Free Motion for Preliminary Injunction - District Court of Connecticut - Connecticut

Case 3:02-cv—02¥-AVC Document 191 Filed 182/2004 Page 1 of 4
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF CONNECTICUT
CROWN THEATRES, L.P., )
)
Plaintiff, )
)
v. ) Case No. 3:02CV2272AVC
) Jury Trial Demanded
MILTON L. DALY, TAYLOR-LEIGH, )
INC., ANNE E. DALY, JAMES C. )
CELLA, G.U.S. DEVELOPMENT, INC., ) November 10, 2004
JAMES T. MARTINO AND JAMES )
THOMAS MARTINO, ARCHITECT, )
P.C., and RCD HUDSON, LLC, )
)
Defendants. )
PLAINTIFF CROWN THEATRES, L.P.’S MOTION FOR
ENTRY OF A TEMPORARY RESTRAININ G ORDER AND
PRELIMINARY INJUNCTION AGAINST DEFENDANT MILTON L. DALY
Plaintiff Crown Theatres, L.P. ("Crown Theatres") hereby moves this Court to enter a
temporary restraining order and preliminary injunction enjoining Defendant Milton L. Daly
("Daly") from dissipating assets held in the accounts of Odyssey Entertainment LLC
("Odyssey"). Specifically, Crown Theatres requests that this Court enter an order prohibiting
Daly from (1) interfering with Odyssey’s monthly interest payments on the promissory note (the
"Note") held by Daly and his wife, defendant Anne E. Daly, and (2) causing Odyssey to make
any extraordinary expenditures, including but not limited to embarking on his current plans to
transform Odyssey’s only asset, the Riviera 12 movie theatre in Foley, Alabama, into a "cinema
bistro." In support of this motion, Crown Theatres states as follows:
1. Crown Theatres instituted this action on December 20, 2002 against Daly and
others, seeking legal and equitable relief for injuries caused by a massive scheme to defraud
Crown Theatres engineered by Daly and construction consultant Robert Beacher. As a result of
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Case 3:02-cv—02¥-AVC Document 191 Filed 182/2004 Page 2 of 4
that scheme, Daly has admitted that he received at least $4.2 million rightfiilly belonging to
Crown Theatres.
2. Daly is currently the 70% owner of Odyssey, and is responsible for its day-to—day
operation. Daly admits that at least $1.2 million of the funds taken from Crown Theatres were
invested in Odyssey.
3. Recently, Daly has announced his intentions to transform Odyssey into a "cinema
bistro," featuring a full food menu, beer and wine and "love seats." This proposal would require
the entire theater to be retrofitted and would require substantial, expensive construction.
According to Daly’s business partner, Robert Abramsky, Daly is seeking to spend the
approximately $600,000 in cash accumulated in Odyssey’s bank accounts on this speculative
endeavor.
4. Meanwhile, despite the existence of a $600,000 cash reserve, Daly has caused
Odyssey to cease making the approximately $20,000 monthly payments on the Note, which, by
agreement, have been paid to an escrow accotmt for the benefit of Crown Theatres.
5. Crown Theatres has a substantial likelihood of success on the merits of its case
against Daly. Daly has admitted to receiving $4.2 million of Crown Theatres’ money, and has
admitted that judgment should enter against him for breaching his fiduciary duties to Crown
Theatres. Crown Theatres is likely to succeed on its other claims as well, based on Daly’s
admissions and the undisputed evidence showing the flow of funds from Crown Theatres into
accounts controlled by Daly.
6. Should Daly be allowed to go forward with his "retrofit" at the expense of making
payments on the Odyssey note, Crown Theatres will be irreparably harmed, both because Daly’s
investment plan is incredibly speculative, and because there is a substantial risk, given his
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Case 3:02-cv—02¥-AVC Document 191 Filed 182/2004 Page 3 of 4
history, that Daly will attempt to siphon funds used in a large scale construction proj ect into his
own pockets.
WHEREF ORE, for the reasons stated above and in the attached Memorandum of Law,
plaintiff Crown Theatres, L.P. respectfully requests that this Court enter an order:
A. restraining Milton Daly from causing Odyssey Entertainment LLC to expend
funds on any construction proj ect, renovation project, retrofitting proj ect or otherwise, involving
the Starcoast Riviera 12 Cinemas in Foley, Alabama, including but not limited to any steps to
transform the theater into a "cinema bistro" including any alternation of the food service
facilities and the construction of stadium seating;
B. ordering Milton Daly to cause Odyssey Entertainment LLC to make monthly
interest payments on the promissory note held by Milton L. Daly and Anne E. Daly into the
escrow account maintained by counsel for the Dalys as trustee.
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Case 3:02-cv—02%-AVC Document 191 Filed 162/2004 Page 4 of 4
Respectfully submitted,
CROWN THEATRES, L.P.
~» 1 \» 0 ( 1l .
By: {)g{)\iW“ ‘ M Eng p2U1'°l0A W
H. James Pickerstein (Bar No. Ct 05094)
Calvin K. Woo (Bar No. Ct 24951)
PEPE & HAZARD, LLP
30 Jelliff Lane
Southport, CT 06490
(203) 319-4000
(203) 259-0251 (fax)
[email protected]
[email protected]
and
Craig C. Martin (Bar No. Ct 12198)
Lawrence S. Schaner (Bar No. Ct 24756)
J ENNER & BLOCK, LLC
One IBM Plaza
Chicago, IL 60611
(312) 222-9350
(312) 840-7776 (fax)
[email protected]
[email protected]
Dated: November 10, 2004
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