SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK

AYSE GIRAY, individually and on behalf of EUPHRATES, INC.,

Plaintiff, Index No. 652838/2012 Part 39

Hon. Saliann Scarpulla, J.S.C. HAMDI ULUKAYA, EUPHRATES, INC and CHOBANI, INC., Mot. Seq. No. 13

Defendants.

DEFENDANTS' MEMORANDUM IN OPPOSITION TO PLAINTIFF'S APPLICATION FOR A TEMPORARY RESTRAINING ORDER

CONTAINS CONFIDENTIAL INFORMATION PURSUANT TO PROTECTIVE ORDER

FILED: NEW YORK COUNTY CLERK 04/03/2014 INDEX NO. 652838/2012

NYSCEF DOC. NO. 327 RECEIVED NYSCEF: 04/03/2014

TABLE OF CONTENTS

Page

PRELIMINARY STATEMENT 1

FACTS 3

A. Nature of the Case 3

B. Plaintiff Ayse Giray alida "Sara Baran" 6

C. The Contemplated Transaction 8

ARGUMENT 9

I. PLAINTIFF IS NOT LIKELY TO SUCCEED ON THE MERITS 9

A. Plaintiff is Bereft of Evidence Supporting Her Fundamental Factual Contentions. 10

B. Relevant Indicia Show that Plaintiff is Not a Shareholder. 12

C. Plaintiff s Claim to Shareholder Status in Chobani as Derivative of Her Purported Status as a Euphrates Shareholder is Time-Barred. 15

D. Equity Precludes Plaintiff from Now Claiming to be a Shareholder. . 17

E. Plaintiff s Claim is Barred by a Judgment of Divorce .20

II. PLAINTIFF WILL NOT SUFFER IRREPARABLE INJURY IF INJUNCTIVE RELIEF IS DENIED 21

III. THE BALANCE OF EQUITIES FAVORS DEFENDANTS 22

IV. PLAINTIFF WILL BE UNABLE TO PROVIDE AN APPROPRIATE UNDERTAKING 24

CONCLUSION 25

TABLE OF AUTHORITIES

Cases

Amarant v. D 'Antonio,

Page(s)

197 A.D.2d 432 (1st Dep't 1993) 17, 19

Boronow v. Boronow,

71 N.Y.2d 284 (1988) 20

Chen v. Fischer,

6 N.Y.3d 94 (2005) 20

Deane v. City of New York Dep't of Bldgs.,

177 Misc. 2d 687 (Sup. Ct. 1998) 23, 24

Destiny USA Holdings, LLC v. Citigroup Global Markets Realty Corp.,

69 A.D.3d 212 (4th Dep't 2009) 25

Drews v. Eastern Sausage & Provision Co.,

125 F.Supp. 289 (S.D.N.Y. 1954) 16

Envt 'l Concern v. Larchwood Constr.,

101 A.D.2d 591 (2d Dep't 1984) 18

Ferolito v. Vultaggio,

36 Misc.3d 1227(A) (Sup. Ct. 2012) 23

Festinger v. Edrich, 8 Misc.3d 700 (Sup. Ct. Kings County 2005),

aff'd 32 A.D.3d 412 (2d Dep't 2006) 19

Fischer v. Deitsch,

168 A.D.2d 599 (2d Dep't 1990) 9, 24

Gerstner v. Katz,

38 A.D.3d 835 (2d Dep't 2007) 25

Gluck v. Hoary,

55 A.D.3d 668 (2d Dep't 2008) 9

Goldman v. Rio,

19 Misc.3d 384 (Sup. Ct. Nassau Co. 2008),

aff'd on other grounds 62 A.D.3d (2d Dept. 2009) 18

Hunt v. Hunt,

222 A.D.2d 759 (3d Dep't 1995) 13, 15

Idlewild 94-100 Clark, LLC v. City of New York,

898 N.Y.S.2d 808 (N.Y. Sup. Ct. 2010) 21

Kun v. Fulop,

71 A.D.3d 832 (2d Dep't 2010) 13, 15

11

TABLE OF AUTHORITIES (CONT'D)

Levy v. Braverman,

Page(s)

24 A.D.2d 430 (1st Dep't 1965) 18

Matter of Skorr v. Skorr Steel Co., Inc.,

29 A.D.3d 594 (2d Dep't 2006) 16

Mohamed v. Persaud,

35 Misc. 3d 1219(A) (N.Y. Sup. Ct. 2012) 22

Nobu Next Door, LLC v. Fine Arts Hous., Inc.,

4 N.Y.3d 839 (2005) 9

O'Connell v. Corcoran,

1 N.Y.3d 179 (2003) 20

Scott v. City of Buffalo,

16 Misc. 3d 259 (Sup. Ct. 2006), affd, 38 A.D.3d 1287( 4th Dep't 2007) 24

Scotto v. Mei,

219 A.D.2d 181 (1st Dep't 1996) 25

Shokin v. Geller,

16 Misc. 3d 1110(A) (Sup. Ct. 2007) 23

Sithe Energies, Inc. v. 335 Madison Ave., LLC,

45 A.D.3d 469 (1st Dep't 2007) 9

Turner v. American Metal Co.,

268 A.D. 239 (1st Dep't 1944) 16, 17

Welwart v. Dataware Elecs. Corp.,

277 A.D.2d 372 (2d Dep't 2000) 17

Rules

C.P.L.R. § 213(7) 17, 18

C.P.L.R. § 6312(b) 26

C.P.L.R. § 6313 9

New York Domestic Relations Law §236[13] .20

PRELIMINARY STATEMENT

More than a year after filing this case, and without yet having established that she is a

shareholder of Defendant Chobani, Inc. ("Chobani"), Plaintiff seeks to invoke the equitable

jurisdiction of the Court to enjoin a transaction which, even if she were a shareholder, would not

require her approval and from whose consummation she can articulate no harm, never mind

irreparable hann. As a threshold matter, for Plaintiff to prevail on her motion—which seeks to

prevent Defendant Hamdi Ulukaya from selling any shares of his stock in Chobani and to

provide her with a "seat at the table" to protect "interests" which she does not have—she must

first demonstrate by clear and convincing evidence that she is likely to succeed on the merits of

her claim that she is a shareholder of Chobani. Plaintiff s theory of ownership requires the Court

to disregard the facts, assume bald assertions that have not been proven, and venture down a

rabbit hole with Plaintiff: Plaintiff contends that she is a shareholder of Chobani because (1) she

asserts (but has not proven) that she is a shareholder of Euphrates, Inc. ("Euphrates")—a separate

company—and (2) she asserts (but has not proven) that Chobani was a corporate opportunity that

rightfully belonged to Euphrates. The critical weakness of Plaintiff s asserted standing to seek

relief is highlighted further by the fact that the issue of corporate opportunity, the theory upon

which Plaintiff claims her status as a shareholder of Chobani, is not even presently before the

Court under the bifurcation order; it is an issue to be taken up in the next phase of the litigation,

only in the event that she can prove that she is a shareholder of Euphrates. In any event the

statute of limitations ran on any corporate opportunity claim over a year before she brought suit.

In the nineteen months since Plaintiff filed this lawsuit, Plaintiff has not once tried to

challenge the manner in which Chobani has conducted its business and operations. Indeed, over

six months ago, Plaintiff voluntarily bargained away any supposed right to move for advance

notice of any corporate transactions in which Chobani planned to engage. All the while, and

since this case was filed, Chobani has undertaken numerous initiatives. It has launched and

marketed new product lines, invested in new advertising campaigns, and negotiated and

consummated financing transactions to fund its operations and expansion. Only now,

does Plaintiff object.

Ultimately, Plaintiff's brief makes clear that her motion is based not on the purported

merits of her lawsuit, but on a laundry list of alleged bad acts that she claims Mr. Ulukaya has

engaged in over the years—none of which is remotely relevant here. Because Plaintiff cannot

win on the merits of her claims, she has fabricated any number of fantastical and completely

baseless allegations. Although Plaintiff alleges that her own fabrications and these accusations

tilt the balance of equities in her favor, her understanding of the law is seriously misguided. As

the Court well knows, balancing the equities requires the Court to weigh the harm each side will

suffer in the absence or face of injunctive relief. It is not a license to attack the character of

one's adversary, let alone to do so by making baseless charges.

Unsurprisingly then, Plaintiff s motion suffers from numerous, independent failures each

of which taken alone would preclude the requested relief, but which, considered collectively,

demonstrate the absurdity of her motion. First, Plaintiff cannot meet her burden of proving by

clear and convincing evidence that she is likely to succeed on the merits of her claim that she is a

shareholder of Chobani. Setting aside the fact that no discovery has occurred on the issue of

corporate opportunity, and the fact that Plaintiff lacks any of the traditional indicia of equity

ownership (such as stock certificates or being listed on a stock ledger), Plaintiff s own

affirmative actions to date demonstrate that she never was a shareholder of Chobani and that

. Second, Plaintiff cannot establish that she will be irreparably and

2

immediately harmed absent obtaining an injunction; indeed, she can establish no harm at all.

Moreover, even if there was some harm that Plaintiff could articulate, she has made no showing

that money damages would not be an adequate remedy for whatever harm she might theorize.

Third, the balance of the equities sharply favors Chobani. Whereas Plaintiff cannot demonstrate

any harm—much less any irreparable harm—that would befall her absent injunctive relief, if an

injunction does issue and the transaction being contemplated does not go forward,

Fourth,

there is no way that Plaintiff could ever post a bond sufficient to indemnify

Chobani for the losses it would incur. For all these reasons, discussed in further detail below,

Plaintiff's motion should be denied in its entirety.

FACTS

A. Nature of the Case

Hamdi Ulukaya is a successful entrepreneur who founded Chobani (a company that

produces Greek Yogurt) and Euphrates, a separate company that produces feta cheese. In 1994,

Mr. Ulukaya came to this country from Turkey and, in 1997, met and later married Plaintiff

Around that same time in 1997, Mr. Ulukaya and his brother began making plans to start

Euphrates. Mr. Ulukaya also discussed with Plaintiff the possibility of her becoming a partial

owner of Euphrates. In fact, an early draft of a business plan contemplated Plaintiff becoming a

one-third owner. Plaintiff's involvement as an owner, however, was conditioned upon her

contributing start-up funds and complying with the various requirements imposed by financial

institutions providing loans to Euphrates, including signing a personal varantee—requirements

with which Mr. Ulukaya and his brother complied. Plaintiff did not, however, come through

with any money, was not willing to sign a personal guarantee for a lease and bank loan to

3

Euphrates, and did not become an owner of Euphrates. The fact that the sole shareholders of

Euphrates are Mr. Ulukaya and his brother is reflected in executed loan documents, personal

guarantees, and the stock certificates of Euphrates, all of which have been produced to Plaintiff

Plaintiff and Mr. Ulukaya divorced in 1999.

The seminal event in the startup of Euphrates was the closing of a $1,200,000 business

loan from NBT Bank in 2001 (guaranteed by the USDA) that allowed Euphrates to buy cheese-

making equipment to make feta cheese. Among other conditions, NBT Bank required the

owners of Euphrates to sign personal guarantees. (Exhibit 1, Conditional Commitment.)

Plaintiff did not sign a guarantee and is not mentioned at all in the loan documents. (Id.) Lowell

Gibson, a former Program Director with the USDA, and Ed Tomeck, a Senior Vice-President at

NBT both participated in the origination of the loan. Neither recalls Plaintiff s involvement in

the loan application process, and both have sworn that if Plaintiff were a part-owner of Euphrates

at the time, she would have been required to sign a personal guarantee for the loan. (Exhibit 2,

Affidavit of Lowell J. Gibson at Tff 12-13, Exhibit 3, Affidavit of Edward Tomeck at TT 12-13.).

As Mr. Tomeck states, "no such personal guarantee" was provided. (Exhibit 3. Affidavit of

Edward Tomeck at ¶ 13.)

In 2002, almost a year after the NBT loan closing, Euphrates began making cheese, but

business was slower than anticipated, and Mr. Ulukaya was soon looking at a range of options.

Plaintiff s family agreed to lend money to Mr. Ulukaya personally, and ultimately loaned him

approximately $185,000. Mr. Ulukaya repaid the loans made by Plaintiff s family with generous

interest; by 2006, Mr. Ulukaya had returned approximately twice that amount.

Separately, in 2003, Plaintiff approached Mr. Ulukaya with a renewed interest in

becoming an investor in Euphrates, this time saying that she wanted a letter that she could show

4

Turkish banking contacts to try to raise capital there.' Following that conversation, Mr. Ulukaya

provided Plaintiff with certain documents that explained the circumstances under which she

could become an owner of the company. (To her complaint in these proceedings, Plaintiff

attached as Exhibit B a one page hand-written letter from Mr. Ulukaya, which was one of these

documents.) Nothing came of Plaintiff s intent, and again, Plaintiff did not invest any monies in

Euphrates.

At the end of 2004, Mr. Ulukaya formed a second company, initially called Agro-Farma,

to make Greek Yogurt. Agro-Farma later changed its name to Chobani. Chobani is a very

different company from Euphrates. Whereas Euphrates makes feta cheese, Chobani makes

Greek Yogurt. Euphrates typically markets its product to food-service companies; Chobani

typically markets its product to the public. The two companies operate in different facilities and

use different equipment (because yogurt is made from different equipment than cheese), and they

secured their financing from different sources. As Mr. Ulukaya's success grew, Plaintiff

repeatedly initiated contact with him on seemingly friendly terms and requested money for

various reasons. After Mr. Ulukaya refused to accede to her requests for money, Plaintiff filed a

lawsuit alleging ownership in his companies.

With the Court's encouragement, the parties agreed to bifurcate the issues to be decided

in these proceedings. In Phase I, the Court will first determine whether Plaintiff is a shareholder

of either Euphrates or Chobani. (Exhibit 4, January 3, 2013, Stipulated Order.) The parties are

currently conducting discovery on this issue.

Plaintiff's brief asserts that Mr. Ulukaya contended in his deposition that he provided Plaintiff this letter so that she could use it to defraud Turkish banks. (Plaintiff's Brief at 5.) Contrary to Plaintiff s bald assertion, Mr. Ulukaya's testimony says nothing to suggest that either of them would use it to defraud lenders.

5

B. Plaintiff Ayse Giray a/k/a "Sara Baran"

Defendants deposed Plaintiff for two days on May 23 and 24, 2013,

, Plaintiff

uses two different identities, complete with different names

; public records show

judgments entered against "Ayse Giray" dating back to 1998.

; see e.g. Exhibit 6, Compendium of Default Judgments entered against Ayse

Giray.) In contrast, "Sara Baran," appears to own assets hidden from Ayse Giray's creditors. At

her deposition,

Even though there is no dispute that she lacks stock certificates or any other conventional

indicia of share ownership in both Chobani and Euphrates; yet Plaintiff still contends that she is a

shareholder of both companies. As to Euphrates, Plaintiff contends that she became a one-third

owner by allegedly investing approximately $198,000 in 1997 to 1999. (Exhibit 7, Compl. in 16-

17.) As to Chobani, Plaintiff contends that she became an owner because Chobani was a

wrongfully-diverted corporate opportunity of Euphrates. Plaintiff asserts that she has understood

herself to be a shareholder of Euphrates since 1997 and a shareholder of Chobani since 2007.

(Exhibit 7, Compl. IN 9, 10, 14, 20, 21, 26, 42, 43, 44.)

2

Whatever Plaintiff s motivation, the fact remains that she has continued to use both names and identities throughout the last 15 years and has made no attempt to refrain from using her "Ayse Giray" identity in publicly available materials—the most obvious example being this lawsuit.

6

Overwhelming documentary evidence and the testimony of disinterested third parties

refute Plaintiff s contention that she is a shareholder. For example, Plaintiff s own attorney and

accountant, Harry Binder, testified that while Plaintiff claimed to have "invested, loaned,

whatever" money in "a cheese factory," she was unable to provide him with credible

documentation regarding any purported loan or investment, and that Plaintiff "couldn't even

really explain the transaction." (Exhibit 8, H. Binder Dep. Tr. at 118:16-124:13.) ("[W]hatever

she did, it was just ridiculous.") Another third party witness, Mustafa Coskun, who provided a

loan to Mr. Ulukaya, testified that as of 2000—well after Plaintiff alleges she made her initial

investment—ownership of Euphrates was split between Mr. Ulukaya and his brother. (Exhibit 9,

M. Coskun Dep. Tr. at 32:21-33:25.) This is confirmed by numerous corporate records.

In addition, there

are no documents showing that Plaintiff actually transferred $198,000 to Mr. Ulukaya.

Moreover, Plaintiff s story is belied by her own conduct. Over the many years in which

she has claimed to understand herself to be a shareholder in Euphrates and Chobani, Plaintiff has

repeatedly denied owning an interest in either company—sometimes under oath. For example,

Likewise, •

3

7

C. The Contemplated Transaction

8

ARGUMENT

Preliminary injunctive relief is a "drastic remedy which should be used sparingly."

Fischer v. Deitsch, 168 A.D.2d 599, 601 (2d Dep't 1990). To prevail on an application for

injunctive relief, the movant must establish each of the following three elements by clear and

convincing evidence: (1) "immediate and irreparable" injury without the preliminary injunction;

(2) a likelihood of ultimate success on the merits; and (3) that the balance of equities weighs in

the movant's favor. C.P.L.R. 6301; see Nobu Next Door, LLC v. Fine Arts Hous., Inc., 4 N.Y.3d

839, 840 (2005) (reversing trial court's grant of preliminary injunction where equity did not

favor movant); Gluck v. Hoary, 55 A.D.3d 668, 668 (2d Dep't 2008) (burden on preliminary

injunction is "clear and convincing"). Moreover, because the relief Plaintiff seeks in this motion

is essentially the ultimate relief she seeks in her underlying lawsuit—namely, a voice in the

affairs of the Mr. Ulukaya's companies—she must make a heightened showing of "imperative,

urgent, or grave necessity." Sithe Energies, Inc. v. 335 Madison Ave., LLC, 45 A.D.3d 469, 470

(1st Dep't 2007) (reversing "preliminary injunction [that] improperly gives plaintiffs the ultimate

equitable relief sought in the action"). And because Plaintiff is also seeking a temporary

restraining order, she additionally must show that "loss or damages will result unless the

defendant is restrained before a hearing [on the preliminary injunction] can be had." C.P.L.R.

6313. Plaintiff cannot meet these standards and her motion should be denied in its entirety.

I. PLAINTIFF IS NOT LIKELY TO SUCCEED ON THE MERITS

Plaintiff s motion for a preliminary injunction fails at the outset because she cannot show,

by the clear and convincing evidence required, a likelihood of success on the merits of her claims

in this lawsuit. Gluck, 55 A.D.3d at 668 (affirming denial of preliminary injunction where

plaintiff failed to establish likelihood of success by clear and convincing evidence). Indeed, not

only does Plaintiff fall far short of her burden but, in fact, her claim to shareholder status in

9

Chobani is unlikely to succeed for multiple, independent reasons. First, Plaintiff has failed to

put forth clear and convincing evidence supporting the factual allegations in her complaint that

form the basis for her claim. Second, the indicia that do exist and that are relevant to the

question of share ownership overwhelmingly point to the conclusion that plaintiff is not a

shareholder of either Euphrates or Chobani. Third, any claim that Plaintiff is a shareholder in

Chobani by virtue of her purported derivative claim for usurpation of a corporate opportunity is

time-barred. Fourth, equity precludes the Court from recognizing Plaintiff as a shareholder.

Fifth, Plaintiff s claim is barred by her judgment of divorce with Mr. Ulukaya.

A. Plaintiff is Bereft of Evidence Supporting Her Fundamental Factual

Contentions.

Plaintiff s claim that she is likely to succeed on the merits is belied, as an initial matter,

by Plaintiff s inability to substantiate the fundamental allegations set forth in her verified

amended complaint. Plaintiff alleges that she is a shareholder in Chobani because she allegedly

provided start-up funds to Euphrates as a capital investment, and that because Chobani allegedly

was a diverted corporate opportunity of Euphrates, she is entitled to the same ownership

percentage in Chobani as she claims to hold in Euphrates. 4 No discovery at all has taken place

on this issue, so Plaintiff cannot establish a likelihood of success on this allegation.

But even if Chobani were a corporate opportunity of Euphrates, Plaintiff would need to

establish that she is a shareholder of Euphrates in order for it to mean anything with respect to

her. There is no evidence that Plaintiff ever became a shareholder of Euphrates by, as she

contends, providing start-up funds to Euphrates. Plaintiff contends that she "invested" $198,000

in the period of 1997 to 1999, that a further approximately $200,000 was "invested" in 2002 by

4 Plaintiff previously claimed that there was some sort of oral agreement by which she separately obtained an ownership interest in Chobani. Plaintiff appears to have abandoned that claim by failing to present it in her moving papers.

10

her family, and that she loaned Mr. Ulukaya $100,000 in 2003. There are no documents that

evidence the actual transfer and receipt of monies between Plaintiff and Mr. Ulukaya or

Euphrates in the timeframes that Plaintiff claims to have "invested" (or at any other time). For

example, there is not a single document showing that, between 1997 and 1999, Plaintiff

transferred and Mr. Ulukaya (or Euphrates) received $198,000 in start-up funds. 5 Similarly, there

is not a single document showing that, in 2003, Plaintiff transferred and Mr. Ulukaya (or

Euphrates) received $100,000. In fact, Plaintiff has not produced any direct evidence that she

even had $198,000 at her disposal between 1997 and 1999. Indeed, Defendants' investigation of

public records reveals that, starting in 1997, Plaintiff defaulted on several material financial

obligations and, by 1998, her creditors had secured judgments against her for approximately

$74,000—which seriously calls into question whether Plaintiff had the ability to fund a purported

$198,000 investment she now claims to have made in Euphrates. 6 What the documents do show

5 Plaintiff makes reference to a check dated March 12, 1998, in the amount of $7000, that she allegedly invested in Euphrates. As Plaintiff herself practically concedes, this check was deposited twice, and twice returned for insufficient funds the deposit slip provides no evidence to the contrary. Similarly, there is no direct evidence that any proceeds from Plaintiff s sale of real estate was invested in Euphrates. Further, as Mr. Ulukaya testified,

But even accepting Plaintiff s argument, any cheese imported in this period involved a different and separate company called Euphrates Importing.

Nor does Exhibit 19 to Plaintiff s brief evidence any investment of money in Euphrates. As Mr. Ulukaya testified,

6 Plaintiff's brief says that she sold properties she owned and used the proceeds to fund the startup of Euphrates. The deed stamps on the recorded documents reflect that the price paid for Unit 2H was $302,000 and it was subject to a $283,500 mortgage to National Standard Mortgage Corp. The price paid for Unit 2J was $74,000, and the property had a mortgage to Citibank against it in the amount of $74,000. It appears from the recordings

11

is that Plaintiff s family lent Mr. Ulukaya approximately $185,000 in 2002 and 2003, and that

Mr. Ulukaya repaid them approximately twice as much. 7 While Plaintiff has characterizes these

payments as further equity investments, Plaintiff s family is not claiming any equity interest in

Euphrates or Chobani.

In response, Plaintiff can only point to a few documents that, in reality, turn out to

corroborate Defendants' version of the facts—not Plaintiff s. Mr. Ulukaya's handwritten letter

of September 22, 2003 was provided when Plaintiff, for a second time, expressed an interest in

becoming an investor in Euphrates but, for a second time, she failed to come through with any

money.8 Likewise, the draft business plan dated October 1997 was completed years before

Euphrates obtained any financing or commenced operations. As Mr. Ulukaya testified,

Importantly, however, the documents to which Plaintiff repeatedly points all pertain to

Euphrates, not Chobani.

B. Relevant indicia show that Plaintiff is not a shareholder.

It is not disputed that Plaintiff does not now have, nor was she ever issued, a stock

certificate from either Euphrates or Chobani. (Exhibit 16, Plaintiff s Responses to Defendants

Requests for Admission.) While a fact-finder may consider other indicia, if any, bearing on the

in the Clerk's Office that Plaintiff might have received $30,000 net of mortgage payoffs, closing costs, and realtor commissions, assuming that all proceeds were not used to remove judgment creditors' liens on the property.

7 Documents associated with repayments to Plaintiff's family reflect that Mr. Ulukaya was repaying a loan. (See

e.g. Exhibit 15, Check from H. Ulukaya to M. Giray.)

8

12

issue to determine whether, even in the absence of stock certificates, a litigant is a shareholder in

a company, all of the indicia here show that Plaintiff is not a shareholder. See Kun v. Fulop, 71

A.D.3d 832, 834 (2d Dep't 2010) (plaintiff failed to establish shareholder status where "the

evidence showed that [plaintiff] never asked for or received any forms to report a shareholder's

distributed share of income from [the company], corporate tax forms, or any other indicia of

shareholder status").

Plaintiff s own lawyer and accountant testified that Plaintiff "couldn't even really explain

the transaction" by which she now claims to have become a shareholder. (Exhibit 8, H. Binder

Dep. Tr. at 118:16-124:13.) And in fact, Plaintiff has categorically denied being a shareholder

many times. For example, despite the fact that Plaintiff claims to have become a shareholder of

Euphrates in 1997,

Not only is this directly at odds with her current story that by 1997 she understood

herself to be a shareholder of Euphrates, but it is sufficient evidence by itself for the Court to

determine that Plaintiff is not a shareholder of Euphrates. In Hunt v. Hunt, the Third Department

rejected a similar claim by a plaintiff who, while lacking a stock certificate, claimed to be a

shareholder in a closely-held company. 222 A.D.2d 759 (3d Dep't 1995). There, despite the fact

that the plaintiff was listed as a shareholder on the corporation's tax returns for seven years and

was listed in a number of corporate documents as a principal of the business, the Third

Department held that the plaintiff failed to meet his burden of establishing that he was a

shareholder where he had disclaimed such ownership in, among other things, financial

statements submitted to the Family Court and to a bank. Id. at 761 ("It is significant that Donald

admitted on a number of occasions that he had no ownership in the corporation. In 1974 he

13

testified at a Family Court proceeding that he was not a shareholder in the business.") Plaintiff s

claim here is weaker than that of the plaintiff in Hunt. Plaintiff had no involvement with

Euphrates (and certainly none with Chobani) since its inception:

While Plaintiff argues that she is referred to as a 33% shareholder in a Euphrates business

plan drafted by Mr. Ulukaya in the fall of 1997—just as the idea for Euphrates was taking form

and more than three years before Euphrates closed a $1.2 million startup loan from NBT

Bank9—this draft document further undercuts any assertion by Plaintiff that she is a shareholder

of Euphrates (and certainly provides no support for the contention that she is a shareholder of

Chobani). As Mr. Ulukaya explained in his deposition testimony,

10 However, Plaintiff never

came through with the funds necessary to purchase this ownership interest and none of the

documents in the years thereafter include any reference to Plaintiff or any indication that she

owned any portion—let alone one-third—of Euphrates. This is

particularly important given the fact that, between 1997 and 2001, Euphrates was applying to

9 At this same time in the fall of 1997, the Ulukaya brothers submitted a proposal to the Fulton County Industrial Development Agency. As did the preliminary business plan, it reflected Plaintiff as a proposed 1/3 shareholder. FCIDA did not approve the proposal, and efforts to finance the proposed business continued over the ensuing years until NBT and USDA went forward in February 2001. In fact, an early document submitted to the USDA described the potential shareholders as Mr. Ulukaya, his brother, and a gentleman named Jeff Ward. What the documents demonstrate is that, in the early years of the company, there were many unknowns.

o Many things in draft business plan upon which Plaintiff relies did not come to pass as described. The product mix it proposed became strictly feta cheese. Euphrates concentrated on selling product in regional markets, not international ones. Equipment to manufacture the cheese came from a different supplier. Mr. Ulukaya's brother became an 8% shareholder instead of 33% as reflected in the business plan. The plan described in the fall of 1997 to FCEDC and to FCIDA differed considerably from what was financed and started in February 2001.

14

various banks and government institutions for small business loans needed to finance startup

costs. These banks required anyone who was going to be a stockholder in Euphrates, and thus

Mr. Ulukaya and his brother (who owns 8% of Euphrates), to sign personal guarantees for the

moneys being advanced. It is undisputed that Plaintiff never provided such a guarantee. As Ed

Tomeck of NBT Bank (the bank which provided a $1.2 million loan to Euphrates in 2001)

explained in an affidavit, there is no way that NBT Bank would have approved a loan to

Euphrates unless it had personal guarantees from each of its owners. (Exhibit 2, Affidavit of

Lowell J. Gibson at ¶1112-13, Exhibit 3, Affidavit of Edward Tomeck at ¶J 12-13.)

As in Kun and Hunt, Plaintiff has stated multiple other times, sometimes under penalty of

perjury, that she does not own stock in either business, including in documents

By way of example,

Similarly, after she filed suit, Plaintiff

C. Plaintiff's Claim to Shareholder Status in Chobani as Derivative of Her

Purported Status as a Euphrates Shareholder is Time-Barred.

Plaintiff claims that she is a shareholder of Chobani because Chobani was a wrongfully-

diverted corporate opportunity of Euphrates, she (as a purported Euphrates shareholder) should

have an ownership interest in Chobani equal to the ownership interest she claims to hold in

Euphrates. Putting aside the multiple substantive infirmities with this argument, including (as

explained above) Plaintiff s inability to establish that she is a shareholder of Euphrates, this

15

argument fails for the simple reason that any claim by Euphrates (or by Plaintiff derivatively as a

purported shareholder of Euphrates) is time-barred.

A claim for usurpation of a corporate opportunity is governed by a six-year statute of

limitations. See C.P.L.R. 213(7); Turner v. Am. Metal Co., 268 A.D. 239, 266 (1st Dep't 1944)

(statute of limitations against individual accrued at the latest when corporation formed to exploit

alleged corporate opportunity issued shares); Matter of Skorr v. Skorr Steel Co., Inc., 29 A.D.3d

594, 594 (2d Dep't 2006) (where plaintiff alleged usurpation of corporate opportunity to acquire

real property with loan from corporation, statute of limitations would run from purchase of

property). Here, Plaintiff s corporate usurpation claim accrued, and the statutory period to bring

a claim for usurpation began to run, when Chobani (f/k/a "Agro-Farma") was incorporated as a

standalone company created for the purpose of producing and distributing yogurt in December

2004, or, at the very latest, on August 6, 2005, when Agro-Farma closed a transaction to

purchase a defunct Kraft Foods plant in upstate New York that would house Chobani's

operations. See Turner, 268 A.D. 239 at 266 (statute of limitations against individual accrued at

the latest when corporation formed to exploit alleged corporate opportunity issued shares);

Drews v. E. Sausage & Provision Co., 125 F.Supp. 289, 292 (S.D.N.Y. 1954) (where the

purchase of certain property for the purpose of starting up new venture is the alleged usurpation,

the statute of limitations begins to accrue on the date the property was purchased). Counting

from the later of these dates, Plaintiff's complaint, which was filed on August 14, 2012, was filed

over a year too late. n

Nor can there be any merit to a contention by Plaintiff that her cause of action for

11 The purchase of the Kraft plant in upstate New York by Agro-Farma was a matter of public record, and thus any contention now by Plaintiff that she did not discover the purported usurpation until a later time is questionable at best. But for purposes of the application of the statute of limitations, it is irrelevant.

16

usurpation accrued at some later time. New York courts are clear that a claim for usurpation of

corporate opportunity does not continually accrue any time diversions of profits or some other

act purportedly belonging to the parent company occurs but, rather, is measured solely from the

initial diversion to the newly formed corporation. See, e.g., Welwart v. Dataware Elecs. Corp.,

277 A.D.2d 372, 373 (2d Dep't 2000) ("the limitations period is measured from the date of the

initial alleged breach in 1981 when the defendants allegedly deprived the plaintiff of his right to

the shares and began diverting profits, regardless of when the damages began to accrue"); see

also Turner, 268 A.D. at 244 ("[A]ny cause of action against [the alleged usurper] accrued not

later than April, 1918" when the stock allotted was delivered). Because the time period for

bringing a claim derivatively on behalf of Euphrates for usurpation of a corporate opportunity

expired at least a year before Plaintiff filed this lawsuit, any attempt by Plaintiff to premise her

ownership of stock in Chobani on a usurpation claim must fail as a matter of law.

D. Equity precludes Plaintiff from now claiming to be a shareholder.

Even if Plaintiff were able to substantiate her claim that she is a shareholder of

Chobani—which she is not—equity would preclude this Court from recognizing her as a

shareholder. Indeed, despite Plaintiff's claim in this litigation that she has understood herself to

be a shareholder of Euphrates since 1997 and of Chobani since 2007, she has told a directly

contradictory story to (at least)

The doctrines of estoppel and unclean hands each foreclose Plaintiff s attempt to change

her story now. See, e.g., Amarant v. D 'Antonio, 197 A.D.2d 432, 434 (1st Dep't 1993) (unclean

hands may bar injunctive relief concerning enforcement of a shareholders' agreement). The

doctrine of estoppel provides that, if Plaintiff failed to disclose an ownership interest in

Euphrates or Chobani that she now claims to have in a prior proceeding, then Plaintiff is

17

estopped from taking a different position in this proceeding. Envt'l Concern v. Larchwood

Constr., 101 A.D.2d 591, 594 (2d Dep't 1984) (estoppel barred plaintiff from taking position

inconsistent with prior proceedings). For example, in Goldman v. Rio, the court dismissed the

plaintiff s claims for the value of his purported equity in a dissolved partnership, as well as

dividends from the partnership because, in his bankruptcy proceeding, he previously "listed no

assets from which dividends could be paid to creditors." 853 N.Y.S.2d 837, 839 (Sup. Ct.

Nassau Co. 2008), aff'd on other grounds 62 A.D.3d (2d Dept. 2009).

Here, Plaintiff has made numerous representations over the years—some under penalty of

perjury—that directly contradict the story that she now tells this Court.

All of these statements are independently sufficient to preclude, as a matter of equity, the claims

asserted by Plaintiff in this lawsuit and, for the purposes of this motion, demonstrate that

Plaintiff cannot establish by clear and convincing evidence a likelihood that she will prevail on

her claims against Defendants.

Separately, the doctrine of unclean hands also precludes the Court from crediting

Plaintiff s story that she had "her" shares issued in Mr. Ulukaya's name. Levy v. Braverman, 24

A.D.2d 430, 430 (1st Dep't 1965) (denying equitable relief where plaintiff had stock issued in

18

defendant's name so as to hinder claims of plaintiff's creditors); Amarant v. D'Antonio, 197

A.D.2d 432, 434 (1st Dep't 1993) (unclean hands may bar injunctive relief concerning

enforcement of a shareholders' agreement). 12 Here, the numerous default judgments entered

against Plaintiff's "Ayse Giray" identity illustrate that any attempt to have her shares issued in

another's name would only have been a scheme to defraud her many creditors.

While Plaintiff made clear in a March 31 letter to the Court that her moving papers would

be replete with salacious and sensational details about supposed bad acts perpetrated by Mr.

Ulukaya (none of which are even remotely accurate), these allegations have no relevance to

Defendants' ability to invoke the equitable defenses described here, nor are they relevant for any

other purpose. In fact, the allegations are completely baseless, or simply rank hearsay, espoused

by a disgruntled former employee whose irrelevant testimony Plaintiff has gratuitously procured

for the purpose of distracting from the insufficiency of her own claims. Plaintiff s conduct

makes clear that her actual objective in filing this motion is try her case in the press. (See, e.g.,

Exhibit 17, March 30, 2013 E-mail ("Hamdi's bad acts as testified to by witnesses and as

evidenced in documents involving his representations to the USDA, NYS Department of

Taxation and Finance, banks, lenders, his acts towards a competitor, consumers, employees and

prior investors will be presented."); see also Exhibit 18, March 31, 2013 Letter to Court.) While

Defendants would be glad to respond to all of Plaintiff's baseless claims, none of those claims

have anything to do with Plaintiff's injunction request.

12 Whether Plaintiff's inequitable conduct harmed any of Defendants is not a prerequisite to Defendants invoking an unclean hands defense. "It has been explicitly held that where a plaintiff transfers property to a defendant . . . in order to defeat the interests of a third party, such as possible claims of creditors, a showing that the defendant was actually injured by plaintiffs conduct is not required" for an unclean hands defense. Festinger v. Edrich, 8

Misc.3d 700, 705 (Sup. Ct. Kings County 2005) (emphasis added), gild 32 A.D.3d 412, 414 (2d Dep't 2006) (action to impose constructive trust upon real property barred where plaintiff's entrustment of property to sister was intended to place assets out of reach of creditors).

19

E. Plaintiff's claim is barred by a judgment of divorce.

Plaintiff s claim to Euphrates ownership also fails because it is barred by her judgment of

divorce with Mr. Ulukaya. It is well settled in New York that the court in a divorce action shall

determine the respective rights of the parties in their separate or marital property. New York

Domestic Relations Law §236[B] (5) (a) provides:

Except where the parties have provided in an agreement for the disposition of

their property, pursuant to subdivision three of this part, the court, in an action

wherein all or part of the relief granted is divorce . . . shall determine the

respective property rights of the parties in their separate or marital property,

and shall provide for the disposition thereof in the final judgment.

The New York Court of Appeals has recognized that a final judgment of divorce settles the

parties' rights pertaining not only to those issues that were actually litigated but also as to those

issues that could have been litigated. Chen v. Fischer, 6 N.Y.3d 94 (2005); O'Connell v.

Corcorani l N.Y.3d 179 (2003). In Boronow v. Boronow, 71 N.Y.2d 284 (1988), the Court of

Appeals dismissed the wife's post-divorce action against her former husband in which she

sought a declaratory judgment that she was entitled to one-half of all property, real and personal,

including the former marital residence and held "ancillary issues like title to marital property are

certainly intertwined and constitute issues which generally can be fairly and efficiently resolved

with the core issue. The courts and the parties should ordinarily be able to plan for the resolution

of all issues relating to the marriage relationship in a single action."

The complaint for divorce and accompanying affidavit stated that

Thus, to the extent Giray's

claims that her alleged 33% interest in Euphrates constitutes her separate property, and not her

share of marital property, such claim nonetheless could have and should have been raised and

20

determined in the 1999 divorce action. The law required Plaintiff to have raised the issue of her

alleged one-third interest in Euphrates in the 1999 divorce action, and makes clear that she is

barred from maintaining these claims in the current action. Mr. Ulukaya had the right to rely on

the judgment as a final determination as any property, separate or marital.

II. PLAINTIFF WILL NOT SUFFER IRREPARABLE INJURY IF INJUNCTIVE RELIEF IS DENIED

Even though imminent, irreparable harm is a the sine qua non of injunctive relief,

Plaintiff s motion fails to present a cogent theory of any harm at all—let alone irreparable

harm—absent the relief she is seeking in this motion. Plaintiff s threadbare effort falls far short

of the standard required for injunctive relief. Idlewild 94-100 Clark, LLC v. City of N Y, 898

N.Y.S.2d 808, 823 (Sup. Ct. N.Y. County 2010) (denying preliminary injunction where plaintiffs

failed to demonstrate any "immediate and irreparable harm' . . . that would stem from a denial

of their request for a preliminary injunction").

First, and most importantly, Plaintiff has failed to show that the transaction she seeks to

enjoin would change the percentage of equity Plaintiff claims to own in Chobani. Plaintiff

contends that she owns, at most, 53% of Chobani; she does not question that at least 47% of the

company belongs to Mr. Ulukaya. The press articles upon which Plaintiff relies in bringing his

motion report that the proposed transaction contemplates a sale of a 15% equity stake. Thus,

even if the Court takes as true Plaintiff s contention that she owns "either 33% or 53%" of

Chobani, a sale of 15% equity would not change her purported ownership interest. Under these

circumstances, Plaintiff could not possibly establish any harm to her (let alone irreparable harm)

if the transaction being contemplated is consummated because the amount of equity that would

be sold is far less than the 47% that Mr. Ulukaya indisputably owns.

Tacitly conceding this fact, Plaintiff resorts to misdirection. She claims that even the sale

21

of a minority interest—that she cannot show changes her purported shares—will somehow affect

her unfairly. This assertion is completely baseless. In addition to asking the Court to presume

that Plaintiff is a shareholder, she is now seeking relief of a type that would have necessitated

that she have been a party to some sort of shareholder agreement with Mr. Ulukaya—for

example, a prohibition on Mr. Ulukaya selling any of his own equity stake. Obviously, no such

agreement exists, and Plaintiff s implication that there is some sort of obligation is belied by her

own testimony,

Second, Plaintiff has failed to meet her burden of showing that whatever harm she might

theorize is not compensable by money damages. New York courts have routinely recognized

that ". . . an injury compensable in money is not irreparable." Mohamed v. Persaud, 35 Misc. 3d

1219(A) (Sup. Ct. Queens Co. 2012). Here, Plaintiff s own verified amended complaint states

that she is seeking money damages, presumably because she believes that her purported equity

interest is something that can be valued. As such, Plaintiff cannot establish, by clear and

convincing evidence, any irreparable injury.

III. THE BALANCE OF EQUITIES FAVORS DEFENDANTS

Plaintiff, on the other hand, faces no

irreparable harm as discussed above, and, moreover comes to this Court with unclean hands.

The balance of the equities tips decisively in favor of Defendants.

22

First, as set forth above, Plaintiff has not met her burden of showing that her alleged

interest in Euphrates and Chobani is affected by the contemplated transaction. Even though the

Court has not made any determination that she is a shareholder, Plaintiff appears determined to

block a sale of a 15% or less interest as rumored in the press. Setting aside the fact that Plaintiff

has yet to prove her status as a shareholder of Chobani (or Euphrates), Plaintiff fails to explain

how any such transaction would actually halm her, much less how it would cause irreparable

injury necessitating an injunction. Indeed, even if Plaintiff could prove that she owns 53% of

Chobani—which she cannot—the Court should not allow Plaintiff to interfere in a transaction for

a sale of a minority equity interest that she does not even claim to own. These factors weigh in

Defendants' favor. Deane v. City of N Y Dep't of Bldgs.,177 Misc. 2d 687, 699 (Sup. Ct. N.Y.

County 1998) (balance of equities favored defendant which "invested substantial time and

energy" into transaction and stood "to lose a great deal of money" and business opportunity).

Second, as set forth above, Defendants' affirmative defense of unclean hands precludes

Plaintiff's recovery in her underlying suit; but moreover, under settled case law, Plaintiff s

unclean hands also forecloses granting the injunctive relief requested here. Shokin v. Geller, 16

Misc. 3d 1110(A), at *3 (Sup. Ct. N.Y. County 2007) (denying injunction where balance of

equities were against plaintiff with unclean hands); Ferolito v. Vultaggio, 36 Misc.3d 1227(A), at

*3 (Sup. Ct. N.Y. County 2012) ("In balancing the equities, the court should consider various

factors, including...whether plaintiff has unclean hands.").

Third, Plaintiff seeks an extraordinary remedy that is simply unjustified given the facts.

Plaintiff's proposed injunction threatens substantial and irreparable harm to Chobani.

23

Injunctive relief is a "drastic remedy which should be used sparingly."

Fischer, 168 A.D.2d at 601 (2d Dep't 1990). Plaintiff cannot put forth any facts meriting the

extreme relief requested. Taken together, the equities favor Defendants. Deane,177 Misc. 2d at

699 (denying injunctive relief where equities favored defendant); Scott v. City of Buffalo, 16

Misc. 3d 259, 292 (Sup. Ct. N. Y. Co. 2006), affd, 38 A.D.3d 1287 (4th Dep't 2007) (same).

IV. PLAINTIFF WILL BE UNABLE TO PROVIDE AN APPROPRIATE UNDERTAKING

Plaintiff is incapable of providing an undertaking sufficient to compensate Defendants for

13

24

the financial harm faced should an injunction be granted, and therefore her motion should be

rejected. A bond must be furnished before a grant of a preliminary injunction. See C.P.L.R.

6312(b); Gerstner v. Katz, 38 A.D.3d 835, 836 (2d Dep't 2007) (trial court erred in granting

injunction without requiring undertaking from plaintiff); Scotto v. Mei, 219 A.D.2d 181, 182,

184 (1st Dep't 1996) (trial court erred in granting injunction without requiring undertaking

where defendants faced "serious financial consequences"). The undertaking must be sufficient

to "reimburse [Defendants] for damages sustained if it were later determined that the preliminary

injunction was erroneously granted." Gerstner, 38 A.D.3d at 836. In the context of an

anticipated corporate transaction, parties seeking injunctive relief have been required to post

multi-million dollar bonds in light of the potential damages faced by defendants. See Destiny

USA Holdings, LLC v. Citigroup Global Mkts. Realty Corp., 69 A.D.3d 212, 224 (4th Dep't

2009) ($15 million undertaking reasonable where bank was enjoined from terminating loan).

CONCLUSION

For the foregoing reasons, Defendants respectfully request that the Court deny Plaintiff s

motion for injunctive relief.

25

FOX Rt HI D LLP

i ..

Dated: April 3, 2014 Respectfully submitted,

Yosef J. Rierner, P.C. David S. Flugman Robert A. Gretch 601 Lexington Avenue New York, New York 10022 Telephone: (212) 446-4800

-- and --

HARRIS BEACH PLLC

Douglas A. Foss 99 Garnsey Road Pittsford, New York 14534 Telephone: (585) 419-8800

Attorneys for Defendants Hamdi Ulukaya

and Chobani, Inc.

Scott L. ick 2000 Mar t Street 20th Floor Philadelphia, PA Telephone: (215) 299-2860

FOX ROTHSCHILD LLP John A. Wait 100 Park Avenue Suite 1500 New York, NY 10017 Telephone: (212) 878-7900

Attorneys for Defendant Euphrates, Inc.

TO:

ROSENBERG FELDMAN SMITH, LLP Richard B. Feldman Michael H. Smith Stephen J. Sassoon 551 Fifth Avenue, 24th Floor New York, New York 10176 Telephone: (212) 682-3454

Attorneys for Plaintiff Ayse Giray