SUPREM}~ COURT Olf TIlE STATE OF NEW YOR.K COUNTY OF NEW YORK REBECCA BROA.DWAY LIMITED PARTNERSHIP and SPRECHER/FORLENZA PRODUCTIONS INC., PlaintUJs, Index No. 653659/2012 -against- AMENDED VERIFIED MARK CHRISTOPHER .HOT'I'ON, SHERR! COMPLAIN"'" I-IOTTON, MARC THIBODEAU and JOHN/JANE DOES 1-3, l)efenaants. Plaintiffs Rebecca Broadway Limited Partnership (the "Partnership") and Sprecher! Forlenza Productions Inc. (the "General Partner," and together with the Partnership, '~Plaintiffs"), though their attorneys Sch lanl Stone & Dolan, .LLP, allege the following as their Verified Complaint against Mark Christopher Hotton (""Hotton''), Shcrri Hotton (,"Shcrri," and, together \vith I lotton, the "110ttons"). Marc Thibodeau and between one and three unknown individuals (ref~renced in the caption as John/Jane Does 1-3) in this action: INTRODUCTION 1. This is an action to hold the Defenda."'1ts accountable for their willful and malicious conduct in trying to destroy a proluisi.l1g Broadway show. Dcfcndants~ tortious activities and breach of contract have already caused tnillions of dollars in damages and gravely wounded the production, which employs dozens of people. Plaintiffs are working tirelessly to salvage the show, but. if it cannot be saved, then Defendants are responsible for its destruction, along with at least hundreds of millions of dollars in. lost profit danlages. ----_._----,.. _ _._ ------------------------'--- ------- 2. 'rhe Partnership was formed to.b ring to the Broadway stage a production called Rebecca·······The i\1usical (the '''Musical',), \vhich is based on the 1938 novel Rebecca by Daphne durvlauricr. '1nc partnership was to finance, manage, and produce the Musical. 3. While seeking invcstors for the Musical, the General Partner \vas introduced to Defendant Hotton, who presented himself as a registered stockbroker and someone who had me experience in funding theatcr productions. The General Partner, on behalf of Partnership, then entered into an agreem.cnt with Defendant Hotton to help the Partnership findfillancing. 4. What ibllowed was an elaborate fraud perpetrated by Hotton on Plaintiffs. As will be described in further detail below, Hotton, aided and abetted by his w'ife Sherri, invented fictitious investors, forged :tinancial documents, and orchestrated dozens of seemingly independent communications to Plaintiffs .. ·· ...... ·all ostensibly froin bona fide investors, lenders, and their associates---in support of his scheme. At the end of the day, none of the investors or proposed financing lIotton claimed to have found materialized, and Plaintiffs were left scraIubling to find funds for theM.usical at the eleventh hour. 5. OvercoDling long odds. .Plaintiffs miraculously succeeded in finding a new, and lcgititnate, invcstor(the "'Angcllnvcstor") just in time to save the Musical. The Angel Investor retained counsel, signed subscription documents and a. cowproducer agreement, and put the necessary funds in escrow to secure an investment in the Musical. 6. But the Angel Investor, who desired strongly to maintain its anonymity, then received three disturbing and tnalicious cmails from Defendant Marc Thibodeau. Those emails spread false rUlDors about the Musical design.ed to sow alann. Unfortunately, they accomplished that objective, ultimately causing the Angel Investor not to release his signed subscription documents and co-producer agreement to the Partnership and to withdraw. 2 _.- .-. -----------, -.--~"'~,------------- 7. As a result of the Defendants' actions, the Musical's opening has been postponed and Plaintiffs have suffered substantial losses. PARTIES 8. Plaintiff Partnership is a New York: limited partnership with its principal place of bu.siness on West 52nd Street in New York Cotmty. 9. Plaintiff General Partner is a New York corporation with its principal place of business on West 52nd Street in NC\\l York County. The General Partner is owned by the Sprecher Organization Ll"C and Louise Forlenza Productions J.nc., whose principals arc Ben Sprecher and Louise Forlcn.tll, respectively. 10. Defendant Hotton is an individual residing at 501 Corbin Place, West Islip, New York. Hotton was arrested on October 15,2012 in connection with this scheme and is currently incarccJ."atcd. 11. Defcnda..l1t Shcrri Hotton is Hotton' s wife and resides at 501 Corbin Place, West Islip, New York. 12. Defendant Marc Thibodeau is an individual residing, upon information and belief: at 180 Riverside Boulevard, New York:, New York, who conducted business under the nmne The Publicity Otllce. Using that name, Thibodeau maintained his office at 1650 Broadway, Suite 611, New York, NY 10019. Thibodeau specialized in providing pUblicity and public relations services t.o the producers of Broadway Inusicals. 13. In 2012, Thibodeau was retained by Plaintiffs to work with them as the publicist, press agent and public relations agent for Rebecca. For nlany years prior to 2012, and continuing to date~ Thibodeau has also acted as the publicist, press agent and public relations agent for other Broadway musicals, including The Phantom of the Opera. 3 -----"._--'- 14. Defendants John/Jane Does 1.-3 are an unknown individual or individuals \vho induced Thibodeau to send three malicious emails in lute September 2012 to the Angel Investor or its representatives. JURISDICTION AND VENUE 15. This Court has subject matter jurisdiction over this action pursuant to Section 140-b of the New York Judiciary Law, which provides that the Supreme Court of New York has general jurisdiction. 16. This Court has personal jurisdiction over Defendants because they committed tortious acts in New' York County and Plaintiffs suflered harm in New York County. 17. Venue is appropriate pursuant to Section 503 of the CPLR because the Plaintiffs are donliciled in New York and their principal place of business is in New York County. 18. Venue is appropriate in this County over Plaintiffs' claims against Marc Thibodeau because Thibodeau is a resident of the Coun.ty of New York, and committed his tt)rtious and wrongful conduct as alleged below in the County of New York . .F ACTS A. ,Formation of the IJartnership and the need for financing 19. The Partn~rship was formed in M.arch 2011. to bring an adapted version of Rebecca~ the well-known novel by Daphne du 'Maurier, to the Broadway stage. 20. Pursuant to the Partnership's limited partnership agreement, the General Partner was tasked with financing, managing, and producing the Musical. The tW() principals of the General Partner~ Ben Sprecher and Louise Forlenza, are veteran theater producers, having previously produced musicals both on and off Broadway. 4 21. The M·usical required between $12 and $14 million in capital to make it to opening night. So starting in 2011, the General Partner, using the contacts ofi ts principals, set out to locate the necessary funding and assemble a production team. 22. In particular~ by \vritten agreement dated May 10, 2012, Plaintiffs retained Marc Thibodeau, doing business as T'hePublicity Office, as the Press Representative for Rebecca. 23. During that process, Ms. Forlenza was also introduced to Defendant Hotton by an individual named Jeffrey Troncone . .M r. T.roncone, whom. Ms. Forlenza had met through a client of her certHied public accounting business. put them in touch with a number of potential investors, including one who put $250,000 into the Partnership. By the t.ime Plaintiffs met Hotton, they had already secured commitments for at least $7 million in financing. B. Hotton commences his scheme by making false representations to Plaintiffs 24. ·Ms. Forlenza first spoke with Defendant Hotton in early January 20]2. During that conversation, Hotton to1d her that he was a registered stock broker; that he had previously arranged. funding for a successful nlusical in London's West End; and that he had the contacts to procure funding for the Musical, in addition to funds of his own that he managed. 25. After that meeting, Ms. Forlenu.'l confirmed that Hotton was in fact a registered stock broker previously affiliated with Oppenheimer & Co. When Sprecher and Forlenza subsequently asked Defendant Hotton for additional background information, he promptly provided it in written form. 26. In late January or early February 2012, Defendant Hotton came to Plaintiffs' ofIices to m.eet with Sprecher and Forhmza in person. During thatme~ting, Hotton confinned that he had raised capital for theater productions previously. The General Partner then retained Defendant Hotton to help secure financing for the Musical in an agreement dated Febnmry 7, 5 ------------,-------------------------------------------------------------------- 2012. Any fees due Hotton under that agreement would come not from the Partnership, but frolu the General Partner~s own interest in the Musical's future adjusted net profits. 27. Defendant Hotton represented that his potential investors resided abroad, with k~y investors in Australia, Italy, and the United Kingdom. He indicated that he would need to travel to nlcet these investors in person, and asked Sprecher and Forlenza if they wanted to accompany him on those trips. 28. Since Sprecher and Forlenza were busy attending to the many needs of the Musical, it ,vas decided that Hotton would make the initial trips abroad on his own. Defendant llotton asked for various advancements of his travel expenses for these trips. The General Partner agreed to pay those expenses, ultimately giving Hotton about $30~OOO in travel-related expenses. Again, those funds did not COlne from the Partnership, but rroln the General Partner's interest in the Musical's future adjusted net profits. 29. For example, Ms. Forlenza gave lIotton a check for $7,500 dated February 8, 2012 as reimbursement for his legal expenses associated with entering into the agreement with the General Partner. In fact, Hotton did not use the check for his legal expenses related to the Musical~ it was endors~d over to and deposited by Trinity Management Consulting Corp. C"'I'rinity Managcm(!nt"), a corporation formed by the Hottons. The registered address for Trinity Management ,vas the Hottons' ho.me. Sherri listed herself in filings with the New York Secretary of State as the Chief Executive Officer and President of Trinity Management. C. lIotton locates four investors who sign subscription documents 30. Armed with his advances~ in February 2012 Hatton ostensibly went oflto do his work. Between February and April 2012, he informed Plaintiffs that he had found the fonowing 6 __ ,----'. ._., - .......... - four investors who com.mitted--hy signing subscription agreements and other docU111entation- to beCOlne limited partners in the Partnership: ~m~~~~I~_- N_~_:~_~_O._~_·_T_. ~S_~~~D~l l f Paul Abrams (Australia) $2 million March 2,2012 J I ~~~~er ~ mill~:~__ 2~20I2---~ ,-Julian (UK) ... $1 March I i =-_J Thomas Industries Ltd. (UK) $1 million March 21,2012 ' l.~~ter Timmo~~~ 1~$5_00~000 Lril ___ 6, 2012 31. Hotton provided Plaintiffs with what appeared to be signed subscription docUlnents on behalf of each of these investors. Each agreclllcnt appeared to be filled out hl different handwriting and bore other hallmarks of lcgitiulacy (e.g., unique investor contact information and dates of birth). Moreover, Hotton directed Plaintiffs to Vv'ebsites of certain of the investors or their associated businesses, each of which appeared to be genuine. 32. In fact, Hotton was perpetrating an elaborate rusc. None of the investors existed; he had concocted thel11 all. Hotton tnade up the nalnes, dates of birth, home addresses, email addresses, telephone nUlnbers, and signatures of the purported investors. And he had sct up the web sites himself by secretly registering them through one of his entities prior to the fraud. Even the entity throu.gh which Hotton signed his agrcclnent with the General Partner, 'I'M. Consulting Inc.> was a fictitious company that was .merely Hotton's alter ego. 33. Hotton took other steps to perpetu.ate the scam. In May 2012, Plaintiffs put together an event for the Musical's investors in Manhattan.. Plaintiffs invited (what Plaintiffs believed to be) the investors brought in by Rotton, tUld exchanged crnaHs with them about whether they could attend. Due to the fact that they purportedly resided overseas, none 7 apparently could. But Hotton attended along with his wife Sherri, and they brought along a woman they introduced as the niece of one of the investors. In fact, she \vas a crony of the HoUons. n. The subscrintion deadline and the apparent passing Of a key investor 34. The Partnership's capitalization date (that is, the date by which all subscriptions were due in order for rehearsals to begin in September) was July 31, 2012. Shortly before then~ Hotton told Plaintiffs that Paul Abrams, the largest investor he had 1l)und, had contracted malaria and was seriously ilL PlaintiiTs were concerned for the health of Mr. Abranls, and had to extend the deadline in light of the cirCUlnstances. Right after the capitalization date, on August 5! 2012, Hotton told Plaintiffs that Mr. Abrams had died. This was a lic, although PlaintifIs did not know it at the time. 35. The apparent passing of Mr. Abrams caused delays in the funding of the cOlnlnitmcnts of the investors brought in by lIotton. Hotton told Plaintiffs that som~one named MOr. Wexler would represent the Abrams estate for purposes of the Partnership investmont. This was also untrue. Although Plaintiffs did not know it, Hotton had invented. :tvfr. Wexler as wen. 36. With time running short-the Musical was set to debut in November 2012-·- PlaintitYs began communicating directly, and on. virtually a daily basis with (what Plaintiffs believed to be) Mr. Wexler and the three other investors brought in by Hotton. Plaintiffs exchanged numerous emails starting in mid-August 20] 2 with (what Plaintifis believed to be) the investors and Mr. Wexler surrounding their investment in the Partnership. In one of those emails.Mr. Sprecher expressed his condolences to Wexler about the death of Abrams, even offering to put a dedicoation in the Broadway program for the Musical in Mr. Abranls'smemory. 8 37, Plaintiff\,)' transactional attorney also exchanged 11lany emails \vith .Messrs. Wexler and Hotton. The Musical's counsel responded to rounds of due diligence questions from M:r, \Vcxler about the limite,d partnership agreement and the mechanics of an investm.ent in the Partl1crship. 38. As August turned to Septclnber, however, the situation became urgent. Plaintiffs frantically tried to communicate with Mr. Wexler-offcring to t1y to wherever he was in the world to meet him in person-who kept telling them that Mr. Abrams's investment remained tied. up in estate matters. In early September, Plaintiffs heard for the tirst time that the other three of Hotlon's supposed investors would not fund their commitments unless Abrams's share came through. Plaintiffs had until then thought they would only need to replace Abrams's $2 ll1i1lion share. Now~ they realized they needed to replace the entire $4.5 lnillion if the Abrams piece fell through, because the previously-separate investor commitments obtained by Hotton were tied together, even though no contract so required. ·E. lIotton belps Plaintiffs buy more time by helping them obtain bridge financing 39. By the sec·ond half of September, Plaintiffs were having trouble getting responses trom Wexler and the other Hotton investors. It 3:ppeared that the four Hotton investors had decided not to invest. Hotton seemed distraught over the fact that his investors had not come through, and offered to help Plaintiffs in any way he could. 40. Desperate to get financing and \\-ith time running out, Plaintiffs worked with HoHon to obtain bridge financing to buy the Musical more thue. Hotton ostensibly helped arnlngc a bridge financing loan of $1.1 rn,illion for the .Musical from an entity called SPS Equity LP in Manhattan. 9 41. In order to obtain the bridge ti.nancing~ Plaintiffs and Hotton. signed loan docunlcntation pledging the following as collateral to SPS Equity: (a) a brokerage account held hy Hotton at Royal Bank of Canada; (b) a brokerage account held by Ms. Forlenza personally; (c) real property o\vned by Hotton in Eagleswood, New Jersey; (d) Ms. Forlenza's hOlne residence; and (e) Mr. Sprecher's hom.e residence, which he owned with h.is wife. Mr. Sprecher, his wife, Ms. Forlen::r..a, and Hotton each signed guarantees making tbe.m liable personally for the loan. 42. Though Plaintifi'S did not know it at the tirne. the entire bridge financing process too \vas a sham. Hotton once again invented everyth.ing-the SPS Equity loan officer (with whom Plaintitfs spoke by telephone; another apparent confederate ofHotton's), the loan documentation. various entities (such as the title company dealing with Sprecher's Connecticut property), and the would-be til1.ancing. Hotton. cleverly used take letterhead, phony entities, and nunlcrous false email addresses to mask the scheme. 43. PlaintilTs never dreamed that Hotton~ whom they considered to be a tnlsted partner, would go so far as to pledge his own property, brokerage accoul1t~ and sign a personal guarantee ill support of the ruse. In fact~ Plaintiffs were so convinced as to lIotton~s bona fides that Ms. Forlenza wired Hotton $10,000 from her personal bank account to compensate him for arranging the loan, und put up another $1,495 of her personal fUnds to expcditt"! the process of getting a dOCllfl1entthat (according to the lender) was needed to pledge Hotton.'s brokerage account. F. The Angel Investor appears 44. As the Press Representative for Plaintiffs, Thibodeau was kept infomlcd of all key developments relating to PlaintitTs' efforts to produce Rebecca. As Press Representative, 10