hulkThe Honorable Suzanne Parisien IN THE SUPERIOR COURT OF WASHINGTON IN AND FOR KING COUNTY BELLEVUE SQUARE, LLC, a Washington limited liability company, No. 17-2-09691-1 SEA Plaintiff, DECLARATION OF MICHAEL J. v. AVENATTI IN OPPOSITION TO MOTION FOR TEMPORARY GLOBAL BARISTAS US, LLC, a Washington RESTRAINING ORDER limited liability company; JOHN DOE INDIVIDUALS 1-10; JOHN DOE CORPORATIONS 1-10, Defendants. MICHAEL J. AVENATTI declares: 1. I am over the age of 18, am competent to be a witness in this matter, and make the following declaration on my personal knowledge. 2. I am the principal of Global Baristas US, LLC (?Global?), and serve as its chairman and general counsel. 3. I am also the co-founder and Managing Partner of the law ?rm Eagan Avenatti, LLP The ?rm?s of?ce is located in Newport Beach, California. In addition to me, EA employs a staff of nine as well as seven other accomplished lawyers. Since formation, EA has been responsible for securing over $1 Billion in verdicts and settlements on behalf of its clients as lead counsel. As recently as April 7, 2017, a federal jury awarded our clients $454 million in FOSTER PEPPER PLLC 1111 THIRD AVENUE, Sum: 3000 SEATTLE, WASHINGTON 98101-3292 PHONE (206) 447-4400 FAX (206) 447-9700 DECLARATION OF MICHAEL J. AVENATTI IN OPPOSITION TO MOTION FOR TEMPORARY RESTRAINING ORDER - 1 51600926 I 4hcompensatory and punitive damages against Kimberly-Clark Corp. and its af?liate Halyard Health Inc., as summarized in the Law 360 article attached hereto as Exhibit A. 4. EA is currently the debtor in a chapter 11 bankruptcy case because of an involuntary case initiated by a private investigator with a claim of approximately $28,000. EA has agreed to proceed with the chapter 11, and retained (subject to bankruptcy court approval) the law ?rm Baker Hostetler LLP (?Baker Hostetler?) to represent it. Attached hereto as Exhibit is a true and correct copy of the Statement of Elizabeth A. Green and the Law Firm of Baker Hostetler, LLP, Pursuant to 11 U.S.C. 329(a) and Federal Rules of Bankruptcy Procedure 2016(b) describing the payment of a retainer to that law ?rm. Only the Initial $100,000 Retainer (as described in the Statement) was paid to Baker Hostetler, LLP. Exhibit is Docket Entry 47 in bankruptcy case, and is publicly available information. 5. On April 13, 2017, Global authorized Baker Hostetler to transfer US $100,000, previously deposited by Global for the representation of BA in its pending bankruptcy, to be deposited in the registry of the Superior Court for King County. It is Global?s intent that these funds serve as cash in lieu of a supersedeas bond pursuant to RAP 8.1(d) in the Appeal of Bellevue Square, LLC v. Global Baristas US, LLC, et 611., King County Cause No. 15-2-27043-5 SEA. 6. Baker Hostetler, LLP is not an insider of Global. 7. Global did not make the payment to Baker Hostetler, LLP with intent to hinder, delay, or defraud any creditor of Global. The payment was fully disclosed in bankruptcy case. 8. Global is not insOlvent. The fair valuation of assets is in excess of $43,000,000, and Global?s debts are approximately $3,700,000. The value of Global?s assets therefore far exceeds its debts. Global?s assets, after the March 15, 2017 payment of $100,000 to Baker Hostetler, were more than adequate for Global?s business and transactions. In addition, FOSTER PEPPER PLLC 1111 THIRD AVENUE, Sum; 3000 SEATTLE, WASHINGTON 98101-8292 PHONE (206) 447-4400 FAX (206) 447-9700 DECLARATION OF MICHAEL J. AVENATTI IN OPPOSITION TO MOTION FOR TEMPORARY RESTRAINING ORDER - 2 51600926.] AWN Global did not intend to incur, or believe that it would incur, debts beyond its ability to pay as they became due. 9. Global (which is authorized in some instances to do business under the trade name S) is also generally current on its undisputed obligations (Global disputes all of Plaintiffs claims, and such claims are currently being appealed, and are therefore contingent, disputed and unliquidated). As evidenced by the Satisfaction of Warrant from the Washington State Department of Revenue and the letter of good standing from the Department of Labor and Industries attached hereto as Exhibits C-1 and C-2, Global has adequately resolved the issues relating to the tax warrants described in Plaintiff?s motion. 10. Plaintiff?s motion arises from an ongoing commercial landlord-tenant dispute that is currently on appeal. Global, the owner of Tully?s, leased three separate units from Bellevue Square, LLC (?Bellevue Square?) and its related entities for Tully?s coffee shops. One was located in Bellevue Square Shopping Center in Bellevue owned by Bellevue Square; the two others were in the nearby Lincoln Square and Bellevue Place developments. 11. Global leased the space in Bellevue Square Shopping Center in 1999 and renewed the lease in 2009 and 2014. At the time of the 2014 renewal, Bellevue Square orally informed Global that it would only negotiate for the renewal of the Lincoln Square and Bellevue Place leases if Global renewed the Bellevue Square lease. While Global?s expected return on investment at the Bellevue Square Shopping Center store was negligible at best, it agreed to the renewal of the lease in 2014 based on Bellevue Square?s assurances that it would negotiate for the renewals of two other leases for more pro?table stores. If it could renew those other leases, then Global could accept the unfavorable terms of the Bellevue Square lease renewal. l2. Bellevue Square made no attempt to negotiate with Global for the renewal of the other leases, and in September 2015, Bellevue Square unilaterally informed Global that it would not renew the other two leases. In light of the loss of the two pro?table stores that were used to offset its operations at Bellevue Square Shopping Center, Global vacated and surrendered the FOSTER PEPPER PLLC 1111 THIRD AVENUE, SUITE 3000 SEATTLE, WASHINGTON 98101-3292 PHONE (206) 447-4400 FAX (206) 447-9700 DECLARATION OF MICHAEL J. AVENATTI IN OPPOSITION TO MOTION FOR TEMPORARY RESTRAINING ORDER - 3 51600926 1 Abate Bellevue Square property in the fall of 2015. Global continued to tender rent to Bellevue Square to ease the transition to a new tenant, but those payments were rejected by Bellevue Square. In May 2016, Bellevue Square leased the property to a new tenant for $69.75 per square foot, which was a reduction of more than thirty-four percent from the then-applicable rate under the lease of $106.09 per square foot. 13. In November 2016, Bellevue Square filed its present action against Global alleging, among other things, breach of the lease and resulting damages of nearly $1.7 million. Bellevue Square moved for summary judgment seeking past and future rent over the next several years, claiming that Global should be liable for the difference between Bellevue Square?s lease with Global and the new. Bellevue Square tenant. 14. In response, Global argued that the terms of the lease with the replacement tenant were not reasonable and, therefore, Bellevue Square failed to mitigate its damages. Global presented evidence, obtained from Bellevue Square?s own records, showing that the 34% reduction was unprecedented, as the rent for the space had not been that low since the early 20003; the average rental rate at Bellevue Square Shopping Center for retailers in the same category as Global was approximately $95.84 per square foot. For its own reasons, Bellevue Square limited its marketing efforts to retailers in the food and beverage category (speci?cally coffee retailers), even though its agent admitted that other types of vendors could reasonably use the property. 15. The trial court denied Bellevue Square?s motion for summary judgment and a subsequent motion for reconsideration. Bellevue Square has sought discretionary review of those decisions by the Court of Appeals in Cause No. 75603 -6. 16. Bellevue Square propounded discovery requests to Global in December 2015, and Global directed discovery requests to Bellevue Square. Global answered the interrogatories, requests for production, and requests for inspection in early January 2016. By agreement, both parties supplemented their respective responses on January 25, 2016; however, the parties agreed FOSTER PEPPER PLLC 1111 THIRD AVENUE, SUITE 3000 SEATTLE, WASHINGTON 98101-3292 PHONE (206) 447-4400 FAX (206) 447-9700 DECLARATION OF MICHAEL J. AVENATTI IN OPPOSITION TO MOTION FOR TEMPORARY RESTRAINING ORDER - 4 51600926. 1 that responsive documents would be exchanged after entry of a stipulation and a protective order. Accordingly, Global produced documents on March 2, 2016. 17. In conjunction with responses to discovery requests from Bellevue Square, Global produced its privilege log on August 31, 2016. In that privilege log, Global asserted attorney- client privilege with respect to communications between me, as Global?s general counsel, and then-executives of Global, including Tod McDonald and Brian Helm. Although I am a member of Global?s board of managers and chairman of the company, my role in the communications at issue was to provide legal advice to Global. 18. Bellevue Square moved to compel Global to produce 14 privileged emails, claiming I was not acting as Global?s general counsel, so the privilege did not attach to them, or that Global waived any privilege. It also sought in camera review of the emails. The trial court denied in camera review, sanctioning Bellevue Square for its repeated misconduct in the course of discovery. Bellevue Square sought reconsideration of that order, which was denied by the trial court. However, the court granted Bellevue Square?s motion to compel without specifying the grounds on which it decided attorney-client privilege was inapplicable. Global then ?led a motion for reconsideration of that order or, in the alternative, for a stay; Global also asked the trial court to certify the order for appellate review. The trial court denied any relief to Global in an order entered on September 26, 2016. Global then timely sought review by the Court of Appeals. 19. Notwithstanding its prior rulings on in camera review of the privileged materials at issue, and without the ?ling of a motion by either side, the trial court abruptly changed course and issued an order sua sponte on October 5, 2016 withdrawing its September 15 order on the motion to compel, and, without mentioning its two earlier orders rejecting Bellevue Square?s request for in camera review, mandating that Global produce the privileged materials or face the sanction of exclusion of my trial testimony. Global timely sought review of that order by the Court of Appeals, but the Commissioner denied review. FOSTER PEPPER PLLC 1111 THIRD AVENUE, Sum: 3000 SEATTLE, WASHINGTON 98101-3292 PHONE (206) 447-4400 FAX (206) 447-9700 DECLARATION OF MICHAEL J. AVENATTI IN OPPOSITION TO MOTION FOR TEMPORARY RESTRAINING ORDER - 5 516110926. 1 appeared for my deposition, but re?ised to answer questions covered by attorney-client or .work product privilege. Bellevue? Square thereafter sought ever-eScalating sanctions from the trial court against me and/or Global, culminating in an April 12, 2017 judgment and order of contempt, from which Global has appealed as of right to the Court of Appeals. 21. I reside in Southern California. I very much want to attend the hearing on Plaintiff?s Motion for Temporary Restraining Order but am unable to do so because of the short notice provided. I declare under penalty of perjury under the laws of the state of Washington that the foregoing is true and correct. Executed at NeWport Beach, California t1 5 ILI day oI?April, 2017. 85-1 J. Avenatti DECLARATION OF MICHAEL J. AVENATTI 1N OPPOSITION TO MOTION FOR TEMPORARY RESTRAINING ORDER - 6 3100091!? 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