Marc Kulick v. YSA Investments 1, LLC

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

MARC KULICK, VESTA HOLDINGS, )
LLC, and ASSET HOLDER, LLC )
)
Plaintiffs, )
)
v. ) C.A. No. 2025-1319-KSJM
)
YSA INVESTMENTS 1, LLC, )
)
Defendant. )
)
)
YSA INVESTMENTS 1, LLC, )
)
Counterclaim-Plaintiff and )
Third-Party Plaintiff, )
)
v. )
)
MARC KULICK, VESTA HOLDINGS, )
LLC, et al., )
)
Counterclaim-Defendants )
and Third-Party )
Defendants. )

POST-TRIAL MEMORANDUM OPINION

Date Submitted: April 9, 2026
Date Decided: June 9, 2026

Sean J. Bellew, BELLEW LLC, Wilmington, Delaware; Benjamin H. Brodsky,
Michael Fisher, BRODSKY FOTIU-WOJTOWICZ, PLLC, Miami, Florida; Counsel
for Plaintiffs and Counterclaim-Defendants, Marc Kulick, Vesta Holdings, LLC, and
Asset Holder, LLC.

Sarah R. Martin, Samuel L. Moultrie, GREENBERG TRAURIG LLP, Wilmington,
Delaware; Joel Tasca, Kerry Kleinman, GREENBERG TRAURIG LLP, Las Vegas,
Nevada; Counsel for Defendant and Counterclaim and Third-Party Plaintiff YSA
Investments 1, LLC.

McCORMICK, C.
Plaintiff Marc Kulick controls and manages a portfolio of 34 multifamily real

estate assets in Oklahoma, Arkansas, and Kansas. Beginning in October 2024,

Defendant YSA Investments 1, LLC loaned the Kulick-led plaintiff entities millions

of dollars. In February 2025, Kulick asked YSA for another loan. Because the

amount requested was twice as large as any previous loan, YSA demanded better

terms and additional security. In response, cash-strapped Kulick proposed an

extremely favorable interest rate and agreed to pledge his entire real estate portfolio.

YSA accepted the terms. And Kulick signed a joinder committing all entities that he

owned, in whole or part, or managed or controlled directly or indirectly, to the

obligations in the loan agreements. Kulick later defaulted on four loans, including

the February loan, and YSA placed second mortgages on properties in Kulick’s

portfolio. Kulick filed this litigation to require that YSA remove the second

mortgages and to enjoin YSA from recording additional second mortgages. The case

proceeded to trial.

The key issue is whether YSA had the right to record mortgages on the

properties. Kulick argues that the loan agreements identified as collateral interests

in the holding companies, and not the properties at issue. But this argument does

not matter, because the loan documents granted YSA expansive rights to take actions

against real property owned by the collateral, including the properties. YSA

exercised that right by recording the second mortgages. Kulick also argues that the

loans cannot be enforced because their terms were predatory, usurious, and against

public policy. Setting aside the fact that Kulick proposed the loan terms about which
he now complains, this defense fails for a more basic reason—Delaware law does not

extend usury defenses to limited liability companies like the plaintiff entities. This

decision therefore enters judgment for YSA.

I. FACTUAL BACKGROUND

The facts are drawn from the 222 joint trial exhibits, live testimony from four

witnesses, deposition testimony from two fact witnesses, and 22 stipulations of fact.

These are the facts as the court finds them after trial.1

A. Marc Kulick And The Vesta Entities

Kulick controls and manages a portfolio of 34 multifamily real estate assets in

Oklahoma, Arkansas, and Kansas (the “Properties”).2 The Properties are owned by

1 This decision cites to: C.A. No. 2025-1319-KSJM docket entries (by “Dkt.” number);

trial exhibits (by “JX-” number); the trial transcript, Dkt. 98 (by “Trial Tr. at”);
stipulated facts set forth in the parties’ Joint Pre-Trial Order, Dkt. 88 (“PTO”); and
the Transcript of the November 25, 2025 hearing on Plaintiffs’ Motion for Expedited
Proceedings and Motion for Expedited Preliminary and Permanent Injunction, Dkt.
25 (“11/25/25 Hr’g Tr.”). The parties called the following fact witnesses: Marc Kulick
(owner and controller of Plaintiffs Vesta and Asset Holder); Efraim Diveroli (YSA’s
principal); Robert Miley (YSA’s Rule 30(b)(6) representative); John Hall (Defendant’s
expert). The parties submitted the deposition transcripts of the live witnesses, except
for John Hall, and called the following witnesses by deposition only: Kara Thomas
(Controller at Vesta Realty) and Courtney Merritt (Controller at Vesta Realty). The
transcripts of the witnesses’ respective depositions are cited using the witnesses’ last
name and “Dep. Tr.” The decision notes in citation form where a witness was
designated to testify under Rule 30(b)(6). This decision cites the following declaration
by the declarant’s last name: Christopher Rogers (Partner at Capital Fund Law
Group), Dkt. 86 (“Rogers Decl.”).
2 JX-185; Trial Tr. at 6:23–7:4 (Kulick).
Some of Kulick’s 34 assets have a tenancy in
common (“TIC”) ownership structure that results in two or more entities serving as
the ultimate owners of the TIC assets. Trial Tr. at 7:5–8:1 (Kulick).

2
34 separate, single-purpose limited liability companies (the “Title Owners”).3 Each

Title Owner is owned by one or more holding company (the “Intermediate Holding

Companies”).4 The Title Owners are capitalized by investments at the Intermediate

Holding Company level.5

Plaintiffs Vesta Holdings, LLC and Asset Holder, LLC (with Kulick, the

“Plaintiffs”)6 are Kulick’s personal investment vehicles.7 Kulick is the sole owner and

manager of Vesta and Asset Holder. 8 Vesta and Asset Holder hold membership

interests in several Intermediate Holding Companies.9 Kulick also holds an interest

in all the Title Owners.10

B. Plaintiffs Seek Short-Term Loans From Defendant.

In 2024, Kulick was in search of short-term financing for one of the

Properties.11 An acquaintance introduced Kulick to Efraim Diveroli. Diveroli is the

3 Trial Tr. at 7:5–8:1, 115:22–116:17 (Kulick); JX-27 at 1, 41, 81, 121, 136, 175, 192,

207, 229, 249, 264, 304, 343, 383, 398, 413, 453, 468, 508, 550, 567, 584, 599, 639, 680,
721, 763, 803; see JX-221; JX-215; JX-11; JX-169 §§ 1–3, Ex. A; compare PTO ¶ 6 with
JX-27 at 1, 41, 81, 121, 136, 175, 192, 207, 229, 249, 264, 304, 343, 383, 398, 413, 453,
468, 508, 550, 567, 584, 599, 639, 680, 721, 763, 803.
4 Trial Tr. at 7:5–8:1 (Kulick); see JX-198.

5 Trial Tr. at 7:5–8:1 (Kulick).

6 Id. at 8:7–18 (Kulick).

7 Id. at 8:7–24 (Kulick).

8 Id. at 8:7–8:18 (Kulick).

9 Id. at 9:2–9:14 (Kulick).

10 Id. at 49:17–51:1 (Kulick).

11 JX-3 at 1; Trial Tr. at 9:18–10:8 (Kulick); Trial Tr. at 146:21–147:22 (Diveroli).

3
principal of Defendant YSA Investments 1, LLC (“Defendant” or “YSA”),12 a special

purpose vehicle for Diveroli’s commercial lending.13 Kulick connected with Diveroli

in September 2024. Kulick urged Diveroli to finance some of his loans, claiming “[i]t’s

the easiest money you’ll ever make” and that Diveroli has no reason to worry about

losing his investment.14

On September 7, 2024, Kulick provided YSA a form agreement for the proposed

loan.15 On September 29, Kulick and his counsel provided YSA’s counsel and Diveroli

the material loan terms.16 The terms included: a loan of $775,000, an interest rate of

7% per month (84% annualized), a 2% closing fee for YSA, and a right of first refusal

in favor of YSA.17 Kulick, Diveroli, and YSA’s counsel discussed the proposed loan.18

After, YSA’s counsel proposed more detailed descriptions of the material terms, and

12 Dkt. 81 ¶ 12.

13 Trial Tr. at 146:10–20 (Diveroli); see Dkt. 81 ¶ 12.

14 JX-3 at 4; JX-4 (attaching a draft loan agreement). The initial draft of the loan
document contemplated an interest rate of 20% per annum, compounding annually.
JX-4 at 2. Kulick explained his goal for the interest rate was to provide Diveroli “10%
over the 3-month term.” JX-3 at 10.
15 JX-4 (providing Diveroli initial versions of a promissory note and a collateral pledge

and security agreement); JX-3 at 2–12; see JX-6 at 4. The “form agreement” Kulick
provided the borrower would have “[n]o right of rescission, setoff, abatement,
diminution, counterclaim, or defense . . . with respect to this Note or any other Loan
Documents.” JX-4 at 4.
16 JX-6; Trial Tr. at 10:11–13 (Kulick).

17 JX-5 at 1–2 (“Efraim and I have basically finished our deal for Parc 1010 EM.”);

JX-3 at 2–12.
18 See JX-46.

4
the parties deferred to Kulick’s counsel to revise the documents consistent with that

proposal.19

Kulick agreed to the revised terms on October 2 and his attorney agreed to

update the drafts.20

The parties closed the transaction on October 8, 2024 (the “October 8 Loan”).21

The October 8 Loan included a Promissory Note (“Note”), a Collateral Pledge and

Security Agreement (“CPSA”), and a Personal Guaranty and Right of First Offer (the

“Guaranty” and collectively, the “Loan Documents”).22

The October 8 Loan made Asset Holder the Borrower, Vesta the Pledgor, and

YSA as the Lender.23 YSA loaned Asset Holder $775,000, maturing ninety days after

closing.24 Asset Holder and Pledgor secured the October 8 Loan with “Collateral”

defined as “Unencumbered Interests” and “Encumbered Interests” in the form of

membership interests that Kulick held in the Intermediate Holding Companies.25

19 JX-5 at 1–2 (noting that Kulick’s counsel “prefer[ed] to make the initial edits” to
the documents Kulick previously provided); JX-46 at 7–8.
20 JX-6.

21 PTO ¶ 7; JX-10.

22 Kulick Day 1 Dep. Tr. at 28:19–23.

23 JX-10 at 1.

24 Id.

25 Id.at 9. For the October 8 Loan, the Unencumbered Interests were Kulick’s
membership interest in the following Intermediate Holding Companies: Capitol on
28th Investors, LLC, Remington Ranch Investors, LLC, Copperfield Investors, LLC,
and Putnam Investors, LLC. Id. Kulick represented that Asset Holder, as borrower,
“owns the Unencumbered Collateral absolutely and free of any . . . encumbrance” and
Asset Holder “has the unencumbered and unrestricted right to pledge the
Unencumbered Collateral.” Id. at 11.

5
The CPSA included a Power of Attorney provision applicable in the event of a

borrower breach proposed by YSA on October 3. That day, YSA’s counsel asked

Kulick to provide a list of suits filed against “Vesta and its affiliated entities” and to

identify any UCC liens.26 A UCC search precipitated YSA’s request.27 Kulick then

identified nine civil actions and stated that “none of the entities that are a party to

this loan have any UCCs filed against them[.]”28 YSA proposed additional terms,

including the Power of Attorney provision. The Power of Attorney provision, quoted

more fully in the below legal analysis, gave YSA the right to “take whatever steps

that it deems necessary in its sole discretion to secure and protect its interests . . .

includ[ing] but not be limited to taking any action against any of the Collateral or

any real or personal property owned by the Collateral.”29 Kulick agreed to most of

the proposed terms but noted that he would need a few hours to consider the Power

of Attorney,30 which Kulick later agreed to.31

26 JX-7 at 4.

27 Id.

28 Id. at 3.

29 JX-9 at 2–3.

30 Id. at 2; JX-3 at 15; JX-46 (discussing representations and warranties of the loan).

For instance, Kulick agreed to “waive any defense or asset protection mechanism that
may be available in the event of a default.” JX-9 at 2.
31 Trial Tr. at 54:2–56:5 (Kulick); JX-46.

6
The October 8 Loan was due with interest on January 8, 2025,32 when Kulick

was obligated to remit payment of $829,250. 33 But Kulick requested a one-week

extension on January 8,34 when he informed Diveroli he was short over $500,000.35

Diveroli agreed to a short extension on the condition that Kulick pay an additional

$25,000.36 Kulick paid the $829,250 and additional $25,000 on January 21.37 And

YSA continued loaning Kulick money.

C. Defendants Provide Additional Loans Subject To A Joinder.

By February 2025, YSA had loaned Kulick $4,775,000 over six loans.38 That

month, Kulick approached YSA requesting a $1,500,000 loan, nearly twice the

amount of any previous Loan. 39 Diveroli wanted to loan the money to Kulick.

Diveroli considered Kulick “a fantastic salesman” and “very persist[ent],” noting that

Kulick “presents as trustworthy.”40

32 Id. at 2; JX-3 at 22–23 (“If money doesn’t come in as expected would you be open to

a week extension for an additional 25k of interest paid today.”).
33 JX-10 at 2.

34 JX-3 at 22–24.

35 JX-3 at 23.

36 Id. at 22–24.

37 JX-58; JX-22.

38 JX-10 at 1 (October 8 Loan for $775,000); JX-60 at 2 (loaning Plaintiffs $750,000

on January 21, 2025); JX-63 at 2 (loaning Plaintiffs $750,000 on January 24, 2025);
JX-65 at 2 (loaning Plaintiffs $800,000 on January 30, 2025); JX-67 at 2 (loaning
Plaintiffs $850,000 on February 4, 2025); JX-71 at 2 (loaning Plaintiffs $850,000 on
February 10, 2025).
39 Trial Tr. at 149:3–22 (Diveroli); Rogers Decl. ¶ 4; compare JX-16 at 1 with JX-71 at

2.
40 Trial Tr. at 151:19–152:5 (Diveroli).

7
But given that Kulick repaid the October 8 Loan late, and the amount

requested, YSA “made it crystal clear” it would need “significantly more collateral”

before agreeing to Kulick’s request.41 Diveroli directed his office to “cease almost all

other activities” to review Kulick’s portfolio of assets prior to extending additional

capital.42 And YSA searched for a consultant “familiar with multi-family residential

real estate” who could assist in “making sure [YSA] [is] as protected by the collateral”

as it was made to believe.43

On February 13, YSA requested that Kulick provide preliminary diligence

materials.44 Kulick resisted YSA’s requests initially,45 expressing his desire to end

the parties’ relationship, and even requested that YSA “release all liens . . . from the

[October 8 Loan].”46

Kulick then changed his tune. The next morning, Kulick offered to move

forward if YSA would accept a subset of the requested materials.47 YSA agreed based

on Kulick’s offer to provide: “[a]ll tax returns”; “[a]ll mortgage statements”; “a

41 Id. at 149:23–152:5 (Diveroli).

42 Id. at 149:23–151:10 (Diveroli); JX-73; see JX-222.

43 JX-222; see JX-73.

44 JX-76 at 2 (Defendant requested the following materials: (i) bank statements for

the preceding six months for all entities; (ii) financial statements from the last three
years; (iii) tax returns from the last three years; (iv) internal analytics for the
properties Kulick developed; (v) “all Loan Documents related to loans currently
encumbering one or multiple properties that will be securing the loan”; and (vi) “[a]ny
and all active UCC filings related to any of the entities/properties.”).
45 JX-73.

46 JX-76 at 1.

47 Id.

8
portfolio p&l” statement; and “[c]onstant live access to data curated between

[Kulick’s] team and [YSA].”48

YSA’s counsel reviewed the materials. Because the materials did not clearly

identify the entity associated with each property, YSA’s counsel requested additional

information.49 YSA also asked whether any encumbrances on the properties would

be senior to the contemplated loan. 50 Kulick provided additional documentation,

including a broker’s valuation opinion for one property and operating agreements for

five of the entities.51

The following morning, Kulick texted Diveroli and Robert Miley, YSA’s

counsel, to check on the status of the Loan.52 Miley responded by sharing an image

of the CPSA provision that defined “Unencumbered Interests” and “Encumbered

Interests.” 53 Miley asked Kulick: “Where this had previously included 17 total

entities (4 unencumbered), are we expanding to rest of portfolio? If so, could you

please send me a paragraph that I can copy into it with the other entities?”54

Kulick immediately responded stating: “The answer is yes and no. I suggest

we keep that the same but maybe add a joinder to the portfolio as a whole[.]”55

48 Id.

49 JX-77 at 2–3.

50 Id.

51 JX-77 at 1.

52 JX-12.

53 Id. at 2.

54 Id.

55 Id.

9
Miley then asked the group for “consensus on the entity language for the

collateral agreement.”56 He noted that, given certain covenants in the CPSA, it was

critical to keep the unencumbered and encumbered interests separate. 57 Kulick

responded stating: “Yes the collateral needs to remain the same but does my idea for

a joinder with any asset controlled by any affiliate of mine work?”58

Miley said that the joinder “may” work.59 Miley then emailed Kulick updated

drafts of the Confession of Judgment and Guaranty.60 In the same email, Miley again

flagged for the group Kulick’s suggestion of adding a joinder to the CPSA. He noted

that the CPSA does not clearly state which entities are intended to be “unencumbered

vs encumbered.”61 Kulick responded: “No change to this document at all except to

add a joinder that joins any asset controlled by any affiliate of mine.”62 YSA’s counsel

circulated a revised CPSA that included a one-paragraph joinder consistent with

Kulick’s proposal (the “February Joinder”).63

On February 18, 2025, the parties entered the new loan agreement (the

“February 2025 Loan”).64 The February 2025 Loan comprises: a promissory note (the

56 Id. at 3.

57 Id.

58 Id.

59 Id.

60 JX-13 at 1.

61 Id.

62 Id. (emphasis added).

63 JX-15 at 1, 18, 32.

64 PTO ¶ 7; see generally JX-16.

10
“February Note”); a collateral pledge and security agreement (the “February CPSA”),

a Personal Guaranty and Right of First Offer (the “February Guaranty”); and a

Joinder.65 The February 2025 Loan is governed by Delaware law.66

Section 5(c) of the February Guaranty requires Kulick, as Guarantor, to

“deliver to Lender a true, correct, and complete schedule of real estate and entities

owned (whether directly or indirectly, and whether wholly or partly) by Guarantor. .

. .”67 Kulick delivered the required schedule of real estate owned, which identified

the Title Owners.68 Again, requiring a schedule of real estate owned by Kulick, the

Guarantor, reinforces the terms and purpose of the February Joinder.

The February Guaranty, like the February CPSA, granted YSA a broad power

of attorney (the “February Guaranty POA”).69 The February POA, in relevant part,

provided: “Lender may take whatever steps that it deems necessary in its sole

discretion to secure and protect its interests, including but not limited to filing any

action and doing whatever else is necessary to protect its interests. . . .”70

65 JX-16

66 Id. at 6–7.

67 Id. at 26.

68 JX-27 at 39–40; JX-169 §§ 1–3, Ex. A (providing Louis Investments, LLC an entity

solely owned and managed by Kulick “directly or indirectly, owns or controls” the
entities listed on Exhibit A, which includes the Title Owners).
69 JX-16 at 28.

70 Id.

11
D. Plaintiffs Default On Four Loans.

Plaintiffs ultimately defaulted on four loans (the “Defaulted Loans”): (1) the

February 2025 Loan; (2) the “April 2025 Loan”; (3) the “July 16, 2025 Loan”; and (4)

the “July 31, 2025 Loan.”71 Each Defaulted Loan followed the format of the February

2025 Loan,72 in that each involved a Note, a CPSA, a Guaranty, and a Joinder.73

The principal amount of the February 2025 Loan is $1,500,000. Plaintiffs

defaulted on May 19, 2025.74 The interest rate is 133.333% per annum, compounded

monthly. 75 Plaintiffs owe approximately $3.3 million under the February 2025

Loan.76

The principal amount of the April 2025 Loan is $300,000.77 The purpose of the

April 2025 Loan was to finance Kulick’s closing costs related to the acquisition of Parc

71 JX-16; JX-17; JX-20; JX-21; see JX-28.

72 Trial Tr. at 14:2–8, 51:6–54:12 (Kulick).

73 See generally JX-16; JX-17; JX-20; JX-21.The identity of the Borrower Entity
providing the “Encumbered Interests” and the Pledgor Entity providing the
“Unencumbered Interests” differ. JX-16 at 9 (identifying Vesta as Pledgor and Asset
Holder as Borrower); JX-17 at 11 (identifying Kulick Manager, LLC as Pledgor and
Parc 1010 HoldCo., LLC, Parc 1010 GP, LLC, and Parc 1010 Investors, LLC as
Borrowers); JX-20 at 9 (identifying Vesta as Pledgor and Borrower); JX-21 at 9
(identifying Vesta as Pledgor and Borrower). The April 2025 Loan included one
bespoke feature, a membership interest pledge and assignment agreement
(“MIPAA”). JX-17 at 34–42. The April 2025 Loan stands apart from the other
Defaulted Loans in that regard. The MIPAA is not relevant to the resolution of this
action.
74 JX-94; JX-201; JX-28 at 2–4; see JX-104.

75 JX-16 at 1.

76 JX-28 at 2–4.

77 PTO ¶ 17. The loan went to three entities owned by Kulick Manager, LLC—Parc

1010 HoldCo., LLC, Parc 1010 GP, LLC, and Parc 1010 Investors, LLC. PTO ¶ 17.

12
1010, an apartment complex in Tulsa, Oklahoma.78 It was a short-term loan, due to

be repaid ten days after closing.79 But the transaction never closed.80 The interest

rate of the April 2025 Loan was 1,500% per annum, compounded monthly. 81

Plaintiffs owe approximately $3 million on the loan.82

Kulick manages each of the entities. JX-17 at 8–9. Under the April 2025 Loan, Parc
1010 HoldCo., LLC, Parc 1010 GP, LLC, and Parc 1010 Investors, LLC are each a
“Borrower” and the “Pledgor” is Kulick Manager, LLC. Id. at 1.
78 PTO ¶ 17.

79 Id. at 1–2.

80 Trial Tr. at 117:20–118:1 (Kulick).
81 JX-17 at 1. Kulick proposed repaying YSA $425,000, inclusive of principal and
interest, in exchange for April 2025 Loan with a face value of $300,000. JX-3 at 53.
82 Diveroli consistently messaged Kulick seeking payment once Kulick defaulted on

the April 2025 Loan. JX-3 at 56–82; see JX-99 at 1. On June 16, Diveroli contacted
Kulick to work out a plan for the two defaulted Loans, Kulick responded asking for a
new loan and stating that: “you already have way more secure loan docs than
anything else I’ve ever used.” JX-3 at 83; see JX-104 at 1. On June 15, Kulick
requested a new loan of $315,000 from Diveroli (the “June 2025 Loan”). JX-104.
Kulick proposed satisfying the June 2025 Loan by repaying Diveroli $515,000 by July
1. Id. Kulick acknowledged he was in default under the April 2025 Loan and that
failure to satisfy that Loan “would be a default on this loan.” Id. Kulick also proposed
including a $1,000,000 penalty if the June 2025 Loan negatively impact either the
February 2025 Loan or the April 2025 Loan. Id. On June 19, Kulick and YSA closed
on the June 2025 Loan. JX-108; JX-109; JX-110; JX-111. The June 2025 Loan
included a Note, an Affidavit of Confession of Judgment, a CPSA, and a Guaranty.
JX-108; JX-109; JX-110; JX-111. The June 2025 Loan reflected the terms proposed
by Kulick. Compare JX-104 with JX-108. The principal amount of the June 2025
Loan was $315,000 and Kulick was obligated to repay $515,000 by July 1. JX-108 at
1–2. The interest rate of the June 2025 Loan is for 1565% per annum, compounded
daily. JX-108 at 1. Also on June 19, Kulick executed a Confidential Side Letter
Related to the February 2025 Loan, April 2025 Loan, and June 2025 Loan granting
YSA the right to seek repayment from reserves held by entities identified on Schedule
3. JX-112; Trial Tr. at 114:4–116:22 (Kulick). The properties on Schedule 3 appear
to overlap significantly with properties owned by the Title Owners. Compare JX-112
at Schedule 3 with PTO ¶ 6. Exhibit C to the Confidential Side Letter does not
provide the full names of the listed entities and, since the names of the Title Owner

13
The principal amount of the July 15, 2025 Loan is $365,000. 83 Plaintiffs

defaulted on July 30, 2025.84 The interest rate is 960% per year, compounded daily.85

Plaintiffs owe approximately $5 million on the loan.86

The principal amount of the July 31, 2025 Loan is $317,000. Plaintiffs

defaulted on August 5, 2025.87 The interest rate is 7,000% per year, compounded

daily.88 Plaintiffs owe a staggering $921 million on the loan.89

Kulick testified that he proposed the interest rates on each loan by reverse

engineering whatever payment he thought appropriate on the loan amount.90 He

calculated that payment amount assuming timely payment.91 But he knew that YSA

implied the interest rate that appeared in the Loan Documents from those amounts.92

When asked at trial about the interest rates of the Defaulted Loans, Kulick

testified that “I’m not playing the victim on paying high interest rates on my loans. I

and Intermediate Holding Companies share some names, it is difficult to discern the
exact identity of each entity provided on Exhibit C. Also around this time, Diveroli
offered Kulick a $5 to $10 million payoff option, which Kulick declined. Trial Tr. at
188:17–189:13 (Diveroli).
83 JX-20 at 1

84Id.

85Id.

86 JX-28 at 2.

87 Id.

88 Id.

89 Id. at 3.

90 Trial Tr. at 91:9–19 (Kulick).

91 Id. at 29:9–18 (Kulick).

92 Id. at 91:9–93:3 (Kulick).

14
understand that, you know, my cash position was bad, it was stressed. I was having

trouble getting investors to fund pro rata capital calls.”93 He also acknowledged that

he kept returning to YSA because he was “desperate” for funding.94

E. Defendant Records Second Mortgages.

By August 2025, Plaintiffs had defaulted on four loans and owed

approximately $900 million under the Defaulted Loans.95 (By trial, Plaintiffs owed

$932,149,606.85 under the Defaulted Loans.)96

In October 2025, Diveroli and two YSA representatives visited Kulick in Tulsa,

Oklahoma, to diligence the Properties in connection with a contemplated loan where

YSA would provide Plaintiffs tranche financing.97 Diveroli asked to see “the worst

units at the worst properties” to evaluate whether it made sense to move forward

93 Id. at 94:20–24 (Kulick).

94 Id. at 29:11–17, 84:16–18, 122:24–123:1 (Kulick).

95 JX-28 at 4; see JX-24 (informing Kulick he owed $897,744,576 under the Defaulted
Loans on December 2, 2025). Kulick complained throughout this litigation about
Defendant’s delays in providing a payoff summary. He testified that he made
multiple requests for a payoff summary as early as November 2025. Dkt. 22 ¶ 28
(“On December 2, 2025, Defendant informed Plaintiffs that it would “limit” the
amount owed to approximately $900 million dollars. . . .”). At trial Kulick testified
he did not receive a payoff from YSA until February 6, 2026. Trial Tr. at 45:15–46:5
(Kulick); Dkt. 103 at 11. But in the Amended Complaint Plaintiffs plead having
received a payoff summary on December 2, 2025, which is supported by
contemporaneous evidence. JX-24.
96 JX-28 at 2.

97 Trial Tr. at 29:22–35:7 (Kulick).

15
with the requested tranche financing.98 After the tour, they asked Kulick to join for

a meeting at their hotel conference room.99

During the meeting, Diveroli informed Kulick that he owed them “well over a

billion dollars” due to the compounding interest rates.100 Diveroli told Kulick that he

could “either do this the easy way or the hard way[.]”101 As Kulick recalled, “[t]hey

told me that basically they now own my entire portfolio[.]”102 Kulick understood the

“easy way” would entail handing over to YSA the deeds to the Properties in lieu of

YSA seeking to foreclose on the Properties.103 Kulick claims YSA offered cash if he

were to hand over the deeds. 104 Kulick understood the “hard way” as involving

litigation, as YSA had brought a draft complaint to the meeting. 105 YSA also

threatened to alert persons in Kulick’s professional network, including his Rabi and

wife.106

98 Id. at 32:2–24 (Kulick).

99 Id. at 33:1–20 (Kulick).

100 Id. at 33:1–19 (Kulick).

101 Id. at 33:13–33:19 (Kulick) (emphasis added).

102 Id. (Kulick) (emphasis added).

103 Id. at 34:6–35:6 (Kulick).

104 Id. (Kulick).

105 Id. at 34:6–37:14 (Kulick).

106 Id. at 34:19–35:6 (Kulick); see JX-23 (providing Plaintiffs and Plaintiffs’ counsel

the Complaint YSA filed in Superior Court noting “YSA also intends to submit
litigation preservation letters to various third parties, including but not limited to
Vesta employees, investors, and lenders that are believed to have either benefited
from or borne witness to Defendants’ misconduct”). In addition to attaching the
Superior Court Complaint, YSA shared with Plaintiffs and Plaintiffs’ counsel drafts
of an amended complaint and motion for a temporary restraining order and noted

16
Diveroli pursued the hard way.107 On October 31, 2025, YSA recorded second

mortgages against at least 25 Properties located in Oklahoma and Kansas.108 The

Properties are owned by the Title Owners. 109 Kulick identified the Properties in

compliance with Section 5(c)’s requirement under the February Guaranty to provide

YSA the “complete schedule of real estate and entities owned (whether directly or

indirectly, and whether wholly or partly)” by Kulick, in connection with the February

“YSA is willing to forego further litigation, including the filing of the amended
complaint, in exchange for Mr. Kulick executing deeds-in-lieu of foreclosure
voluntarily turning over ownership of each of the subject properties. . . .” Id.
107 Diveroli testified that it was only because YSA “discovered the fraud and deceit”

coupled with the poor conditions of the Properties that YSA decided to record the
second mortgages. Trial Tr. at 188:21–189:13 (Diveroli). Kulick acknowledged at
trial that he repeatedly recorded second mortgages on properties owned by Title
Owners. Id. at 110:24–113:7 (Kulick). Kulick admitted that two weeks before
commencing this action he granted a second mortgage on another property owned by
a Title Owner. Id. at 112:1–20 (Kulick); JX-170 (granting second mortgage on Jenk’s
Best Living on October 30, 2025); JX-168 (granting second mortgage on Eaton Place
Best Living, LLC on October 24, 2025); JX-155 (granting second mortgage on
Bartlesville Best Living, LLC on September 24, 2025). Kulick explained that 32 of
Vesta’s 34 properties routinely need cash, and his solution was to have Vesta make a
loan to the cash-strapped property, to allow the property to get their reserve funded,
and then subsequently pay back to the loan to Vesta. Trial Tr. at 115:7–116:18
(Kulick). Kulick acknowledged comingling his personal funds with Vesta’s to create
a “lending pool” to move cash around to pay the debts of one property with proceeds
from another. Trial Tr. at 128:15–18, 129:9–13, 131:6–22 (Kulick). YSA’s forensic
accountant confirmed as much, based on his limited review of Kulick’s bank accounts.
JX-198; JX-194 (“In summary, from November 2024-July 2025 $33.2 million was
deposited from the associated real estate portfolio of Vesta and from the net
operational flows of the Vesta accounts, and these $33.2 million were comingled and
sent to unidentified entities controlled by the controller.”).
108 Dkt. 81 ¶ 21; JX-27; PTO ¶ 6.

109 JX-27 at 1, 41, 81, 121, 136, 175, 192, 207, 229, 249, 264, 304, 343, 383, 398, 413,

453, 468, 508, 550, 567, 584, 599, 639, 680, 721, 763, 803; see JX-221; JX-215; JX-11;
JX-169 §§ 1–3, Ex. A.

17
2025 Loan. 110 Kulick testified that he personally owns interests in each Title

Owner.111

F. Plaintiffs File This Litigation.

Plaintiffs were first to file litigation. On November 13, 2025, Plaintiffs filed

their Complaint against YSA, seeking an order from this Court requiring Defendant

to remove the second mortgages.112 At the same time, Plaintiffs moved for expedition

and separately moved for expedited preliminary and permanent injunctive relief.113

On November 25, 2025, the court heard argument on Plaintiffs’ motions to

expedite and for injunctive relief. 114 In seeking preliminary injunctive relief,

Plaintiffs claimed “many of these properties are under contract or actively being

marketed for sale” including one property set to close the next day. 115 At the

110 JX-16 at 26 (“By February 28, 2025, Guarantor shall deliver to Lender a true,

correct, and complete schedule of real estate and entities owned (whether directly or
indirectly, and whether wholly or partly) by Guarantor; provided, however, that in
the event that the schedule of real estate as of February 28, 2025 is identical to the
schedule of real estate most recently provided by Guarantor to Lender, then
Guarantor may instead email Lender confirmation that the schedule of provided as
of [Date] remains true, correct and complete as of February 14, 2025, in lieu of
resubmitting the schedule of real estate. The same schedule shall provide the
percentage of ownership attributable to Guarantor with respect to such real estate
and entities and, with respect to real estate, identify which entity the real estate is
owned through. Upon delivering same to Lender, Guarantor shall be deemed to have
represented and warranted that such schedule is true, correct, and complete as of the
date thereof.”); JX-27 at 39–40.
111 Trial Tr. at 8:2–9:11 (Kulick).

112 Dkt. 1 ¶¶ 37–44.

113 Dkt. 1 at Plaintiffs’ Motion to Expedite; Dkt. 1 at Plaintiffs’ Motion for Expedited

Preliminary and Permanent Injunction.
114 Dkt. 14.

115 11/25/25 Hr’g Tr. at 4:6–5:10.

18
preliminary stage, Plaintiffs also claimed Kulick lacked authority to record second

mortgages directly on the Title Owners’ properties.116

The court denied Plaintiffs’ request for preliminary injunctive relief because

the relief requested—ordering Defendant to lift the second mortgages—was

mandatory in nature and thus foreclosed, absent discovery to resolve factual

disputes.117 But the court granted expedition. The court directed the parties to “take

some targeted discovery” to allow the court to determine “whether the defendant has

the authority to impose these mortgages on a full discovery record that reflects the

parties’ intent.” 118 The court did enjoin YSA from imposing additional second

mortgages.119

On December 5, Plaintiffs filed their Amended Complaint.120 The Amended

Complaint asserts one claim.121 Plaintiffs claim that Defendant unlawfully recorded

the second mortgages and seek a declaratory judgment that the second mortgages are

void, coupled with an order from this court directing Defendant to immediately

execute and record withdrawals, cancellations, or releases of the second mortgages.122

116 Id. at 15:24–17:5.

117 Id. at 42:17–43:8.

118 Id. at 44:1–8.

119 Id. at 43:9–24.

120 Dkt. 22.

121Id. ¶¶ 39–48 (alleging the second mortgages “are invalid” and seeking a
“permanent injunction directing Defendant to immediately execute and record
withdrawals, cancellations, or releases of the invalid second mortgage[s].”).
122 Id. ¶¶ 42–48.

19
Plaintiffs again moved for Expedited Preliminary and Permanent Injunctive relief

(the “Motion”).123 Defendant opposed the Motion.124

After the court preliminarily enjoined additional second mortgages,

Defendants moved to set an injunction bond under Court of Chancery Rule 65 (the

“Bond Motion”).125 On December 30, the court granted the Bond Motion, requiring

Plaintiffs to post a bond in the amount of $22,368,257.93.126 On January 7, 2026,

Defendant informed the court that Plaintiffs were unable to post the bond. 127

Plaintiffs’ failure to post bond caused the ordered injunction to dissolve by operation

of law.128

On February 11, Defendant filed an Amended Answer and brought

counterclaims and third-party claims.129 Defendant asserted counterclaims against

Kulick and Vesta and brought third-party claims against 46 named third-party

defendants and Does 1-100 and Roe Entities 1-100. 130 On March 6, Plaintiffs

123 Dkt. 23.

124 Dkt. 32.

125 Dkt. 29; Ct. Ch. R. 65(c).

126 Dkt. 60 (“In connection with this Court’s entry of a temporary restraining order []

in connection with the above-captioned action, within five (5) calendar days of the
entry of this Order, Plaintiffs shall post with this Court a secured bond. . . .”).
127 Dkt. 64.

128 Ct. Ch. R. 65(c).

129 Dkt. 81.

130 Id. ¶¶ 4–49.

20
answered the Counterclaims.131 In May, Defendant began to effectuate service on the

counterclaim/third-party defendants.132

The court held trial on March 5, 2026. 133 The parties completed post-trial

briefing on March 26, 2026.134

II. LEGAL ANALYSIS

Plaintiffs seek permanent injunctive relief, asking the court to order Defendant

to immediately execute and record withdrawals, cancellations, or releases of the

second mortgages.135 To obtain a permanent injunction, “a party must show (i) actual

success on the merits, (ii) the inadequacy of remedies at law, and (iii) a balancing of

the equities that favors an injunction.” 136 A party need not show imminent

irreparable harm to obtain a permanent injunction. 137 There are other ways to

demonstrate no adequate remedy at law.138

Permanent injunctive relief comes in one of two forms: prohibitive or

mandatory. “A permanent injunction is a form of final relief that prohibits a party

131 Dkt. 93.

132 Dkt. 107; Dkt. 108; Dkt. 109; Dkt. 110; Dkt. 111; Dkt. 112; Dkt. 113.

133 Dkt. 92.

134 Dkt. 103.

135 Dkt. 22 ¶ 48.

136 In re COVID-Related Restrictions on Religious Svcs., 285 A.3d 1205, 1232–33 (Del.

Ch. 2022), aff’d, 326 A.3d 626 (Del. 2024).
137 Id. at 1228–31; 11A Charles A. Wright & Arthur R. Miller, Federal Practice &

Procedure § 2944 (3d ed.) (“[I]rreparable injury is not an independent requirement
for obtaining a permanent injunction; it is only one basis for showing the inadequacy
of the legal remedy.”).
138 Id. at 1230.

21
from taking action or compels a party to take action.”139 Its negative version serves

as a prohibitive injunction, “whereby defendant is perpetually inhibited from the

assertion of an assumed right, or perpetually restrained from the commission of an

act which would be contrary to equity and good conscience.” 140 Its affirmative or

mandatory version compels a party to take specific action.141

An order directing YSA to undertake specific affirmative actions to remove the

second mortgages is mandatory in nature.142 Kulick bears the burden of proving that

the second mortgages are “invalid” as a matter of law and that he has “clearly

established” the legal right to have the court order YSA to cancel the second

mortgages. 143 To show success on the merits, therefore, Plaintiffs must “clearly

establish” the legal right they seek to enforce.144 “The showing on the merits required

139 Glob. Cap. P’rs LLC v. Green Sapphire Hldgs., Inc., 2026 WL 709819, at *45 (Del.

Ch. Mar. 13, 2026), judgment entered, (Del. Ch. 2026).
140 Id. (quoting James L. High, A Treatise on the Law of Injunctions as Administered

in the Courts of the United States and England § 3, at 4 (1879)); see In re COVID, 285
A.3d at 1228; NEC Fund VI HE Lender, LLC v. Hecate Hldgs. LLC, 2026 WL 527007,
at *7 (Del. Ch. Feb. 25, 2026).
141 In re COVID, 285 A.3d at 1226 n.4; 43A C.J.S. Injunctions § 19 (“A mandatory

injunction is an equitable remedy that commands the subject of the order to perform
an affirmative act to undo a wrongful act or injury.”); Hughes Tool Co. v. Fawcett
Publications, Inc., 315 A.2d 577, 579 (Del. 1974); see also Donald J. Wolfe, Jr. &
Michael A. Pittenger, Corporate and Commercial Practice in the Delaware Court of
Chancery § 16.02[c] (2025) (“[A] mandatory injunction requires an individual to
perform a specific act.”).
142 Dkt. 22 ¶ 48.

143 DeMarco v. Christiana Care Health Servs., Inc., 263 A.3d 423, 434 (Del. Ch. 2021).

144 DeMarco, 263 A.3d at 434; Kingsbridge Cap. Gp. v. Dunkin’ Donuts Inc., 1989 WL

89449, at *3 (Del. Ch. Aug. 7, 1989); see Pomilio v. Caserta, 215 A.2d 924, 925 (Del.
1965) (“There is no right to an injunction as a matter of course; and this is especially

22
by the ‘clearly established’ standard is ‘more than a reasonable probability of

success.’”145 Satisfying the ‘clearly established’ standard requires “a showing that the

petitioner is entitled as a matter of law to the relief” sought.146

Plaintiffs’ claim flounders on the first element—Plaintiffs have not clearly

established the right at issue. Plaintiffs’ primary argument is that neither the

CPSAs, nor the Joinders, nor the POAs, define Collateral to include properties held

by the Title Owners. In the alternative, Plaintiffs argue that the CPSAs are usurious

and cannot be enforced even if the CPSAs support Defendant’s right to record the

second mortgages.147

A. Contractual Entitlement

Plaintiffs argue that Defendant must remove the second mortgages because

the definition of “Collateral” in the Loan Documents did not create a security interest

so as to the mandatory writ which is issuable only in the exercise of extraordinary
judicial caution.”).
145 DeMarco, 263 A.3d at 423 (quoting Donald J. Wolfe, Jr. & Michael A.
Pittenger, Corporate and Commercial Practice in the Delaware Court of Chancery §
14.03[b][6], at 14-03.44 (2021)); Stahl v. Apple Bancorp, Inc., 579 A.2d 1115, 1120
(Del. Ch. 1990) (“Upon an application for mandatory preliminary relief, however,
plaintiff must show more than a reasonable probability of success on the merits; he
must clearly establish the legal right he seeks to protect or the duty he seeks to
enforce.”).
146 Alpha Nat. Res., Inc. v. Cliff’s Nat. Res., Inc., 2008 WL 4951060, at *2 (Del. Ch.

Nov. 6, 2008); Bertucci’s Rest. Corp. v. New Castle Cnty., 836 A.2d 515, 519 (Del. Ch.
2003) (“[T]he Court of Chancery has consistently applied an exacting standard,
requiring that an applicant seeking mandatory preliminary injunctive relief
clearly establish the legal right he seeks to protect or the duty he seeks to enforce.”
(internal quotation omitted)).
147 Dkt. 95 at 33.

23
in the Properties.148 Defendant disputes Plaintiffs’ interpretation of Collateral but

says that it does not matter, because Defendant had the right to record the second

mortgages even assuming Plaintiffs’ interpretation. 149 This decision rules in

Defendant’s favor, concluding that Defendant had the right to record the mortgages

even under Plaintiffs’ interpretation.

The court’s task is to interpret the Loan Documents in a way that carries out

the parties’ intent.150 Absent ambiguity, the court “will give priority to the parties’

intentions as reflected in the four corners of the agreement, construing the agreement

as a whole and giving effect to all its provisions.”151 The contract terms will be given

their “plain, ordinary meaning.”152 “[T]he meaning which arises from a particular

portion of an agreement cannot control the meaning of the entire agreement where

such inference runs counter to the agreement’s overall scheme or plan.”153 The court

must “reconcile all the provisions of the instrument” if possible. 154 When a

148 Id. at 19–21.

149 Dkt. 100 at 23–24; Dkt. 106 at 45.

150 Lorillard Tobacco Co. v. Am. Legacy Found., 903 A.2d 728, 739 (Del. 2006).

151 In
re Viking Pump, Inc., 148 A.3d 633, 648 (Del. 2016) (quoting Salamone v.
Gorman, 106 A.3d 354, 368 (Del. 2014)).
152 Alta Berkeley VI C.V. v. Omneon, Inc., 41 A.3d 381, 385 (Del. 2012) (citing City

Investing Co. Liquid. Tr. v. Cont’l Cas. Co., 624 A.2d 1191, 1198 (Del. 1993)).
153 E.I. du Pont de Nemours & Co. v. Shell Oil Co., 498 A.2d 1108, 1113 (Del. 1985);

accord HUMC Holdco, LLC v. MPT of Hoboken TRS, LLC, 2020 WL 3620220, at *6
& n.40 (Del. Ch. July 2, 2020); Great Hill Equity P’rs IV, LP v. SIG Growth Equity
Fund I, LLLP, 2018 WL 6311829, at *50 & n.648 (Del. Ch. Dec. 3, 2018).
154 Elliott Assocs., L.P. v. Avatex Corp., 715 A.2d 843, 854 (Del. 1998).

24
transaction consists of multiple documents, Delaware courts will interpret the

documents as one singular contract.155

Where language is unambiguous, courts “will give effect to the plain meaning

of the contract’s terms and provisions.”156 “Language is ambiguous if it is susceptible

to more than one reasonable interpretation.”157 “An interpretation is unreasonable if

it ‘produces an absurd result’ or a result ‘that no reasonable person would have

accepted when entering the contract.’”158 “The parties’ steadfast disagreement over

interpretation will not, alone, render the contract ambiguous.”159 “Ambiguity does

not exist where the court can determine the meaning of a contract ‘without any other

guide than a knowledge of the simple facts on which, from the nature of language in

general, its meaning depends.’”160 If ambiguity exists, then the court “may consider

extrinsic evidence to resolve the ambiguity.”161

155 See, e.g., E.I. du Pont de Nemours & Co., 498 A.2d at 1115 (“The specific provisions

of these Agreements and the interrelationship thereof make it clear that the parties
intended these two Agreements to operate as two halves of the same business
transaction . . . Where two agreements are executed on the same day and are
coordinated to the degree outlined above, in essence, they form one contract and must
be examined as such.” (internal citations omitted)); Karish v. SI Int’l, Inc., 2002 WL
1402303, at *3 (Del. Ch. June 24, 2002).
156 Manti Hldgs., LLC v. Authentix Acq. Co., Inc., 261 A.3d 1199, 1208 (Del. 2021)

(quoting Osborn ex rel. Osborn v. Kemp, 991 A.2d 1153, 1159–60 (Del. 2010)).
157 Id. (citing Osborn, 991 A.2d at 1160).

158 Id. (quoting Osborn, 991 A.2d at 1160).

159 Id. (quoting Osborn, 991 A.2d at 1160).

160 Rhone-Poulenc Basic Chems. Co. v. Am. Motorists Ins. Co., 616 A.2d 1192, 1196

(Del. 1992) (quoting Holland v. Hannan, 456 A.2d 807, 815 (D.C. App. 1983)).
161 Salamone, 106 A.3d at 374 (citation omitted).

25
Plaintiffs rest their contract claim on the definition of “Collateral” in the

CPSAs. Under the CPSAs, Borrower162 and Pledgor163 agreed to “pledge, grant, and

assign to Lender a security interest in and lien upon the Collateral . . . to secure the

payment and the performance of the Obligations . . . .” 164 The CPSA defines

“Collateral” to include “the Interest and any and all other interests in any Entity that

are now owned or hereafter acquired by Borrower or Pledgor, as applicable in or to

any Entity, together with (i) all additional membership interests or other equity

interests in any Entity now or hereafter acquired by Borrower or Pledgor, as

applicable, . . .”165 The CPSAs define “Interests” with reference to two other defined

terms—“Unencumbered Interests” and “Encumbered Interests.”166 Those terms are

defined as Borrower’s and Pledgor’s “membership interest[s]” in the Intermediate

Holding Companies listed in the recitals of the CPSAs.167 In Plaintiffs’ view, the

162 Asset Holder, Vesta, and Parc 1010 HoldCo., LLC are each a “Borrower” under one

of the Defaulted Loans. JX-16 at 1; JX-17 at 1; JX-20 at 1; JX-21 at 1.
163 Vesta and Kulick Manager, LLC are each a “Pledgor” under one or more of the

Defaulted Loans. JX-16 at 1; JX-17 at 1; JX-20 at 1; JX-21 at 1.
164 JX-16 at 10; JX-17 at 11–12; JX-20 at 10; JX-21 at 10.

165 JX-16 at 10; JX-17 at 11–12; JX-20 at 10; JX-21 at 10.

166 JX-16 at 9; JX-17 at 11; JX-20 at 9; JX-21 at 9.

167 See,e.g., JX-16 at 9 (defining the Unencumbered Interests as the Borrower’s
membership interest in the following Intermediate Holding Companies: Capitol on
28th Investors, LLC; Remington Ranch Investors, LLC; Copperfield Investors, LLC;
Putnam Investors, LLC); id. (defining the Encumbered Interests as Pledgor’s
membership interest in the following Intermediate Holding Companies: Woodscape
Investors, LLC; Barcelona Best Living, LLC; Riverpark Best Living Investors, LLC;
Montgomery Vesta Investors, LLC; Fairfax Holding Company, LLC; OKC3 Investors,
LLC; Eton Investor, LLC; Eaton Place Investor, LLC; W.O. Holding Co., LLC;
Regency Holdings, LLC; Woodland Manor Holdings, LLC; 727-Classes Best Living

26
definition of “Collateral” does not extend to the assets held by these entities, which

include the Properties.168 Rather, the CPSAs gave Defendant a security interest in

Plaintiffs’ membership interests in the entities, full stop.

Plaintiffs’ argument is a red herring. Defendant concedes that the Loan

Documents did not create a secured interest in the Properties. 169 Rather, they

created a secured interest in the entities that own the Properties. The Loan

Documents also gave Defendant the right to take action against real property owned

by those entities, including the Properties.

Defendant’s interpretation begins with the Joinder. The Joinder states that:

[Marc Kulick], as a manager, member or other authorized
person of any and all Guarantor Entities and any other
entities in which the undersigned does now own or control
or may herein after own or control during the term of that
certain [February CPSA, April CPSA, and July CPSAs]
hereby agrees to jointly and severally assume all
obligations of Pledgor under the [February CPSA, April
CPSA, and July CPSAs] for all purposes thereof on the
terms set forth therein and to be bound by the terms of the
[February CPSA, April CPSA, and July CPSAs] as fully as
if [Marc Kulick] had personally and individually executed

Investors, LLC; Muntage Vesta Investors, LLC); JX-20 at 9 (identifying the
Unencumbered Interests as Borrower’s membership interest in the following
Intermediate Holding Companies: Capitol on 28th Investors, LLC; Remington Ranch
Investors, LLC; Copperfield Investors, LLC; Putnam Investors, LLC); JX-21 at 9
(identifying the Encumbered Interests as Pledgor’s membership interest in the
following Intermediate Holding Companies: Woodscape Investors, LLC; Barcelona
Best Living, LLC; Riverpark Best Living Investors, LLC; Montgomery Vesta
Investors, LLC; Fairfax Holding Company, LLC; OKC3 Investors, LLC; Eton
Investor, LLC; Eaton Place Investor, LLC; W.O. Holding Co., LLC; Regency Holdings,
LLC; Woodland Manor Holdings, LLC; 727-Classes Best Living Investors, LLC;
Muntage Vesta Investors, LLC); see PTO ¶ 10.
168 Dkt. 95 at 15–21.

169 See Dkt. 100 at 18–24.

27
and delivered the [February CPSA, April CPSA, and July
CPSAs] as of the date thereof.170

Kulick admitted at trial that he signed the Joinder and that he did so “as

manager, member or other authorized person of” two broad categories of entities,

including “any and all Guarantor Entities” and “any other entities in which [Kulick]

does now own or control or may here after own or control . . . .”171

Under the CPSA, “Guarantor Entities” includes the Title Owners. 172 The

CPSA defined “Guarantor Entities” as “any entity directly or indirectly controlled or

managed by [Kulick],” or “directly or indirectly owned by [Kulick] in whole or in part

with respect to which Guarantor receives notices in the ordinary course of

business[.]”173

This definition of Guarantor Entities sweeps in the Title Owners in multiple

ways. First, the definition includes entities that Kulick owns in part. At trial, Kulick

admitted that he had an investment in each of the Title Owners and Properties.174

170 Trial Tr. at 20:2–21:6, 61:12–65:15 (Kulick); JX-16 at 22; JX-17 at 25; JX-20 at 22;

JX-21 at 22. The Joinders are substantively identical. The only difference among the
Joinders is the identity of the Kulick-affiliated entities named as Pledgor under the
respective CPSA. See JX-16 at 1 (identifying Vesta as Pledgor); JX-17 at 1
(identifying Kulick Manager, LLC as Pledgor); JX-20 at 1 (identifying Vesta as
Pledgor); JX-21 at 1 (identifying Vesta as Pledgor).
171 Trial Tr. at 61:12–62:7 (Kulick).

172 JX-169 ¶¶ 1–3, Ex. A (providing Kulick is the “sole Member” and “100%” owner of

Louis Investments, LLC, and identifying the Title Owners as “directly or indirectly”
owned by Louis Investments, LLC).
173 JX-16 at 12; JX-20 at 12; JX-21 at 12.

174 Trial Tr. at 69:1–2 (Kulick) (“I have an investment in each property.”); JX-169 ¶¶

1–3, Ex. A.

28
And Kulick identified every one of the Title Owners in response to a provision in his

Guaranty requiring him to provide a “complete schedule of . . . entities owned

(whether directly or indirectly, and whether wholly or partly) by Guarantor.” 175

Thus, at a minimum, Kulick “indirectly own[s] . . . in part” each Title Owner. Second,

Kulick controls or manages the Title Owners, as he testified at trial. 176 That too

brings them within the scope of the Guarantor Entities.

Because each Title Owner is a Guarantor Entity, each Title Owner assumed

“all obligations of Pledgor under the [CPSA] for all purposes thereof on the terms set

forth therein and to be bound by the terms of the [CPSA]” by operation of the

Joinder.177 Thus, the Joinder renders each Title Owner an additional Pledgor under

the CPSA, subject to the Pledgor’s obligations under the CPSA.

Each Pledgor has obligations under the Power of Attorney provision of the

CPSA. The Power of Attorney states that:

Through exercise of this irrevocable power of attorney,
Lender may take whatever steps that it deems necessary
in its sole discretion to secure and protect its interests,
including but not limited to filing any action and doing
whatever else is necessary to protect its interests, enforce
its rights, and collect all amounts due to Lender. This shall
include but not be limited to taking any action against any
of the Collateral or any real or personal property owned by
the Collateral.178

175 JX-16 at 26; JX-27 at 39–40.

176 Trial Tr. at 63:24–67:21 (Kulick); see JX-168 at Ex. A.

177 JX-16 at 22; JX-20 at 22; JX-21 at 22.

178 JX-16 at 13; JX-20 at 13; JX-21 at 13.

29
The first sentence of this provision gives YSA the right to “take whatever steps

that it deems necessary in its sole discretion to secure and protect its interests.”179

This expressly includes “doing whatever else is necessary to protect its interests,

enforce its rights, and collect all amounts due to Lender.”180 This power is not tied to

or limited by the definition of Collateral. The second sentence does reference “taking

action against the Collateral” but as a non-exclusive right. It reads: “This shall

include but not be limited to taking any action against any of the Collateral. . . .”181

By defining “action against the Collateral” as a non-exclusive right encompassed by

the preceding sentence, the language and structure of the Power of Attorney indicate

that the parties intended for YSA’s rights to extend beyond the right to take “action

against the Collateral.”

Eliminating all doubt, the Power of Attorney provision uses the word

“secure.”182 It gives YSA the right to take “whatever steps that it deems necessary in

its sole discretion to secure and protect its interests[.],” including “whatever . . . is

necessary to . . . collect all amounts due” to YSA.183 The Power of Attorney thus

grants YSA the right, if YSA deems it necessary, to “secure” its interests against those

entities bound by the Joinder, including the Title Owners, to facilitate payment of

179 JX-16 at 13; JX-20 at 13; JX-21 at 13.

180 JX-16 at 13; JX-20 at 13; JX-21 at 13.

181 JX-16 at 13; JX-20 at 13; JX-21 at 13 (emphasis added).

182 JX-16 at 13; JX-20 at 13; JX-21 at 13.

183 JX-16 at 13; JX-20 at 13; JX-21 at 13. (emphasis added).

30
amounts due to YSA. YSA deemed the second mortgages necessary to protect its

rights to collect amounts due to it.184 Plaintiffs do not argue otherwise.

Plaintiffs instead argue that Defendant’s interpretation runs afoul of Article

Nine of the UCC.185 According to Plaintiffs, the CPSAs had to describe the Collateral

consistent with Article Nine of the UCC.186 Under Article Nine, and a recent case

interpreting it, that description must “reasonably identif[y] what is described.” 187

The Loan Documents provided the full name and state of incorporation of each

Intermediate Holding Companies entity comprising the Collateral.188 But it did not

list the details of the Properties. It does not so much as list: the Title Owners, the

Properties, or the Properties’ addresses.189 Plaintiffs say that neither the CPSAs nor

184 Trial Tr. at 190:15–191:13 (Diveroli); id. at 196:17–200:6 (Miley).

185 Dkt. 95 at 20–21; Dkt. 103 at 3–6.

186 Dkt. 103 at 3–6; see Haft v. Haft, 671 A.2d 413, 417 (Del. Ch. 1995) (“Article 9

generally governs the creation, perfection, and enforcement of security interests in
property and applies to ‘any transaction (regardless of its form) which is intended to
create a security interest in personal property.’” (quoting 6 Del. C. § 9-102(1)(a))).
187 6 Del. C. § 9-108(a) (“[A] description of personal or real property is sufficient,

whether or not it is specific, if it reasonably identifies what is described.”); Cannon v.
Romeo Sys., Inc., 2025 WL 2848069, at *22 (Del. Ch. Oct. 7, 2025) (“[T]he description
must objectively identify the collateral so that, at a minimum, it ‘puts subsequent
creditors on notice so that, aided by inquiry, they may reasonably identify the
collateral involved.’” (quoting Bishop v. All. Banking Co., 412 S.W.3d 217, 220 (Ct.
App. KY, 2013))); see 6 Del. C. § 9-108, cmt. 2. (“The test of sufficiency of a description
under this section . . . is that the description do the job assigned to it: make possible
the identification of the collateral described. This section rejects any requirement that
a description is insufficient unless it is exact and detailed (the so-called ‘serial
number’ test).”).
188 JX-16 at 9; JX-20 at 9; JX-21 at 9.

189 See generally JX-16; see also Trial Tr. at 205:24–206:6 (Miley).

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any of the Loan Documents reasonably identify the Properties consistent with Article

Nine.190 Plaintiffs, therefore, contend that Article Nine prevents a security interest

from attaching to the Properties because the Properties are not mentioned, let alone

described in the CPSAs.191

But again, Plaintiffs’ argument is of no moment. Defendant admits that the

Loan Documents standing alone did not create a secured interest in the Properties.

Defendant argues that they did not have to, because the Loan Documents gave

Defendant the right in its “sole discretion to secure and protect its interests” by

“taking any action against . . . . any real or personal property owned by the

Collateral,” including the Properties. And the Loan Documents reasonably describe

the Collateral by providing the full name and state of incorporation of each entity

comprising the Collateral.

Contrary to Plaintiffs’ contentions, the Loan Documents granted YSA

expansive rights to take actions against real property owned by Collateral. YSA

exercised that right by recording the second mortgages on real property owned by the

Collateral, in this case Properties owned by the Intermediate Holding Companies.

Parol evidence confirms what the plain language of the Loan Documents

requires. When Kulick requested a substantially larger loan from YSA, he had only

190 Dkt. 95 at 20–21.

191 Id. at 3, 20–21, 29–30.

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just repaid the October 8 Loan three weeks late.192 YSA required more protection

than it had on previous loans.193 In a February 10, 2025 email to his colleague, Miley

explained that YSA needed to hire a lawyer or other professional to advise on “a loan

whereby we would be providing funding to a multi-family real estate firm which

would be secured by the firm’s real estate portfolio.”194

On February 18, 2025, Miley texted Kulick: “Where this had previously

included 17 total entities (4 unencumbered), are we expanding to rest of portfolio? If

so, can you please send me a paragraph that I can copy into it with the other

entities?”195 Kulick was in a rush to get funded,196 and so Kulick told Miley to leave

192 JX-10 at 2 (identifying January 8, 2025 as the maturity date of the October 8

Loan); JX-58 (informing Diveroli on January 13, 2025 the October 8 Loan would be
repaid on January 20); JX-22 (providing the October 8 Loan was repaid on January
21, 2025); JX-3 at 35 (requesting a “longer term” Loan on January 31); JX-222
(searching for a real estate consultant on February 10 regarding a “loan to Vesta” and
seeking expertise to ensure YSA is “as protected by the collateral as we think we
are”).
193 Trial Tr. at 149:23–151:24 (Diveroli); JX-77 at 2 (requesting Kulick identify the

owner of each Property); JX-76 (requesting Kulick submit to “due diligence” in
connection with the February 2025 Loan); JX-73 at 2.
194 JX-222 at 1.

195 JX-12 at 2.

196 JX-73 at 2. Shortly after Miley asked Kulick if he had a paragraph to use for the
Joinder Kulick exclaimed, “[M]y biggest concern is as usual (lol) funding. Do we have
enough time to get this done?” JX-12 at 2. Less than 15 minutes later, Kulick asked:
“Efraim can we please get sign off so we can push ahead[.]” Id. at 3. Two hours later,
Kulick again pled for the Loan to be funded that day. Id. at 3 (“Can we find a way to
fund today still[?]”).

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it the same.197 Kulick texted back: “The answer is yes and no. I suggest we keep that

the same but maybe add a joinder to the portfolio as a whole.”198

Putting a fine point on it, in the preceding text message, Miley asked two

questions: (1) “are we expanding to rest of portfolio”; and (2) “can you please send me

a paragraph?” Kulick responded to each in turn: (1) “yes”; and (2) “no.”199 Yes, they

were expanding to the rest of the portfolio. No, no language was necessary. Instead,

Kulick suggested “a joinder to the portfolio as a whole.”200 Vesta’s website refers to

the word “portfolio” as individual real properties owned or controlled by Vesta,201

supporting that Kulick intended “portfolio” to refer to real properties.202

Kulick also referred in the exchanges that day to “a joinder with any asset

controlled by any affiliate of mine,” and “a joinder that joins any asset controlled by

any affiliate of mine.” 203 If Kulick intended the Joinder to be limited to adding

entities to stand behind the same Collateral in the CPSA, there would have been no

reason to refer to joining “any asset of any affiliate.”

197 JX-12; see JX-13 (“No change to [CPSA] at all except to add a joinder that joins

any asset controlled by any affiliate of mine.” (emphasis added)).
198 JX-12 at 2.

199 Id.

200 Id.

201 JX-185.

202 Trial Tr. at 149:23–151:9 (Diveroli); id. at 82:2–23 (Kulick).

203 JX-13.

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Consistent with this contemporaneous evidence, both Diveroli and Miley

testified that, prior to the February 2025 Loan, Kulick agreed to pledge his entire

portfolio to support the next loan.204

Plaintiffs also argue that it does not make sense that Kulick would pledge $900

million worth of additional property to support a $1.5–2 million loan. But Kulick

wanted the loans, YSA wanted greater protection, this is the compromise that Kulick

proposed and ultimately the deal the parties struck.205

B. Usury Defense

Plaintiffs separately raise a usury defense, contending that the interest rates

of the Loans are “facially unreasonable[.]”206 But Section 2306 forecloses any defense

based on the interest rate charged because here the borrower of each Loan was a

limited liability company. 207 Section 2306 provides: “No corporation, limited

partnership, statutory trust, business trust or limited liability company, . . . shall

interpose the defense of usury in any action.”208 Delaware courts have consistently

declined invitations to deviate from Section 2306’s mandate, even where the

204 Trial Tr. at 185:5–9 (Diveroli); id. at 196:17–197:7 (Miley).

205 Trial Tr. at 29:9–17 (Kulick) (testifying that “[t]hroughout 2025 I was desperate

for access to money to come into my business”); id. at 84:13–18 (Kulick) (“I was not of
the opinion that they needed additional collateral. . . . But this was meant to solve an
issue that was stopping us from getting the loan done that I desperately needed.”).
206 Dkt. 95 at 32–34.

207 6 Del. C. § 2306.

208 Id. (emphasis added).

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individual indorser or guarantor is a natural person.209 Because the defense of usury

would not be available to the entity Borrowers under the Loan Documents, the

defense is not available to Kulick.210

III. CONCLUSION

Because Plaintiffs have not demonstrated clear legal entitlement to the

mandatory injunctive relief they seek, this decision need not reach the other elements

of the claim or the other arguments raised by Defendant.211 Plaintiffs’ failure to prove

an essential element of their claim warrants judgment for Defendant.

209 Bank of Delaware v. NMD Realty Co., 325 A.2d 108, 111 (Del. Super. 1974)
(holding that “individual defendants as accommodation indorsers are not entitled to
assert the defense of usury inasmuch as it was not an available defense for the
corporate maker of the notes”); MacNeil v. Cusato, 1998 WL 1029267, at *4 (Del.
Super. Nov. 30, 1998) (“Whether Defendant’s position is termed privy, guarantor, or
accommodation party, the result consistently is estoppel from asserting usury where
such defense was not available to the original debtor. . . . Defendant, as guarantor,
was no stranger to the corporation’s preclusion from the defense of usury. Upon the
Corporation’s expiration, the Defendant-guarantor was not transformed into an
individual-debtor who could then assert the defense of usury.”); River Bank Am. v.
Tally-Ho Assocs., L.P., 1991 WL 35719, at *6 (Del. Super. Feb. 22, 1991) (“Under
Delaware law, an individual who is surety or guarantor of the corporate obligation is
under the same disability to assert the defense of usury as the corporation.”).
210 NMD Realty Co., 325 A.2d at 111.

211 YSA raised other arguments including that Kulick, Vesta, and Asset Holder lacked

standing because none hold title to the Properties subject to the second mortgages.
Dkt. 100 at 12. Having found that Plaintiffs failed to establish a right to have the
second mortgages removed, the court need not reach any other argument.

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