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SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF NEW YORK

Index No.:
3rd
885 AVENUE REALTY OWNER LLC,

Plaintiff,
Date Filed:

-against-

SUMMONS
ALDEN GLOBAL CAPITAL, LLC,

Venue is based upon the location

of Plaintiff's principal office

To the above-named Defendant:

You are hereby summoned to answer the complaint in this action and to serve a copy of
your answer on the plaintiffs attorneys within 20 days after the service of this summons (or within
30 days after the service is complete if this summons is not personally delivered to you within the
State ofNew York); and in case of your failure to appear or answer, judgment will be taken against
you by default for the relief demanded in the complaint.

Plaintiff designates New York County as the place of trial. The basis of venue is that
plaintiff is a Delaware Limited Liability Company, authorized to do business in the State of New

York, with its principal office located at c/o SL Green Management, LLC, 420 Lexington Avenue,
New York, New York 10170.

Dated: New York, New York

February 25, 2021

STEMPEL BENNETT CLAMAN

& HOCHBERG, P.C.

By:
Ri ar lama
J an W. Rich
31st
675 Third Avenue, Floor
New York, New York 10017

(212) 681-6500
Attorneys for Plaintiff
To:

Alden Global Capital, LLC via the New York Secretary of State

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SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF NEW YORK
3rd
885 AVENUE REALTY OWNER LLC,
Index No.

Plaintiff,

-against-

COMPLAINT
ALDEN GLOBAL CAPITAL, LLC,

Defendant.

3rd
885 AVENUE REALTY OWNER LLC ("Landlord"), as owner of the building known

Building'
as 885 Third Avenue, New York, New York, a/k/a the 'Lipstick (the "Building"), for its

("Alden"
complaint against Alden Global Capital, LLC or "Tenant"), alleges:

"Lease"
1. This is an action for money damages arising under Alden's (as defmed

34th
inf a) for the entire Floor of the Building (the "Premises"), following (a) Alden's failure to

pay any of the rent due beginning as of April 2020, (b) Landlord's due issuance of a notice to cure,

and a notice of Lease cancellation, and (c) Tenant's statement (in a letter from its counsel dated

January 14, 2021) that Alden was vacating the Premises as of January 15, 2021.

PARTIES

2. Landlord is a limited liability company, authorized to do business in the State of

New York, with an office located c/o SL Green Realty Corp., 420 Lexington Avenue, New York,

New York 10170.

3. Prior to July 29, 2020, Landlord, as owner of the Building, had leased it, subject to

all existing space leases, to an unrelated entity, known as Metropolitan 885 Third Avenue

Leasehold LLC ("Metropolitan"). Metropolitan, however, defaulted under its lease, and that lease

2
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was cancelled as of July 29, 2020. By notice dated August 11, 2020, Landlord accordingly gave

written notice to Alden of the foregoing, and informed Alden that Alden was thereupon deemed

to have attorned to Landlord as a direct tenant.

4. Alden is (upon information and belief) a Delaware limited liability company,

authorized to do business in New York State. According to Wikipedia (footnotes omitted):

Alden Global Capital is a hedge fund based in Manhattan, New York

City. It was founded in 2007 by Randall D. Smith. Its managing

director is Heath Freeman. It owns 50.1% of Digital First Media,
which in turns owns more than 50 daily newspapers throughout the
United States.

Through its subsidiary MNG Enterprises (DBA) Digital First

Media, Alden owns newspapers including The Denver Post, the St.
Paul Pioneer Press, the Boston Herald, The Mercury News of San

Jose, the East Bay Times, and The Orange County Register. The

company acquired Digital First Media in 2010 after its parent

company, MediaNews Group, declared bankruptcy. In December

2019, Alden Global Capital acquired a 32% stake in shares of

Tribune Publishing Company, owner of the Chicago Tribune.

Alden has a reputation for cutting costs by reducing the number of

journalists working on its newspapers. In March 2018, Margaret

Sullivan, the media columnist for The Washington Post, called

Alden "one of the most ruthless of the corporate strip-miners
journalism."
seemingly intent on destroying local Alden has
received critical coverage from the editorial staff at the Denver Post,
capitalists"
who described Alden Global Capital as "vulture after
multiple staff layoffs.

5. Upon information and belief, and as set forth below, Alden occupied the Premises

as its main executive office from the time of its formation around 2007, until January 15,

2021 -- to a letter dated from its "The Premises has

when, according January 14, 2021, counsel,

2121."
now been cleaned and will be vacant as of January 15,

THE LEASE

"Lease"
6. The governing consists of

3
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a. a written agreement of lease dated as of March 9, 1995, between an affiliate of

"Hines"
as a predecessor-in-interest of Landlord, as landlord, and Smith Management Company,

Inc. as tenant (the "Original Lease"). Upon information and belief, that tenant was associated with

Mr. Randall D. Smith;

b. a First Amendment of Lease dated as of April 29, 1996, between those same parties;

c. a Second Amendment of Lease, dated as of August 2, 2001, between a new

ownership entity as landlord, and SDR Group Holdings, Inc. f/lda as Smith Management

Company, Inc. as tenant; as guaranteed by Pengo Industries, Inc. Upon information and belief,

"SDR" 'Pengo'
derives from the initials of Randall D. Smith, in reverse order; and was also

affiliated with Mr. Smith;

d. a Third Amendment of Lease, dated as of July 26, 2007, between yet another new

ownership entity as landlord, and the same tenant entity;

2009,"
e. a Fourth Amendment of Lease, dated as of "December , between

Metropolitan (see supra) as successor-in-interest landlord, and the same tenant entity; and

f. a Fifth Amendment of Lease, dated as of September 31, 2016, between

Metropolitan as landlord, and Alden Global Capital, LLC as tenant. Upon information and belief,

Alden is likewise associated with Randall D. Smith; and Alden began as yet another investment

fund that also operated in the Premises beginning as of around 2007.

7. Pursuant to said Fifth Amendment of Lease, the stated expiration date of the Lease

was extended to February 28, 2025.

4
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8. Pursuant to the Fifth Amendment, the base rent as of April 2020, was $105,636.75

per month; and the base rent would increase to $113,141.00 per month as of March 1, 2023.

9. In addition, Tenant was liable for various additional rent charges, including a Real

Estate Tax escalation charge (see Fifth Amendment § 5, and Original Lease § 2.05), and an

Operating Expenses escalation charge (see Fifth Amendment § 5, and Original Lease § 2.04). (The

Rent,"
base rent, plus these escalation charges, are together defined as the "Gross see Original

Lease § 2.08.)

Deposit"
10. Pursuant to Fifth Amendment § 7, Alden deposited a "Security in the

amount of $422,547.00 -- which Tenant could elect to post either in cash or by letter of credit.

limitation,'
11. Original Lease § 6.03 provides for a 'conditional pursuant to which, if

Tenant defaults in payment of rent, and said default continues for seven days after notice of that

default, then Landlord may issue a seven-day notice of cancellation, whereupon, at the expiration

of that period, "the term and estate hereby granted shall terminate upon the expiration of such

seven days with the same effect as if the last of such seven days were the expiration date of the

law."
Term, but Tenant shall remain liable for damages as provided herein or pursuant to

12. Pursuant to Lease § 6.05(b), upon termination of the Lease pursuant to § 6.03,

Tenant shall remain liable for, inter alia, damages in an amount equal to (i) the monthly sum

otherwise due under the Lease as Gross Rent, less (ii) any net rents actually collected by Landlord

if the Premises is re-let -- and Landlord is permitted to re-enter the Premises for
accordingly

purposes of such re-letting.

13. Pursuant to § 6.07, second sentence, "Landlord may [also or alternatively] invoke

for" -- so
any remedy allowed at law or in equity as if specific remedies were not herein provided

5
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re-entry'
that, inter alia, Landlord's common-law right of 'self-help is reserved.

party' attorneys'
14. Original Lease § 6.11 includes a 'prevailing fee clause.

LANDLORD'S CANCELLATION -- AND RELATED CORRESPONDENCE

15. Alden failed to pay of its rent due for April 2020 -- nor has it paid rent for
any any

any subsequent month.

16. On September 29, 2020, Landlord issued a notice of default in respect of Tenant's

failure to have paid its rent due for the period April - September 2020.

17. On October 12, 2020, counsel for Alden responded to that notice its cure. There

was no denial of the failure to pay rent. But counsel asserted that Alden was excused from paying

purpose.'
rent pursuant to, inter alia, the doctrine of 'frustration of

18. By answering letter from Landlord's counsel dated December 30, 2020, Landlord

explained why the assertions in the letter of Alden's counsel were without merit. In particular,

risk"
Landlord's counsel noted that the Lease "allocated the of government restrictions imposed

upon tenant-employers -- and provided that Tenant would bear that risk. [Compare Victoria's

Secret Stores, LLC v. Herald Square Owner LLC, 2021 WL 69146 (Sup. Ct. N.Y. Co.) (Borrok,

J.), granting summary judgment to the landlord, determining that lease provisions similar to those

risks,"
here should be deemed to constitute an "express allocation of these thereby precluding any

defense of, eg., 'frustration of purpose'].

19. In particular [-- and analogous to the circumstances in Victoria's Secret, supra]:

a. the Lease does not include general force majeure clause -- and as a matter of
any

law, none should be implied:

b. Lease § 2.08 provides that (emphasis added):

6
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Tenant shall pay all Gross Rent and other sums of money as the same

shall become due and payable under this Lease at the times provided

herein without notice or demand and without setoff or counterclaim

except as specifically provided herein ....

c. and Lease § 3.01(b) then provides a limited exception to the foregoing absolute

payment obligation - although the exception does not as a matter of fact:

plainly apply here,

Landlord shall not be liable for damages to either person or property

nor shall Landlord be deemed to have evicted Tenant nor shall there

be any abatement of Gross Rent or additional rent nor shall Tenant

be relieved from performance of any covenant on its part to be

performed under this Lease by reason of (i) failure by Landlord to

furnish Landlord Services due to causes or circumstances beyond

the control of Landlord, (ii) breakdown of equipment or machinery

utilized in supplying any Landlord Service or (iii) cessation of any

Landlord Service due to causes or circumstances beyond the control

of Landlord; provided, that if without the fault or neglect of Tenant,

any portion of the Premises is rendered untenantable for a period of

10 consecutive days by reason of any one occurrence as a result of

either the failure by Landlord to furnish any Landlord Service or the

cessation of any Landlord Service and Landlord shall not be

prosecuting with reasonable diligence to furnish or restore the

Landlord Service in question, then for the period commencing on

the 11th day that the Premises or such portion thereof is so

untenantable until the Premises or such portion thereof is no longer

untenantable, Gross Rent shall be appropriately abated for so much

of the Premises as shall be so untenantable until the same is no

longer untenantable.

'exception'
20. But that limited to the absolute obligation of Tenant to pay its rent does

not apply here, because the Building has at all times been fully functioning, and there has been no

failure or cessation of any Landlord Service (as defined in Art. 3).

21. Accordingly, by notice dated December 30, 2020, Landlord declared that the Lease

would be deemed cancelled effective as of 2021 -- but Tenant would remain liable as
January 11,

per the Lease.

7
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22. By letter dated January 14, 2021, Alden's counsel wrote again. That letter asserted

that "the Lease was terminated under the principles of frustration of purpose and constructive

time."
eviction as of March 2020, and Alden therefore has not defaulted at any Tenant did not,

however, respond to any of the particular points set forth in the December 30, 2020 letter from

Landlord's counsel, wherein Landlord had explained why Tenant's repeated assertions were

simply mistaken.

23. The new letter from Tenant's counsel also stated, however, that Tenant would be

vacating the Premises as of January 15, 2021, and demanded a return of Tenant's Security Deposit.

A tenant cannot, by its unilateral vacatur, escape its Lease liabilities; but such vacatur estops

Tenant from complaining as to Landlord's re-entry and efforts to re-let (without prejudice to

Landlord's right to recover all damages due, and without imposing upon Landlord any duty to

relet).

AS AND FOR
A_FIRST CAUSE OF ACTION

24. Landlord repeats and realleges the foregoing allegations of ¶¶ 1-24.

25. By reason of the foregoing, Landlord should be awarded all rents due as of January

-- to be further shown at trial, and which Landlord estimates will exceed $600,000 (aRer
1, 2021

application of the Security Deposit).

AS AND FOR
A SECOND CAUSE OF ACTION

26. Landlord repeats and realleges the foregoing allegations of ¶¶ 1-24.

27. A justiciable dispute exists as to whether, as of February 1, 2021, if Landlord has

not received any net rents by reason of re-letting the Premises (and as of the date hereof Landlord

has not entered into any new lease for the Premises), Landlord is entitled to recover ongoing

8
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damages pursuant to Lease -- which Landlord estimates are to exceed $5

§ 6.05(b) likely

million -- and is entitled to apply the Deposit on account of either the arrears (as
Security existing

set forth above) and/or ongoing month-by-month damages due under Lease § 6.05(b).

AS AND FOR
A THIRD CAUSE OF ACTION

28. Landlord repeats and realleges the foregoing allegations of ¶¶ 1-24.

29. According to press reports dated December 30, 2020, Alden has now offered to buy

approximately two-thirds of the parent company of the Chicago Tribune newspaper, for

approximately $350 million.

30. Upon information and belief, such an acquisition includes an improper effort by

Alden to remove its funds from this State, in an effort to impede collection of the sums owed by

Alden to Landlord now and through the stated Expiration Date of the Lease.

31. By reason of the foregoing, Alden should be required to at all times maintain at

least $6 million in liquid, unencumbered assets located in New York State, and available to answer

for a judgment herein in Landlord's favor.

WHEREFORE, Landlord respectfully requests that a judgment now be entered:

a. awarding to Landlord, against Tenant, a money judgement for all rents due as of

in an amount in excess of $1 million (-- before application of the

January 1, 2021, Security

Deposit), to be further shown at trial;

b. declaring (i) that Tenant remains liable for month-by-month damages, per Lease

§ 6.05(b), subject only to a credit, in the event that Landlord re-lets, for the net rents (if any)

achieved by Landlord from such reletting; and (ii) that Landlord may apply the Security Deposit

9
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on account of either (a) the existing rent arrears, and/or (b) the Tenant's month-by-month damages,

as Landlord may elect;

c. restraining Tenant from removing assets from this State, unless Tenant leaves, at

least $6 million available to answer for a judgment in favor of Landlord; and

d. granting Landlord such other and further relief as may be just and proper, including

party' attorneys'
but not limited to 'prevailing fees.

Dated: New York, New York

February 25, 2021

STEMPEL BENNETT CLAMAN &
HOCHBERG, P.C.

By:
Ric d an
Jo an W. Rich
Attorneys for Plaintiff
31st
675 Third Avenue, Floor
New York, NY 10017

(212) 681-6500

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