[ADiamond]

This is a huge (sized) filing so, I'm just going to cut through the excess fat here and give you the highlights...

Long story short - Itria Ventures claims to have true first position rights to all receivables and applicable collateral, so although stackers may have acted first in attempting to collect on a defaulted merchant - Itria says "NUH - UH! Our Money!" Chase even told Itria "No" over a deposit account that a stacker got first, so Itria said Oh Yeah? Well then, F.U.! We'll just sue everyone!!!!!!!!!

Looks like they even claim to have right to receive over everyone, even the merchant's NextGear floor plan.

Reminds me of the SBTL v. Pearl (Or SBFS? Idk) in Maryland - but I think that one ended with a settlement (chime in if you know?)

SO - It'll be very interesting to see how this one turns out, especially if it sets precedent for future RTR claims between funders/creditors in this space & and in New York.

YOU CAN READ THE FULL DOCUMENT FILING HERE!

Itria Ventures v.

JPMORGAN CHASE BANK, NA;
RELIANCE MOTORS LLC;
FIRST HOME BANK;
NEXTGEAR CAPITAL INC.;
PRIVATE MORTGAGE INVESTMENTS LLC SERIES 3;
US CAPITAL PARTNERS INC.;
1 WEST CAPITAL LLC;
BUSINESS MERCHANT FUNDING;
EMPIRE FUNDING;
WORLD GLOBAL CAPITAL, LLC D/B/A YES FUNDING;
YELLOWSTONE CAPITAL WEST LLC;
GTR SOURCE, LLC;
ACE FUNDING SOURCE, LLC;
and RICHARD J. PAGNOTTA

On or about November 23, 2016, Itria entered into two separate agreements
(the “November 2016 FRSAs”) with a California limited liability company known as
Reliance Motors, LLC (“Reliance”), pursuant to which Itria agreed to purchase Reliance’s
future accounts receivable at a discount. Under the first agreement, Itria agreed to purchase
Reliance’s future accounts receivable valued at $384,000 for a purchase price of $300,000.

Under the second agreement, Itria agreed to purchase Reliance’s future accounts receivable
valued at $256,000 for a purchase price of $200,000.

Subsequently, on or about November 9, 2017, Itria entered into an agreement
to purchase the future receivables of Reliance (along with certain of affiliated entities) (the
“November 2017 FRSA”), pursuant to which Itria agreed to purchase Reliance’s future
accounts receivable valued at $650,000 for a purchase price of $500,000.

Subsequently, on or about March 28, 2018, Itria entered into a fourth
agreement to purchase the future receivables of Reliance (along with certain of affiliated
entities) (the “March 2018 FRSA”), pursuant to which Itria agreed to purchase Reliance’s
future accounts receivable valued at $750,000 for a purchase price of $600,000.

Thereafter, in or about July 2018, Reliance defaulted under the November 2016
FRSAs, the November 2017 FRSA, and the March 2018 FRSA by failing to deliver the
purchased percentage of receivables due to Itria as required thereunder.
As a consequence thereof, Itria filed the affidavits in support of confessions of judgment against Reliance with
the Supreme Court of New York, County of Richmond. On August 1, 2018, that Court
entered judgment in favor of Itria and against Reliance (and others, where applicable) in the
amount of:

(a) $202,207.80 in connection with the first of the November 2016 FRSAs
(Index No. 151977/2018);

(b) $85,572.37 in connection with the second of the November 2016 FRSAs
(Index No. 151979/2018);

(c) $311,141.27 in connection with the November 2017 FRSA (Index No.
151978/2018); and

(d) $538,427.98 in connection with the March 2018 FRSA (Index No.
151981/2018).

Pursuant to the foregoing judgments, Reliance owes Itria the sum of
$1,137,349.42, plus accrued and accruing post-judgment interest.

Following the entry of the foregoing judgments, Itria took steps to enforce same
against Reliance’s assets, including funds maintained by Reliance in a deposit account at
Chase Bank. On or about August 2, 2018, the New York City Marshal served a Levy and
Demand (the “Levy and Demand”) on Chase Bank in execution of each of Itria’s judgments.

Chase Bank has acknowledged receipt of each Levy and Demand, but has
declined to turn over to the Marshal any funds maintained by Reliance in a deposit account
at Chase Bank because another creditor has apparently levied on such funds as well. In
addition to Itria, four creditors recently obtained judgments against Reliance, as follows:

(a) on August 1, 2018, Ace Funding Source, LLC (“Ace”) obtained
judgment against Reliance in the amount of $943,321.25;

(b) on August 2, 2018, World Global Capital, LLC d/b/a Yes Funding
(“Yes Funding”) obtained judgment against Reliance in the amount of $1,018,741.88;

(c) on August 2, 2018, Yellowstone Capital, LLC (“Yellowstone”)
obtained judgment against Reliance in the amount of $371,812.50; and

(d) on August 3, 2018, GTR Source, LLC (“GTR”) obtained judgment
against Reliance in the amount of $1,472,705.00.

Itria believes that Ace, Yes Funding, Yellowstone, and/or GTR is the creditor
which has also levied on the funds maintained by Reliance in its deposit account at Chase Bank.

For the reasons set forth below, Itria’s perfected security interests and liens hold
priority over the liens of all other creditors with respect to the funds maintained by Reliance
at Chase Bank. As a result, by this Petition Itria requests turnover of the funds as presently
maintained by Reliance in the Chase Bank deposit account

Generally speaking, the rights to an asset which is the subject of competing
claims of judgment creditors is governed by the “first in time” doctrine. That is, a levying
judgment creditor will take priority over a subsequent levying creditor.
However, that analysis changes when secured creditors are implicated.
Under New York law, a levying judgment creditor is subordinate to the rights of a prior perfected secured
creditor.

Section 9-327 of the N.Y. UCC governs the priority of security interests in a
“deposit account,” as that term is defined in N.Y. UCC § 9-102(29). That section provides
generally that a creditor holding a security interest perfected by “control” over a deposit
account – as that term is defined in N.Y. UCC § 9-104 -- will have priority over creditors with
security interests not perfected by “control”.

Here, none of the creditors competing for priority with respect to Reliance’s
deposit account at Chase Bank has “control” over such account in accordance with N.Y.
UCC § 9-104, and thus the priorities set forth in N.Y. UCC § 9-327 are not applicable.
However, that circumstance does not diminish the fact that Itria has a perfected security
interest in the funds maintained in the Chase Bank account by way of other perfection
mechanisms

As duly noted above, Itria purchased Reliance’s future accounts receivable
pursuant to the November 2016 FRSAs, the November 2017 FRSA, and the March 2018
FRSA. Accounts receivable fall within the definition of “payment intangible,” i.e., “a general
intangible under which the account debtor's principal obligation is a monetary obligation”,

The sale of a payment intangible is granted automatic perfection upon
“attachment,” that is, when the security interest becomes enforceable against the debtor.

As also duly noted above, Itria’s security interest in Reliance’s accounts
receivable extends to the “proceeds” of such accounts receivable. N.Y. UCC 9-102(64)
defines “proceeds” as “[w]hatever is acquired upon the sale, lease, license, exchange, or other
disposition of collateral [and] whatever is collected on, or distributed on account of,
collateral.”

Accordingly, by virtue of Itria’s perfection of its interest in Reliance’s accounts
receivable, Itria’s security interest in the “proceeds” of such accounts receivables is also
properly perfected. Furthermore, Itria’s perfected security interest in
the proceeds of Reliance’s accounts receivable includes the identifiable “cash proceeds” of
such accounts resident in any “deposit account” maintained by Reliance.

In other words, although Itria’s perfected security
interest in the traceable proceeds of Reliance’s accounts maintained in any deposit account
held by Reliance at Chase Bank may be subordinate to the interests of a secured creditor
holding “control” over such deposit account pursuant to N.Y. UCC § 9-327, it is superior to
the security interests of all other creditors who perfected their security interests in the accounts
or proceeds of the accounts of Reliance subsequent in time to that of Itria.

In addition, and as noted above, Itria’s perfected security interest is superior to
all subsequent judgment lien creditors.

According to a lien
search conducted by Itria, the following creditors filed UCC-1 financing statements to perfect
their security interests in the accounts of Reliance, but all post-dated the filing by Itria:

(a) First Home Bank filed a UCC-1 financing statement on March 3, 2016;

(b) NextGear Capital, Inc. filed a UCC-1 financing statement on June 22,
2016;

(c) Private Mortgage Investments LLC Series 3 filed a UCC-1 financing
statement on February 3, 2017;

(d) US Capital Partners Inc. filed a UCC-1 financing statement on
November 16, 2017;

(e) 1 West Capital LLC filed a UCC-1 financing statement on July 6, 2018;
and

(f) Business Merchant Funding/Empire Funding filed a UCC-1 financing
statement on August 1, 2018.