is relevant in this 22 to the present have already been produced. Only the
23 case. They've refused to do that and choose -- instead 23 tax returns for 2012 to the present need be produced.
24 choosing to go after the tax return in its complete 24 This is limited in time, and I do believe, again, that
Page 71 Page 73
1 fashion. I don't think it's proper. I don't think his 1 there is a claim for punitive damages that is pending,
2 personal finances in wholesale fashion have been made 2 and there is plenty of case law that suggests that the
3 at issue in this case by their claims, and I don't 3 defendant's financial status is relevant once we've got
4 think given that -- given the limits of their claims 4 that particular claim pending. So that's Document
5 that it's proper for them to get wholesale, unfettered 5 Request 1.
6 access to his tax return. 6 Document Request 29 reads as follows:
7 THE COURT: All right. Thank you for your 7 "Net worth statements and supporting documentation
8 argument. 8 submitted to the Private Bank and Trust Company by or
9 It's your motion to compel, so I'll 9 on behalf of the defendant during the relevant time
10 give you the last word. 10 period." The objection -- in addition to general
11 MS. LEADER: Okay. Just briefly, Judge, 11 objections, Louis has objected because information
12 I think it's clearly relevant because it -- in terms of 12 about Louis's personal finances is neither relevant nor
13 excessive compensation allegations, in terms of the 13 reasonably likely to lead to the discovery of
14 allegations of corporate opportunities usurped, in 14 admissible evidence. Louis also objects because the
15 terms of understanding what Mr. Silver has realized 15 request is vague, ambiguous, overly broad, and unduly
16 from the corporate opportunities allegedly usurped, 16 burdensome.
17 which, again, we've never received any documents to 17 Finally, Louis objects to the extent
18 indicate that, and also because there are other 18 that it seeks privileged material, and of course, we'll
19 elements of his compensation, regardless of what 19 need to deal with that last objection at a later date.
20 counsel said in interrogatories, that are relevant like 20 Ms. Leader, do you want to get us
21 a Bentley that's being put through the business, like 21 started? Am I pronouncing your name wrong every time?
22 miss -- like his wife being compensated through the 22 MS. LEADER: Leader.
23 business in terms of some payroll information we've 23 THE COURT: Leader. I apologize.
24 seen. 24 MS. LEADER: No. It's okay.
19 (Pages 70 to 73)
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1 THE COURT: Okay. Go ahead. 1 MS. LEADER: Okay.
2 MS. LEADER: I think we've already argued 2 THE COURT: I agree with the objection
3 the net worth statement issue in the context of the 3 there.
4 subpoena, and I think for all of the same reasons it's 4 So I think we're going to strike the
5 relevant here. 5 words "supporting documentation." We're going to
6 THE COURT: Okay. 6 strike the words "on behalf of." And at that point
7 MR. KIENZLER: Judge, I would say -- I'm not 7 this would read "net worth statements submitted to the
8 going to retread that ground, but I do think that 8 Private Bank by defendant during the relevant time
9 there's differences between this document request and 9 period."
10 the subpoena request that merit a different outcome, 10 What argument do you want to make with
11 and that difference is the sort of catchall phrase, net 11 respect to the loans? Should this be limited to
12 worth statements and any -- anything else -- 12 certain loans? I mean, are we expecting the Private
13 THE COURT: Supporting documentation -- 13 Bank to go through every loan that -- I mean, we've
14 MR. KIENZLER: Right, right. So -- 14 seen just in our discussions a number of loans here.
15 THE COURT: -- could mean an awful lot. 15 There could be more.
16 MR. KIENZLER: -- I think that should come 16 MS. LEADER: Well, this is a -- this is a
17 out. I understand your ruling on the subpoena. I 17 request to Louis, though. So to the extent --
18 certainly -- I sort of, frankly, understand your ruling 18 THE COURT: Oh, I apologize.
19 on the subpoena to be based in part that the subpoena 19 MS. LEADER: Yeah.
20 was tied to loans that are in issue in the case. I 20 MR. KIENZLER: That's correct, your Honor.
21 thought that was an important point to your Honor. I'm 21 MS. LEADER: So we did target the loan --
22 not trying to put words in your mouth. This one has no 22 the net worth statements to the loans in terms of the
23 such limitation. 23 bank subpoena. But for Louis I think it's relevant
24 I'll quickly make the same points that 24 what he submitted during the relevant time period to
Page 75 Page 77
1 I've made. I don't think that simply by filing a 1 the bank subject to those two amendments or revisions.
2 complaint against Louis Silver that they're entitled to 2 THE COURT: Okay.
3 any net worth statement he has ever given to the 3 MR. KIENZLER: So, Judge, just to make my
4 Private Bank from 2012 to the present. For the same 4 point clear for the record, I understood your ruling
5 reasons that we don't believe his -- anything about his 5 with the subpoena to be -- the plaintiff has
6 personal finances is at issue in this case, we would 6 articulated here today that they want loan information
7 find -- we would object to this document request on 7 from the Private Bank to evaluate corporate
8 that basis. 8 opportunities that are at issue in this case, things of
9 So we really have two main arguments 9 that nature.
10 here. One, your Honor, we object to the overbroad sort 10 They included the net worth document
11 of qualification. We think that should come out of the 11 subpoena request because they were trying to
12 document request. Two, as a sort of threshold matter, 12 appropriate what a normal loan file would contain. I'm
13 we think that this document request is different from 13 not trying to puts words in anyone's mouth. I'm just --
14 the subpoena request. We think it's more broad. We 14 THE COURT: I think that's accurate, yeah.
15 think it's further afield from the allegations of the 15 MR. KIENZLER: -- sort of recapping my
16 complaint. 16 impression.
17 MS. LEADER: Well, your Honor, I will strike 17 I think this document request is
18 the "and supporting documentation," for the record. So 18 different. I think it's not tied to corporate
19 if we can get the net worth statements submitted to 19 opportunities in this case. I think it's tied to
20 Private Bank in the relevant time period, that should 20 Louis's general relationship with the Private Bank. I
21 suffice. 21 think for that reason this is a more blanket request,
22 THE COURT: Well, and now what about this 22 and I think it's overbroad.
23 language, "anything submitted on behalf of the 23 THE COURT: Well, I certainly appreciate the
24 defendant"? I think that is overbroad. 24 fact that that Document Request 10 and the subpoena was
20 (Pages 74 to 77)
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1 limited to specific loans, and this is not. You know, 1 get the transcript.
2 without knowing how much is out there, it's difficult 2 THE COURT: And that's a difficult thing
3 for me to say that this is unduly burdensome. 3 over the holiday. I understand.
4 You know what? At this point I'm going 4 Off the record for a minute.
5 to order that you respond to Request 29 as amended. So 5 (Discussion had off the record.)
6 net worth statements submitted to the Private Bank by 6 THE COURT: Back on the record, please.
7 the defendant Louis during the relevant time period, 7 The next date in this case will be
8 that being 2012 to present. And if it turns out that 8 Thursday, January 24th, at 9:00 o'clock in the morning
9 we're dealing with voluminous production here, 9 for status of pleadings and status of discovery, and by
10 either -- let me know, but that's not what I'm looking 10 December 3rd the attorneys will present the Court with
11 at right now. 11 a typewritten order that will reflect the Court's
12 MS. LEADER: If it's voluminous, we'll talk 12 ruling today.
13 about it too. I mean, I have no idea what's out there. 13 MR. KESSLER: Your Honor, that just gives us
14 THE COURT: Okay. 14 the weekend if it's Friday the 30th that we get the
15 MR. KORNAK: Your Honor, just so the record 15 transcript, and then Monday, the 3rd, you want the
16 is clear, with respect to the motion to compel directed 16 order.
17 to Louis vis-a-vis the production of net worth 17 THE COURT: Well, tell me how quickly you
18 statements and his tax returns, I assume that much like 18 could get me the order.
19 it was with respect to the subpoena that those will be 19 MR. KESSLER: Does Thursday, the 6th, work?
20 produced attorneys' eyes only and to her retained 20 MR. KIENZLER: Certainly. That's plenty of
21 consultants or accountants. 21 time.
22 THE COURT: Thank you for putting that on 22 MR. KESSLER: Thursday, the 6th,
23 the record. That will be the Court's order. 23 your Honor?
24 MR. KORNAK: Okay. 24 THE COURT: All right. Thursday, the 6th,
Page 79 Page 81
1 THE COURT: All right. So what remains to 1 is fine. Get me that order by Thursday, the 6th.
2 be accomplished today, if anything? Is there anything 2 MR. KESSLER: Thanks, Judge.
3 else that we need to look at today? We are getting 3 THE COURT: Okay. I thank you all for your
4 toward 4:00 o'clock, and I know you want to put this in 4 time today.
5 writing, but -- in the order. We're good? 5 MR. KESSLER: Thank you very much.
6 MS. LEADER: I think we're good. 6 MR. KIENZLER: Thank you.
7 THE COURT: Okay. So we need to set a date 7 THE COURT: Thank you to the court reporter
8 in January. 8 as well.
9 (Whereupon a sotto voce discussion 9 MS. LEADER: Thank you.
10 was had off the record.) 10 (End of proceedings.)
11 THE REPORTER: Are we off the record, 11
12 your Honor? 12
13 MR. KIENZLER: Judge, if we could just stay 13
14 on just for one second. 14
15 THE COURT: Sure. Go ahead. 15
16 MR. KIENZLER: We were here in April. We 16
17 had a similar hearing -- a lengthy hearing, and what we 17
18 did to write an order was get the transcript and submit 18
19 an order. I would propose doing that again today. 19
20 THE COURT: I don't have a problem with 20
21 doing that, but we're -- you're kind of tight on time. 21
22 You need to have that to me by -- can you do it by 22
23 December 1st? 23
24 MR. KORNAK: It's all dependent upon when we 24
21 (Pages 78 to 81)
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STATE OF ILLINOIS )
) SS:
COUNTY OF L A K E )
AU Th fil
I, LINDA M. GIUSEFFI, do hereby certify

TH e o w ing
that I am a Certified Shorthand Reporter doing business
EN rig as
in the County of Lake and State of Illinois; that I
reported by means of machine shorthand the testimony
TI na le alL
given at the foregoing Report of Proceedings; and that
C
the foregoing is a true and correct transcript of my
C cer tron ga
shorthand notes so taken as aforesaid.
e
O
I further certify that I am not counsel
PY tifie ica l te
for, nor in any way related to any of the parties to
l
this lawsuit, nor am I in any way interested in the

us
outcome thereof.
e
In testimony whereof, I have hereunto

c
set my hand and affixed my notarial seal this 28th day

d
R
of November, 2018, A.D.

e
E- ly s hno
Tr ign lo
______________________________
e
an e gy
l
LINDA M. GIUSEFFI, CSR

sc d
Notary Public, Lake County, IL

rip
CSR License No. 084-002198.

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L&L REPORTING SERVICE, INC.

(847) 623-7580
.
22 (Page 82)
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EXHIBIT G
IN THE CIRCUIT COURT OF THE NINETEENTH JUDICIAL CIRCUIT
JOSEPH S. SILVER and MICHELLE S. SILVER, as )

independent co-executors of the estate of Nathan Silver, )
and JOSEPH S. SILVER and MICHELLE S. SILVER, )
as Co-Trustees of the NATHAN J. SILVER TRUST, )
individually and derivatively on behalf of LOGAN )
SQUARE ALUMINUM SUPPLY, INC., SILVER )
REAL ESTATE MANAGEMENT AND )
DEVELOPMENT CORP., 2470 N. MILWAUKEE )
CORP., SILVER DEVELOPMENT, LLC, and )
SILVER-TOUHY, LLC, Illinois corporations, )
)
Plaintiffs, )
)
v. ) No. 17 CH 000729
)
LOUIS SILVER, individually and as Trustee of the )
LOUIS SILVER DECLARATION OF TRUST, )
AMANDA NADINE SILVER TURNER TRUST and )
the ROSLYN RUTH SILVER TURNER TRUST, 4K )
LOGAN SQUARE PARTNERS, LLC, SILVER- )
HUBBARD, LLC., and 2501 N. PULASKI, LLC, )
)
Defendants, )
)
And )
)
LOGAN SQUARE ALUMINUM SUPPLY, INC., )
an Illinois corporation, SILVER REAL ESTATE )
MANAGEMENT AND DEVELOPMENT CORP., 2470 )
N. MILWAUKEE CORP., SILVER DEVELOPMENT, )
LLC, and SILVER-TOUHY, LLC, Illinois corporations )
)
VERIFIED SECOND AMENDMENT ADDING AND SUBSTITUTING PARTIES

AND ADDING COUNTS VII THROUGH XI TO THE
VERIFIED COMPLAINT FOR INJUNCTIVE AND OTHER RELIEF
NOW COME Plaintiffs JOSEPH S. SILVER and MICHELLE S. SILVER, as
independent co-executors of the Estate of Nathan Silver, and JOSEPH S. SILVER and
MICHELLE S. SILVER, individually and as Co-Trustees of the NATHAN J. SILVER TRUST,
1
by their attorneys Laurie E. Leader of the Chicago-Kent Law Offices, Jerald A. Kessler, and
Michael Lee Tinaglia, and for their Verified Second Amendment Adding and Substituting
Parties and Adding Counts VII Through XI to the Verified Complaint for Injunctive and Other
Relief (“Verified Complaint”), they state as follows:
BACKGROUND
1-92. Plaintiffs reallege and incorporate by reference Paragraphs 1-92 of the Verified
Complaint which Plaintiff NATHAN SILVER (“NATHAN”) filed with this Court on May 17,
2017, except that the following Paragraphs of the Verified Complaint are amended, as referenced
below:
a. Paragraph 1 is amended to reflect that, during the relevant time period until the
date of his death, NATHAN SILVER was the Trustee and Beneficiary of the NATHAN J.
SILVER TRUST, which held his shares in the Nominal Defendants. These shareholdings
continue to be held in that Trust for the benefit of NATHAN’s heirs, as specifically set forth
below.
b. Paragraph 2 is amended to reflect that, on information and belief, LOUIS
SILVER’s shareholding in the Nominal Defendants is held in the LOUIS SILVER
DECLARATION OF TRUST and that LOUIS SILVER is the Trustee and Beneficiary of that
Trust.
c. Paragraphs 4 and 5 are, likewise, amended to reflect that the shareholdings of
NATHAN and LOUIS SILVER are held in their respective trusts, as noted above.
d. Paragraphs 8, 9, 20 and 42 are amended to reflect that ROBERT KNABE and
SANFORD BOKOR are no longer “Defendants” pursuant to their voluntary dismissal from this
action. Similarly, Paragraphs 47 through 54 of the Verified Complaint (the Aiding and Abetting
2
Count against ROBERT KNABE and SANFORD BOKOR) are stricken based on their voluntary
dismissal.
e. The second sentence of Paragraph 31 is amended to read: Plaintiff is informed
and believes that until 2013, all real estate purchased for Studio 41 locations was purchased by
LOGAN SQUARE ALUMINUM, SILVER REAL ESTATE MANAGEMENT, SILVER-
HUBBARD, LLC and/or 2470 N. MILWAUKEE CORP.
f. Paragraph 35 is amended to read that: In August 2013, it was publicly announced
that 4K Diversey Partners purchased the former Marshall Field’s/Macy’s Warehouse located at
4000 W. Diversey in Chicago, Illinois. On information and belief, at the time of this purchase,
LOUIS SILVER , Aaron Paris and Paul Fishbein each owned an equal interest in 4K Diversey
Partners. Studio 41 was and is a major tenant of the premises.
93. On January 2, 2018, NATHAN died suddenly. Two of his children, JOSEPH S.
SILVER and MICHELLE S. SILVER, were subsequently appointed independent co-executors of
NATHAN’s Estate and are Co-Trustees and beneficiaries of the NATHAN J. SILVER TRUST.
NATHAN’s third child – Rochelle Silver-Litberg – is also a Beneficiary of the Trust.
94. On January 30, 2018, JOSEPH S. SILVER and MICHELLE S. SILVER, as
independent co-executors of the Estate of Nathan Silver, were substituted as parties plaintiff in
this action.
95. Plaintiffs JOSEPH S. SILVER and MICHELLE S. SILVER and Rochelle Silver-
Litberg are the sole children and heirs of NATHAN SILVER and beneficiaries of his Estate and
the NATHAN J. SILVER TRUST, which holds a minority ownership interest in: LOGAN
SQUARE ALUMINUM SUPPLY, INC. (“LSA” or “LOGAN SQUARE ALUMINUM’),
SILVER REAL ESTATE MANAGEMENT AND DEVELOPMENT CORP. (“SREM” or
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“SILVER REAL ESTATE MANAGEMENT”), 2470 N. MILWAUKEE CORP., SILVER
DEVELOPMENT, LLC, and SILVER-TOUHY, LLC (collectively, the “Nominal Defendants”).
96. In addition, Plaintiff JOSEPH S. SILVER is a director in LSA, SREM, and 2470
N. MILWAUKEE CORP. Significantly, JOSEPH S. SILVER has not been involved in the
business of these corporations and despite his repeated requests has not been provided with
material information related to these businesses, as more fully set forth below.
97. Since NATHAN’s death, his heirs have not received any compensation, dividends
or benefits arising from the NATHAN J. SILVER TRUST’s ownership of shares of stock in the
Nominal Defendants or their relationship to the Nominal Defendants. NATHAN received
comparatively limited compensation and benefits arising from the NATHAN J. SILVER
TRUST’s ownership of shares of stock in the Nominal Defendants and his relationship to the
Nominal Defendants prior to his death. Defendants abruptly terminated NATHAN’s
compensation payments upon NATHAN’s death without seeking relief from the temporary
restraining order entered at the outset of this lawsuit and knowing the hardship the abrupt
cessation of compensation would cause to: Rochelle and her children, who NATHAN then
supported; JOSEPH S. SILVER; and MICHELLE S. SILVER. Currently, NATHAN’s Estate
receives a total of only $24,000 in annual dividends from LSA. It receives no dividends or other
distributions from any of the other Nominal Defendants. Significantly, the $24,000 in dividends
received is much less than the taxes owed on certain K-1 paper or deemed distributions
“received” from the other Nominal Defendants but from which Plaintiffs received no actual
income.
RESTATEMENT OF PARTIES
98. NATHAN SILVER was an officer, director and his Trust was a one-third (1/3)
shareholder of LSA. Until April 25, 2017, NATHAN was an employee of LSA. NATHAN’s
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Trust also owned a one-third (1/3) share in SREM and NATHAN was a director and officer of
that company. His Trust held similar interests in 2470 N. MILWAUKEE CORP. and in
SILVER-TOUHY, LLC, and NATHAN was an officer and director of each of the foregoing
Nominal Defendants. SILVER DEVELOPMENT, LLC, is also a Nominal Defendant in this
matter. On information and belief, the Trusts of NATHAN and Defendant LOUIS SILVER each
own 12.5 percent of SILVER DEVELOPMENT, LLC. The remaining 75 percent of SILVER
DEVELOPMENT, LLC, is owned by LSA. Although Plaintiffs JOSEPH S. SILVER and
MICHELLE S. SILVER were substituted as Plaintiffs on behalf of NATHAN’s Estate on
January 30, 2018, and remain, along with Rochelle, beneficiaries of the NATHAN J. SILVER
TRUST, which owns shares in each of the Nominal Defendants, none of them has been
appointed an officer of LSA, SREM, 2470 N. MILWAUKEE CORP., SILVER
DEVELOPMENT, LLC, and SILVER-TOUHY, LLC.
99. On May 12, 2018, JOSEPH S. SILVER was named as a director of LSA, SREM
and 2470 N. MILWAUKEE CORP., along with Defendant LOUIS SILVER and LSA’s Chief
Financial Officer, Barry Cohodes. Despite that appointment and inconsistent with it, JOSEPH:
(a) has not received material information about the Companies; (b) has not been consulted about
or provided with information about any of the Company’s business decisions; (c) has not been
called to an annual meeting of directors for any of the Companies and has not otherwise
approved or consented to the Companies’ actions and decisions; and (d) has not been provided
with critical documents requested to learn critical information about the Companies’ financial
status and business. Thus, the same lack of transparency and failure and refusal to consult with,
or to provide material information and documents about the Nominal Defendants experienced by
NATHAN now extends to his son, JOSEPH S. SILVER.
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100. Defendant LOUIS SILVER (“LOUIS”) is the President and a director and his
DECLARATION OF TRUST is a one-third (1/3) shareholder of LSA, SREM, and 2740 N.
MILWAUKEE CORP. He is also the Managing Member and a director of SILVER-TOUHY,
LLC and SILVER DEVELOPMENT, LLC. LOUIS resides within this Judicial District at 130
Rue Forest, City of Lake Forest, Lake County, Illinois.
TRUST and the ROSLYN RUTH SILVER TURNER TRUST. On information and belief, the
remaining one-third (1/3) of the shares in LSA, SREM, 2470 N. MILWAUKEE CORP. and
SILVER-TOUHY, LLC. (not held in NATHAN’s and LOUIS’s Trusts), are held in these two
trusts for the benefit Amanda Nadine Silver (“Amanda”) and Roslyn Ruth Silver Turner
(“Roslyn”), the children of Bathshevi (“Betty”) Iva Silver Turner, the deceased sister of
NATHAN and LOUIS. Collectively, Amanda and Roslyn are referred to herein as the “Trust
Beneficiaries”.
102. Nominal Defendant LSA is an Illinois corporation – formerly known as Logan
Square Building Material Supply Inc. – with headquarters at 2500 N. Pulaski Road, Chicago,
Illinois. As previously stated, said Defendant has several divisions operating under assumed
Studio 41. All of these are collectively designated as “LSA” herein, unless otherwise indicated.
103. A portion of LSA’s business, known as “Remodelers Supply Center” and
“ClimateGuard Windows,” operates and sells from a window and door showroom. LSA’s
products also include, without limitation, cabinets and vanities, medicine cabinets and mirrors,
faucets and fixtures, sinks, tubs, soakers and baths, whirlpools, Jacuzzi and airbaths, steam and
sauna systems, shower systems, toilets and bidets, countertops, and tile and flooring products, as
6
well as kitchen and bath accessories, flooring and ornamental railings and fencing. LSA
distributes and sells these products through its kitchen and bath showrooms operated under the
assumed name of “STUDIO 41.” There are various STUDIO 41 locations in Arizona and
Illinois, including a showroom located in Highland Park, Lake County, Illinois.
104. SREM and 2470 N. MILWAUKEE CORP. own and/or manage various
properties, including properties in which the STUDIO 41 and other LSA offices, showrooms and
warehouses are located.
105. SILVER DEVELOPMENT, LLC, owns the ground lease to a property commonly
known as Sherman Park Plaza.
106. SILVER-TOUHY, LLC, owns the property located at Cicero and Touhy Avenues
in Lincolnwood, Illinois, which houses a Studio 41 showroom and warehouse.
107. Until 2013 and 2014, when LOUIS purchased a portion of 225 W. Hubbard via
SILVER-HUBBARD, LLC, and a portion of the former Marshall Field’s/Macy’s Warehouse
property through 4K Diversey Partners, LLC and 4K LOGAN SQUARE PARTNERS, LLC, all
real estate leased to LSA was owned by one of the Silver family entities in which NATHAN had
(and his heirs now have) an interest under the NATHAN J. SILVER TRUST. Following these
acquisitions, LOUIS – directly or indirectly, through the referenced entities – became LSA’s
landlord at 225 W. Hubbard and at the former Marshall Field’s/Macy’s Warehouse in Chicago.
The former Macy’s/Marshall Field’s Warehouse includes 4000 W. Diversey and several adjacent
parcels in the City of Chicago.
ADDITIONAL FACTS LEADING UP TO THIS AMENDMENT
108. Since this lawsuit was first filed, two other acquisitions on LOUIS’ part have been
identified as further acts of self-dealing, including LOUIS’ acquisition of that portion of the
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Macy’s Warehouse leased to LSA (under the guise of 4K LOGAN SQUARE PARTNERS, LLC)
and a parking lot at 2501 N. Pulaski (under the guise of 2501 N. PULASKI, LLC).
109. On October 18, 2018, Plaintiffs’ counsel learned, for the first time, by reading an
October 2, 2018 article in Crain’s Chicago Business, that LOUIS and his two unrelated business
associates (Aaron Paris and Paul Fishbein) – through one or more of the entities which they
owned and created – sold a portion of the former Marshall Field’s/Macy’s Warehouse
(subsequently renamed “The Fields”) for an undisclosed price. That sale was effected without
notice to the parties, despite allegations in the Verified Complaint that LOUIS acquired the
former Marshall Field’s/Macy’s Warehouse (along with Aaron Paris and Paul Fishbein under the
guise of 4K Diversey Partners, LLC) as an act of self-dealing and in usurpation of certain
corporate opportunities, and despite a temporary restraining order prohibiting the Defendants
from selling or transferring real estate during the pendency of this action.
110. As set forth in the Verified Complaint, upon exercising complete control of the
Nominal Defendants in 2008 until April 25, 2017, LOUIS increasingly oppressed NATHAN by
and stock interest in, LSA. In April 2017, LOUIS had LSA’s accountant – Sanford Bokor –
convey an offer to NATHAN to buy out his interests in the nominal Defendants and other Silver
family holdings, When NATHAN requested to see Company books and records thereafter, he
was denied access to them, the offer was withdrawn and he was abruptly terminated on April 25,
2017. Similar acts of shareholder oppression have continued against Plaintiffs, as more
specifically set forth below.
111. These acts of oppression and others, including Defendants’ failure and refusal to
provide JOSEPH S. SILVER with material information about the Nominal Defendants’ business,
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access to Company books and records, and financial information upon request, despite
JOSEPH’s director status and entitlement to the information, as well as the adversarial nature of
and this litigation, underscores the futility of making a demand on the Board of Directors of the
Nominal Defendants because of the Board majority’s unwillingness to correct the foregoing
inequities and unlawful actions.
112. During the same time period that NATHAN’s income was significantly reduced
in the years before his death, LOUIS’ LSA income more than quadrupled. For tax year 2017,
LOUIS’ W-2 withholding alone from LSA exceeded three times NATHAN’s W-2 income from
that Company and was more than NATHAN’s income from all sources (including all real estate
“distributions” from Silver family holdings). This income disparity and related shareholder
oppression has become even more pronounced since NATHAN’’s death.
113. Most recently, this oppression resulted in the Plaintiffs incurring significant tax
liability (in excess of $300,000.00) related to NATHAN’s 2017 tax return based on phantom
distributions “passed through” to NATHAN’s Trust and Estate from Defendants LSA, SREM,
2470 N. MILWAUKEE CORP., SILVER DEVELOPMENT LLC, and SILVER-TOUHY, LLC.
In all previous tax years, one or more of the Nominal Defendants made a (seemingly arbitrary)
distribution to cover NATHAN’s tax liability related to this phantom income. That practice
ended in tax year 2017, without notice to NATHAN or his heirs.
114. As a result, as more specifically set forth below, Plaintiffs learned of that liability
– for the first time – when their accountant presented them with NATHAN’s 2017 tax return for
signature in early October 2018. They had less than one week to have funds available to pay the
$302,495.00, which included penalties incurred for late payment, because NATHAN and his
heirs assumed – based on past practice and court orders – that NATHAN’s tax liability would
9
continue to be paid by the Companies through a distribution, and that no additional taxes would
be owed personally.
115. Neither LOUIS nor the Nominal Defendants have taken any action to cure the tax
inequities resulting from distributions on the part of the Nominal Defendants that benefit LOUIS
to the detriment of NATHAN’s heirs, individually and under the NATHAN J. SILVER TRUST.
As a result, the tax liabilities incurred in 2017 are likely to continue for 2018 and subsequent tax
years and cause Plaintiffs irreparable harm unless a change in the manner of the distributions is
effected to equitably compensate the Trust beneficiaries, through actual distributions to, at a
minimum, cover all of the tax liability resulting from the phantom distributions.
116. LOUIS’ previous failure to share corporate books and information with
NATHAN (see Verified Complaint ¶¶ 36, 37, 40, 70, 86) has continued with respect to
NATHAN’s heirs since NATHAN’s death. As a director of LSA, SREM and 2470 N.
MILWAUKEE CORP., JOSEPH S. SILVER requested access to information and records never
received in a series of communications which ended with counsel for the Nominal Defendants
contacting JOSEPH S. SILVER directly on October 2, 2018, to place restrictions on the use of
any information or documents to be produced in the future. The requested documents have still
not been produced.
117. Since his appointment as a director of Defendants LSA, SREM and 2470 N.
MILWAUKEE CORP. in May 2018, JOSEPH S. SILVER has received no documents or
information about material corporate matters. Nor has he been consulted or asked to vote on
significant issues as a director or shareholder of the Companies. Despite bylaws requiring that
LSA and SREM hold annual meetings in May and June each year, no meeting for either
Company was held at that time or any time since.
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118. Despite a significant increase in LSA’s gross receipts between 2008 and the time
of his death, NATHAN failed to receive dividends in any of these years but one. As set forth in
the original Verified Complaint, NATHAN was never consulted or asked to vote on whether
dividends should be declared, nor was he advised why the Company failed to declare them. This
pattern has continued since his death, with his Trust currently receiving only a total of
$24,000.00 in annual dividends.
COUNT VII
SHAREHOLDERS’ DERIVATIVE ACTION
ON BEHALF OF NATHAN’S HEIRS
120. Plaintiffs JOSEPH S. SILVER and MICHELLE S. SILVER, as Co-Executors of
the Estate of NATHAN SILVER and as Co-Trustees of the NATHAN J. SILVER TRUST,
reallege and incorporate by reference Paragraphs 1 through 119 above as if more fully set forth
herein.
121. Plaintiffs bring this action pursuant to 735 ILCS 5/2-209(a)(1) and (2) and 805
ILCS 5/7.80, as a shareholders’ derivative action on behalf of the Nominal Defendants against
Defendant LOUIS SILVER, seeking to remedy Defendants’ oppression of Plaintiffs and
breaches of their fiduciary duties, self-dealing, abuses of control, and unjust enrichment through
LSA, SREM, 2470 N. MILWAUKEE CORP., SILVER DEVELOPMENT, LLC, and SILVER-
TOUHY, LLC.
122. Section 12.56 of the Illinois Business Corporation Act provides, in pertinent part:

(a) In an action by a shareholder in a corporation that has no shares listed on a
national securities exchange or regularly traded in a market maintained by one
or more members of a national or affiliated securities association, the Circuit
Court may order one or more of the remedies listed in subsection (b) if it is
established that: …(3) The directors or those in control of the corporation
have acted, are acting, or will act in a manner that is illegal, oppressive, or
fraudulent with respect to the petitioning shareholder whether in his or her
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capacity as a shareholder, director, or officer; or (4) The corporation assets are
being misapplied or wasted.
123. LOUIS, individually and as the de facto sole director of the Nominal Defendants,
and the Nominal Defendants – by their direct assistance and acquiescence in LOUIS’ actions –
are in control of said Companies and have acted, are acting, and will continue to act, in a manner
that is illegal, oppressive, or fraudulent with respect to LSA, SREM, 2470 N. MILWAUKEE
CORP., SILVER DEVELOPMENT, LLC, SILVER-TOUHY, LLC, and the Plaintiffs, as
specifically set forth herein.
124. In response to his written request for certain documents and information and for a
directors’ meeting in late August 2018, JOSEPH S. SILVER received an email from Barry
Cohodes (LSA’s CFO and a director of that Company) suggesting that he, JOSEPH, and LOUIS
meet informally, to update JOSEPH S. SILVER on “the various family owned entities” and to
discuss “current and anticipated changes to the business.” In response, JOSEPH S. SILVER
renewed his request for documents before any meeting. He also requested identification of the
corporate structure as well as the compensation paid to executives, directors, and officers and
identification of the “current and anticipated changes” referenced.
125. In response to JOSEPH S. SILVER’s renewed request, no information was
provided. Instead – as noted above – counsel for Nominal Defendants LSA and SREM, sent
JOSEPH a letter dated October 2, 2018. Plaintiffs’ counsel was not even copied on the letter.
126. The October 2, 2018, letter conditioned providing documents and information to
JOSEPH S. SILVER under conditions not permitted under the Illinois Business Corporation Act
and contrary to his duties as director. The letter states in part:
“Importantly, all agendas, minutes, and financial information provided to you will be
provided solely in your capacity as a director of, and fiduciary to, the company. As a
12
fiduciary you are obligated to treat this information as confidential and it is imperative
that you acknowledge and agree to treat this material as confidential and use it
exclusively to further the proper purposes of a board member. To be clear, this does not
include using confidential director information in the litigation you have instituted
against the companies. I am requesting that you sign and return a copy of this letter
confirming your acknowledgement and agreement that any information provided to you
as a director of the company will not be used in the pending litigation, shared with any
third parties, or used for any purpose other than execution of your duties and
responsibilities as a board member of Logan Square Aluminum Supply, Inc., Silver Real
Estate Management and Development Corp., and 2470 North Milwaukee Corp.”
(Emphasis added).
127. Not only is the foregoing in violation of Illinois’ ethical rules, but it is an act of
shareholder oppression and places restrictions on JOSEPH S. SILVER not permitted under the
Business Corporation Act. 805 ILCS 5/7; 805 ILCS 5/12.26. Based on Plaintiffs’ information
and belief and the factual foundation on which this lawsuit is based, JOSEPH S. SILVER may
have a fiduciary duty as director to seek third-party consultations regarding one or more of the
Nominal Defendants.
128. As a direct and proximate result of Defendant LOUIS SILVER’s unlawful
conduct and actions as alleged herein, the Nominal Defendants have sustained – and continue to
sustain – significant damages.
129. As shareholders of the Nominal Defendants, Plaintiffs have the right to examine
the books and records of these Companies pursuant to the Illinois Business Corporation Act, 805
ILCS 5/7.75. Defendants have denied them that right under the circumstances stated.
130. JOSEPH S. SILVER is further entitled to receive material information about the
business and financials of LSA, SREM, and 2470 N. MILWAUKEE CORP., because of his
position as a director of these Companies. On this basis, too, the actions of Defendants, and each
of them, in failing and refusing to disclose such information and in failing and refusing to make
corporate books and records and material financial information available to JOSEPH S. SILVER
13
is unlawful and potentially exposes him to actual and potential liabilities in his capacity as a
director of the Companies.
upon a finding that the “directors or those in control of the corporation have acted, are acting, or
shareholder whether in his or her capacity as a shareholder, director, or officer” or that
“corporation assets are being misapplied or wasted.” 805 ILCS 5/12.56(a)(3)-(4).
protection for those who, like Plaintiffs, are not in control. See 805 ILCS 5/7.
133. To further protect non-controlling shareholders, the Illinois Business Corporation
Act recognizes the possibility of oppression by “directors or those in control of
the corporation.” 805 ILCS 5/12.56(a)(3). As more specifically, set forth below, LOUIS’ acts are
oppressive under Illinois law as to Plaintiffs and to other shareholders of the Nominal
Defendants.
134. As previously stated, until 2017, the Companies made distributions or other
payments to NATHAN to cover his personal tax liability arising out of the phantom income
reported for him. Even after NATHAN’s employment was terminated in early 2017, such
distributions were made by one or more of the Nominal Defendants on NATHAN’s behalf to
cover his personal 2016 tax liability.
135. As previously stated, on or about the date that JOSEPH S. SILVER received
NATHAN’s 2017 state and federal income tax returns (which were on extension), when he
14
learned – for the first time – that the Companies made no distributions or other payments to
cover the taxes on NATHAN’S 2017 phantom income, which exceeded his W-2 and other
income for that year. NATHAN and his Trust and Estate received no benefit from the phantom
income, and they were never given the option of what to do with it or how to treat it for income
tax purposes and, in fact, incurred significant tax liability as a result. As a result, Plaintiffs have
sustained irreparable harm and will continue to do so unless the current practice is discontinued.
136. In 2017, NATHAN’s federal return required an additional tax payment of
$273,126 (which included a penalty of $5,558.00) and an additional Illinois income tax payment
of $29,369.00 (including a penalty of $3,965.00). NATHAN’s Estate had to find a total of
$302,495.00 to make the tax payments by the October 15th filing date. As previously stated, prior
to 2017, one or more of the Companies made distributions to cover NATHAN’s individual tax
liability.
137. Not only did LOUIS SILVER and the Nominal Defendants fail to give Plaintiffs
notice that they had discontinued the practice of covering NATHAN’s personal income tax
liability on the phantom income, but – to add insult to injury – NATHAN and the Plaintiffs
received no benefit and a significant detriment including, without limitation, tax penalties as a
result. Only LOUIS SILVER had the income to benefit from the write-offs that resulted.
138. LOUIS SILVER continues to take excessive compensation of several million
dollars annually to the peril of Plaintiffs and several of the Nominal Defendants. Based on a
combined total of $24,000.00 in annual dividends paid to NATHAN’s Estate, the foregoing
practice must be immediately discontinued and distributions must be made to cover the talk
liability resulting from the phantom distributions. If this practice is allowed to continue
unchecked, it will result in irreparable harm to Plaintiffs unless, at a minimum, their resulting tax
15
liability is paid by the Companies; otherwise, in return for $24,000.00 per year paid to
NATHAN’s Estate, Plaintiffs will have to pay income taxes on hundreds of thousands of dollars
of phantom income. The significant harm to Plaintiffs in requiring them to pay the $302,495.00
in 2017 taxes and penalties incurred because of Defendants’ failure to maintain the status quo
and cover NATHAN’s income tax liability on the phantom income is shared by Defendants,
jointly and severally.
139. As a direct and proximate result of LOUIS’ unlawful conduct and actions as
alleged herein, LSA, SREM, and 2470 N. MILWAUKEE CORP. have sustained – and continue
to sustain – significant damages.
140. Plaintiffs, each of them, have no adequate remedy at law, and are suffering and
continue to suffer irreparable harm as a result of Defendants’ unlawful acts and omissions
specifically set forth above.
WHEREFORE, Plaintiffs and the Nominal Defendants, and each of them, demand
judgment as follows against Defendant LOUIS and in favor of Plaintiffs, LSA, SREM, 2470 N.
MILWAUKEE CORP., SILVER DEVELOPMENT, LLC and SILVER-TOUHY, LLC:
A. For extraordinary equitable and/or injunctive relief as permitted by law, equity and
state statutory provisions sued hereunder including all of the provisions of subsection (a) of
Section 12.56 of the Business Corporation Act, including the imposition of punitive damages and
the forfeiture of all excessive compensation paid to LOUIS, and repayment of all unjust
enrichments and attorneys’ and accountant fees that the Companies paid and other remedies, as
appropriate, contemplated in subsection (b) of Section 12.56 the Act including, without
limitation “(3) [t]he removal from office of any director or officer; (4) [t]he appointment of any
individual as a director or officer; (5)[a]n accounting with respect to any matter in dispute;
16
(6)[t]he appointment of a custodian to manage the business and affairs of the corporation to serve
for the term and under the conditions prescribed by the court; (7)[t]he appointment of a
provisional director to serve for the term and under the conditions prescribed by the court;
(8)[t]he submission of the dispute to mediation or other forms of non-binding alternative dispute
resolution; (9)[t]he payment of dividends; (10) [t]he award of damages to any aggrieved party;
(11)[t]he purchase by the corporation of one or more other shareholders of all, but not less than
all, of the shares of the petitioning shareholder for their fair value and on the terms determined
under subsection (a); or (12) [t]he dissolution of the corporation if the court determines that no
remedy specified in subdivisions (1) through (11) or other alternative remedy is sufficient to
resolve the matters in dispute;”
Defendants;
C. For Plaintiffs’ costs and disbursements of the action, including their reasonable
attorneys’ fees, accountants’ and experts’ fees, costs, and expenses; and
COUNT VIII
143. Plaintiffs re-allege and incorporate paragraphs 1–142 above, as though fully set
forth herein.
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144. As a shareholder or member, director and officer of the Nominal Defendants,
LOUIS owes fiduciary duties of loyalty, honesty, good faith, and due care, and is required to act
in the best interest of said Companies and their shareholders or members.
145. LOUIS breached his fiduciary duties to each of the Nominal Defendants and
Plaintiffs by engaging in the following actions, among others, for his benefit and to the detriment
of these Companies and the Plaintiffs (and to NATHAN, before them): (a) diminishing
NATHAN SILVER’s duties and responsibilities in LOGAN SQUARE ALUMINUM and
ultimately terminating him as an employee of that Company and thereby placing Plaintiff at risk
without wages or health insurance, and continuing to deprive Plaintiffs of their just compensation
following NATHAN’s death; (b) failing and refusing to share information with Plaintiffs
following NATHAN’S death, (c) failing and refusing to consult with Plaintiffs or to otherwise
provide them with critical information regarding the assets, liabilities, profitability and value of
the Corporate Defendants and subjecting them to tax liability without just compensation to their
benefit, (d) failing and refusing to provide Plaintiffs with information about real estate
acquisitions for new Studio 41 locations and, on information and belief, purchasing some of
those locations with his own funds alone or with others outside of the Nominal Defendants and
then leasing that property, in whole or in part, back to LSA d/b/a Studio 41 for his own account
compensation while not paying distributions or dividends to Plaintiffs or paying them nominal
dividends and/or distributions without regard to their interest in the Companies, (f) on
information and belief, pledging assets of one or more of the Company or otherwise incurring
corporate debt for his own benefit to the detriment of the Companies and their shareholders, (g)
denying Plaintiffs the ability to inspect the books and records of the Companies and otherwise
18
failing to disclose to Plaintiffs material information about the Companies’ financial picture, and
(h) performing, allowing, or aiding and abetting other acts of waste, misuse, and self-dealing
involving the Companies’ assets.
146. LOUIS’ actions were in bad faith, dishonest and in his own self-interest. Such
actions demonstrated conscious indifference to the consequences to the Nominal Defendants and
their shareholders, and with reckless indifference to, and in willful and wanton disregard for the
interests and rights of said Companies and their shareholders.
147. As a result of LOUIS’ breaches of fiduciary duties, the Nominal Defendants and
their shareholders have sustained – and will continue to sustain – substantial damages.
SILVER:
A. For actual and compensatory damages suffered by Plaintiffs and the Companies
as a result of LOUIS’ wrongful conduct in an amount far in excess of $50,000;
and in favor of Plaintiffs for punitive damages;
C. Imposing a constructive trust in favor of Plaintiffs on all rights, benefits, money,
full amount of the injury and harm to Plaintiffs and the Companies caused by Defendants, with a
full accounting therefor;
behalf of LOGAN SQUARE ALUMINUM, SILVER REAL ESATE MANAGEMENT, 2740 N.
19
MILWAUKEE CORP., SILVER DEVELOPMENT, LLC, and SILVER-TOUHY, LLC. and
E. Removing LOUIS as an officer, director and/or managing member of the Nominal
Defendants;
F. Awarding Plaintiffs their attorney’s fees and costs; and
COUNT IX
UNJUST ENRICHMENT
148. Plaintiffs re-allege and incorporate by reference and Paragraphs 1 through 147
149. By their wrongful acts and omissions, Defendant LOUIS SILVER was unjustly
enriched at the expense of, and to the detriment of the Nominal Defendants, LOGAN SQUARE
ALUMINUM, SILVER REAL ESTATE MANAGEMENT, 2470 N. MILWAUKEE CORP.,
SILVER DEVELOPMENT, LLC, and SILVER-TOUHY, LLC. and the Plaintiffs.
150. Plaintiffs, individually and as Co-Trustees of the NATHAN J. SILVER TRUST
and as representatives of the Nominal Defendants, seek restitution from LOUIS SILVER and
further seek an order of this Court disgorging all profits, benefits and other compensation
obtained by each of these Defendants, by and through their wrongful conduct and fiduciary
breaches.
SILVER:
20
A. For the amount of damages, including tax liabilities incurred and paid, that were
sustained by Plaintiffs and the Nominal Defendants, and each of them, as a result of Defendant’s
breaches of fiduciary duties, waste of corporate assets and unjust enrichment;
B. Granting restitution from Defendant LOUIS SILVER, and requiring him to
disgorge all profits, benefit, fees and other compensation obtained through his wrongful conduct
and fiduciary breaches.
C. Awarding to Plaintiffs the costs and disbursements of the action, including
reasonable attorneys’ fees, accountants’ and experts’ fees, costs, and expenses; and
F. Granting such other and further relief as the Court deems equitable and just.
COUNT X
ACCOUNTING
152. As a result of Defendant LOUIS SILVER’s breaches of fiduciary duties –
including Defendant’s failure and refusal to provide Plaintiffs with the following financial
information and documents among others – profit and loss statements, closing documents, deeds,
leases, audited and unaudited financial statements, executive compensation information,
corporate tax returns and loan documents – LOGAN SQUARE ALUMINUM, SILVER REAL
ESTATE MANAGEMENT, 2470 N. MILWAUKEE CORP., SILVER DEVELOPMENT, LLC,
and SILVER-TOUHY, LLC, and the Plaintiffs have been damaged – and continue to suffer
damages and injuries – the full extent to which remains unknown.
153. Plaintiffs, therefore, demand an accounting to be made to allow the Companies
and their minority shareholders, including the Plaintiffs, to ascertain the full amount of damages
21
and injuries they suffered as a result of Defendant’s misconduct as specifically alleged herein.
Such an accounting is further warranted under Section 12.56(b) of the Illinois Business
Corporation Act.
WHEREFORE, Plaintiffs pray for judgment in their favor and against Defendants, and
each of them:
A. Directing them to account for all damages caused by them and all profits and
special benefits, and other unjust enrichment each of them obtained as a result of their unlawful
conduct including all salaries, bonuses, fees, stock awards, options, monies and other
compensation and imposing a constructive trust thereon;
B. Award Plaintiffs their attorney’s fees and costs; and
C. For such other and further relief as this Court deems equitable and just.
COUNT XI
INJUNCTION
155. Plaintiffs possess a clearly ascertainable right or interest which needs protection.
156. Plaintiffs have suffered and will continue to suffer irreparable injury without
protection, as evidenced, in part, by LOUIS’ decision to terminate NATHAN as an employee of
LOGAN SQUARE ALUMINUM, and thereafter by engaging in the following acts and
omissions, among others: (a) failing and refusing to provide Plaintiffs with material information
and documents to which they are entitled; (b) failing and refusing to discuss corporate business
or decisions or to share corporate financial information and records with JOSEPH SILVER,
notwithstanding his status as director of LSA, SREM and 2470 N. MILWAUKEE CORP.; (c)
22
failing to adequately compensate NATHAN and subsequently, his Estate, in proportion to their
holdings in the Nominal Defendants while, at the same time, taking excessive compensation and
perquisites for LOUIS and his family; and (d) further jeopardizing Plaintiffs’ r interests in the
Nominal Defendants, including directly or indirectly making phantom distributions to benefit
LOUIS to the detriment of the Plaintiffs and wasting corporate assets, as specifically set forth
above.
157. Under all of the circumstances herein, Plaintiffs have a substantial likelihood of
158. In the absence of preliminary and permanent injunctive relief, Plaintiffs will
suffer greater harm without injunctive relief than the harm Defendant will suffer if such relief is
imposed.
WHEREFORE, Plaintiffs pray for the entry of preliminary and permanent injunctive
relief against Defendant LOUIS SILVER, enjoining and restraining said Defendant from:
A. Engaging in self-dealing, usurping corporate opportunities and otherwise
breaching their fiduciary duties to LOGAN SQUARE ALUMINUM, SILVER REAL ESTATE
B. Transferring, assigning, encumbering, concealing, hypothecating, pledging,
mortgaging, borrowing against, dissipating, damaging, destroying, depreciating, selling,
withdrawing, making gifts of, guarantying debts with, purchasing with, expending or otherwise
dealing with or disposing of, any real or personal property or income in which Plaintiffs have
any interest whatsoever, including all real estate held, directly or indirectly, by LOUIS SILVER
23
including, without limitation, all real estate held in the name of any of the Nominal Defendants,
SILVER-HUBBARD, LLC and/or 4K LOGAN SQUARE PARTNERS, LLC;
C. Failing and refusing to hold annual shareholder and director meetings and special
meetings, where appropriate;
C. Failing and refusing to provide the Nominal Defendants’ shareholders, including
Plaintiffs, with access to the Companies’ books and records, financial statements, tax returns,
leases, executive compensation information and other material financial information;
D. Failing and refusing to declare dividends or declaring only nominal dividends and
otherwise inaccurately valuing the corporation;
E. Engaging in oppressive and intimidating tactics and retaliating against Plaintiffs
and others for asserting rights and privileges to which they are entitled and for protecting the
assets and benefits of LOGAN SQUARE ALUMINUM, SILVER REAL ESTATE
F. For such other and further relief as is necessary to put Plaintiffs in the position
they would have been in but for the Defendant’s wrongful conduct.
By: /s/ Laurie E. Leader

One of Plaintiffs’ Attorneys
Laurie E. Leader
565 W. Adams Street - Suite 600
(312) 906-5048
(312) 906-5299 (fax)

24
Law Offices of Michael Lee Tinaglia, Ltd
444 N. Northwest Hwy - Suite 350
Park Ridge, IL 60068
Phone: (847) 692-0421
Fax: (847) 685-8440
Jerald A. Kessler
Attorney No.1453777
14047 Petronella Drive-Suite202B
(847) 367-4500
(847) 367-9424 (fax)
jakessler@igc.org
25

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IN THE CIRCUIT COURT OF THE

NINETEENTH JUDICIAL CIRCUIT

JOSEPH S. SILVER, et al.,

Plaintiffs, No. 17 CH 729

LOUIS SILVER, et al.

LOGAN SQUARE ALUMINUM SUPPLY,

LOUIS SILVER’S MOTION FOR LEAVE TO FILE INSTANTER

exceeds fifteen pages. In support of the motion, Louis states:

counts (Counts I, II, IV, V, and VI) are pending.

Amendment”) on behalf of themselves, individually, and as co-executors of Nathan’s estate and

assert claims—simultaneously in their individual capacities, as co-executors of Nathan’s estate,

Exhibit 1. Six exhibits (A through G) are attached to the brief.

14. Louis has no objection to providing Plaintiffs a reciprocal number of additional

the time of filing, Plaintiffs’ counsel had not responded.

By: /s/ Richard T. Kienzler

Fred Foreman (ARDC # 0846902)

attorneys via email:

Michael Lee Tinaglia

Dated: March 22, 2019 /s/ Richard T. Kienzler

JOSEPH S. SILVER, et al.,

LOUIS SILVER, et al.

LOGAN SQUARE ALUMINUM SUPPLY,

LOUIS SILVER’S MEMORANDUM OF LAW IN

Fred Foreman (ARDC # 0846902)

Dated: March 22, 2019 Counsel for Louis Silver

RELEVANT PROCEDURAL HISTORY AND FACTUAL ALLEGATIONS..........................1

I. Nathan Silver Initiated This Lawsuit With A Six-Count Complaint .....................................1

III. The Co-Executors Of Nathan’s Estate Substituted In As Plaintiffs Following Nathan’s

V. Nathan’s Adult Children “Acquired” Nathan’s Shares In Family-Owned Companies And

LEGAL STANDARD .......................................................................................................................6

I. All Of Nathan’s Derivative Claims Fail As A Matter Of Law. .............................................7

V. Count XI’s Claim For “Injunction” Is Another Legal Nullity. ..............................................20

American National Bank & Trust Co. of Chicago v. Erickson,

Bohomme v. St. James,

Cable America, Inc. v. Pace Electronics, Inc.,

CitiMortgage, Inc. v. Parille,

Fuller Family Holdings, LLC v. Northern Trust Co.

Hatchett v. W2X Inc.,

In re Abbott Laboratories Derivative Shareholders Litigation,

Konstant Products, Inc. v. Liberty Mut. Fire Ins. Co.,

Lower v. Lanark Mut. Fire Ins. Co.,

Town of Cicero v. Metropolitan Water Reclamation Dist. Of Greater Chicago,

Weil v. Northwest Industries, Inc.,

735 ILCS 5/13-205 ........................................................................................................................20

735 ILCS 5/2-603 ..........................................................................................................................21

735 ILCS 5/2-604 ..........................................................................................................................12

805 ILCS 5/7.80 ..................................................................................................................... passim

805 ILCS 5/7.80(b) ..................................................................................................................16, 17

805 ILCS 180/40-1 ..................................................................................................................16, 17

RELEVANT PROCEDURAL HISTORY AND FACTUAL ALLEGATIONS

resolution of his motion.

I. Nathan Silver Initiated This Lawsuit With A Six-Count Complaint.

Estate. 2 (Id. ¶¶ 1-2.)

employment with Logan Square Aluminum. (See, e.g., id. ¶ 79.)

litigation against Louis. (Id. ¶¶ 62-67.)

III. The Co-Executors Of Nathan’s Estate Substituted In As Plaintiffs Following

2018. (1/4/18 Order, Ex. D.)

Logan Square Aluminum. (Id. ¶ 101.)

V. Nathan’s Adult Children “Acquired” Nathan’s Shares In Family-Owned

(See generally First Amendment, Ex. E.)

previous demand allegations. (Id. p. 2.)

the requisite demand on the relevant boards of directors.

filed the Second Amendment on behalf of themselves, individually, and as co-executors of