DAVIDOFF HUTCHER & CITRON LLP RW oFnees, DH . ATTORNEYS AT LAW more 605 THIRD AVENUE, Sore NEW YORK, NEW YORK 10158 ARSENY 1830, TEL: (212) 557-7200 ee FAX. (212) 286-1884 COOVERR MENT RELATIONS ‘wvaeneLEcacom Teo SIA SIReET WRITER'S DIRECT: (646) 428-2206 20a 470117 E-MAIL: ce@dhelogal.com February 19, 2020 Hon, Jodi Franzese Inspector General One West Street ‘Mineola, New York 11501 Re: E&A Restoration, Ine. Dear Ms, Franzese, This firm represents E&A Restoration, Inc, (“E&A"). We write you concerning Contract No. B-5-20 (B-19-10) (ID No. B90632-02G), and specifically in response to your office's February 7, 2020 report (annexed hereto as Exhibit “A”), For the reasons more fully stated below and given E&A’s long, stellar history with public projects, we respectfully submit that E&A’s vendor disclosure forms were factually accurate, and ‘that E&A is, in fact a “responsible vendor”, eligible for the subject contract award. E&A B&A is a WBE certified contractor in Nassau and Suffolk Counties.' E&A’s sole shareholder, officer and director is Kalliopi Vournou. Notably, to expand on this point, in each performance bond application submitted by E&A for completion work, the bonding companies look solely to Kalliopi Vournou’s financial statements. Thus, it is Kalliopi Vournou's assets, not those of Jenny Sakalis and Antonios Vournou, which are the collateral for any of E&A’s performance bonds. B&A has had a long, successful history of performing construction work for Nassau County. Specifically, over the past fifteen (15) years, E&A has been awarded sixteen (16) contracts as itemized in the schedule annexed hereto as Exhibit “B”, Each time E&A has received a contract award from Nassau County, they have submitted the identical disclosure forms as those submitted in the subject contract, that is, forms that indicate that Kalliopi "As the subject contact is not an WBE contract, any discussion concerning WBE requirements or operations has no relevance here, 7999703DAVIDOFF HUTCHER & CITRON LLP February 19, 2020 Page 2 Vournou is E&A’s sole shareholder, officer and director. True and correct copies of the contract awards and the disclosure forms (that are in E&A’s possession) are annexed hereto as Exhibit “om Whether Kalliopi Vournou’s son, Antonios Vournou, or daughter, Jenny Sakalis, have referred to themselves as “Officers”, “Owners Representative” or CFO, on LinkedIn or an industry website, have no legal significance. Again, Kalliopi Vournou is E@&A’s sole shareholder, officer and director as demonstrated by E&A’s most recent corporate tax retum, a ‘true and correct copy of which is annexed hereto as Exhibit “D”, and bond, a true and correct copy (demonstrating that Kalliopi Vournou, her husband Steven Vournou, and several investment entities which Kalliopi Vournou is a shareholder or member are the sole guarantors) of which is annexed hereto as Exhibit “E”, The forms do not ask for “de facto” officers or key employees. Instead, the Principal Questionnaire Form calls for answers by “all officers and any individuals who hold a ten percent (10%) or greater ownership.” Last, whether individuals not associated with B&A believe that others are in fact officers of E&< is irrelevant, as the corporate books, records, tax filings and bond demonstrate that E&A. has one shareholder, officer and director. Toward that end, since 2005, there has never been any formal corporate appointment of an officer other than Kalliopi Vournou. ‘Testimony and Interviews Both Kalliopi Vournou and Antonios Vournou gave consistent testimony during their interviews with IG staff. Each consistently described Kalliopi Vournou as the sole shareholder, officer, and director. Each consistently described that Antonios Vournou would run the day to day operations in the field and that Jenny Sakalis would run the day to day operation in the office. Moreover, each consistently described that daily, the three would meet to discuss E&A matters, and tellingly, Kalliopi Vournou would be the final arbiter of any major decisions. ‘The mere fact that day to day operations are handled by individuals other than Kalliopi Vournou do not anoint the individuals to the status of officer or director. Nor would an arbitrary designation as “de facto” officers suggest that Ms. Sakalis or Mr. Vournou be considered officers, since the concept of a de facto officer, from a legal standpoint, is only intended to protect ‘third parties relying on the alleged de facto officer’s authority to contract for the ‘company.? 2 The Cour in fa re Gen. Vision Services, Inc, 423 B.R. 790 (S.D.N.Y. 2010) explained how a de facto officer may bind the corporation with respect to its dealings with third parties but is not, infact, an officer de jure One's status as a de fact officer is limited to the public and third persons interested in his acts, and beyond that he is @ "mere usurper” whose acts are invalid... In his relationship with the corporation itself, “a de facto director in not a director in law or in fact.” Jn re Gen. Vision Services, Inc., 423 B.R. at 794 (citations omitted; see also Stile v Antico, 272 A.D.2d 403, 404 (Cd Dept. 2000) (noting that de facto director may bind the corporation but is not, in law or fact, a director); In re 6799900.3DAVIDOFF HUTCHER & CITRON LLP February 19, 2020 Page 3 Again, no corporate action has ever been taken to appoint Jenny Sakalis or Antonios ‘Vournou as officers. In addition, notably, the application forms do not ask for any information or disclosure related to key personnel or management aside from principals/officers.” Unrelated Investment s ‘The County's disclosure forms require that applicants disclose whether they have “been a principal or officer of any business . . . other than the one submitting the questionnaire”, In responding to the subject contract, Kalliopi Vournou correctly answered “no” to this question. However, in the interest of full disclosure, at the IG interview, and subsequent to the IG interview, Kalliopi Vournou provided certain information listing several single purpose entities, both Subchapter $ Corporations and Limited Liability Companies, all of which hold investments, that is real property ‘These single purpose entities are not separate businesses, instead they are investment vehicles as those terms as generally understood.‘ To classify these investments as “businesses” is simply inacourate as Kalliopi Vournou does not operate # business, she is either the shareholder or member of an entity that owns real property. In fact, in the past, Kalliopi Voumou was advised by County personnel not to include the real estate investment entities as they were not “businesses” yet investments,> ‘The forms are what they are and did not include an expansive definition of “businesses”, yet we respectfully submit that F&A accurately completed the disclosure forms. Again, in the interest of full disclosure, the names of Kalliopi Vournou’s investment entities have been provided, Also, in the interest of full disclosure, while we dispute that Antonios Vournou and Jenny Sakalis are required to submit the relevant disclosure forms, we annex them herewith, George Ringler & Co., 204 N.Y. 30, 42 (1912) (noting that the legal fiction of de facto officers was ereated “to protect the interests ofthe public and individuals, where those interests were involved in the official acts of persons exercising the duties ofan office without being lawful officers”); Dillon v Scotten, Dillon Co., 335 F-Supp. $66, $69 (D. Del. 1971) (“The doctrine of de facto directors does not epply in cases not involving third parties.”) 2 The form is also unclear on its face and could arguably be read not to require information ftom Jenny Sakalis or [Antonios Vournow even if they were considered officers de jure. The fist line of the form states that “{all questions ‘on these questionnaires must be answered by all officers and any individuals who hold a ten percent (1026) or [greater ownership interes in the proposer.” This language could reasonably be interpreted to request information only of officers (as well as any other individuals) holding a ten percent interest in EA. Importantly, neither Jenny Sakalis or Antonios Vourou hold any interest in E&A. “Black's Law Dictionary makes a clear distinction between a “business” on one hand and an “investment” on the other, A business is “e particular occupation or employment habitually engaged in for livelihood or gain” while an investment is an “expenditure to acquire property or assets to produce revenue; a capital outlay.” BUSINESS, Black's Law Dictionary (Ith ed. 2019), INVESTMENT, Black’s Law Dictionary (I1th ed. 2019). Certainly, Kalliopi Vournou's real estate investments do not constitute a business within the common understanding of the word, 5 In one Principal Questionnaire Form, or Contract B904Q0-03GR, Ms. Vournou did answer “yes” tothe question ‘conceming businesses, and simply wrote “Real Estate Properties” (see Exhibit “C") 6799973DAVIDOFF HUTCHER & CITRON LLP February 19, 2020 Page 4 along with a revised E&A disclosure form and a revised Principal Disclosure Form as Exhibit opm Conclusion ‘The purpose of the County's disclosure forms is to ensure that the County has sufficient information on the applicants in order to review the applicant's criminal, corporate and financial status. Here, Kalliopi Vournou properly submitted factually accurate disclosure forms, as E&A’s corporate records, tax returns and financial statements all indicate that she is E&A’s sole shareholder, officer and director. The fact that Kalliopi Vournou’s children are involved in day to day operations does little to belie the fact that, again, Kalliopi Voumou is E&A’s sole shareholder, officer and director, and thus, the only one who rightfully should have submitted disclosure forms. In the interest of full disclosure, the County now has the disclosure forms of Antonios Voumou and Jenny Sakalis, nominally, two E&A employees. As Antonios Vournow has received contracts from the County for another entity, we are confident that any review of these supplemental disclosure forms will provide the County with additional comfort. Also, should the County wish additional disclosure forms from other key E&:A employees, E&A stands ready to provide those as well. Last, given E&A’s stellar history with the County, and the explanations above along with the supporting documentation, we respectfully submit that E&A has accurately responded to the requisite forms, Further, E&A has always been deemed to be a “responsible vendor”. Considering the totality of the circumstances here, to think otherwise of E&A would simply be a wrong decision, and accordingly, E&A reserves all its legal rights herein. See, e.g,, 44d Carting and Rubbish Removal, Inc. v Town of Southeast, \7 N.Y.3d 136, 144 (2011); Professional Sec. Bur., Ltd. v City Univ. of New York, 151 Mise.2d 225, 228 (Sup. Ct. New York Cty. 1991). "te bp COnt Charles Capetanakis Enel. 67999703