IN THE UNITED STATES DISTRICT COURTFOR THE NORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

ORIX CAPITAL MARKETS, LLC, §SPECIAL SERVICER FOR §BANK OF AMERICA, NATIONAL §ASSOCIATION, §SUCCESSOR BY MERGER WITH §LASALLE BANK NATIONAL §ASSOCIATION, TRUSTEE FOR § CIVIL ACTION NO. 03:11-cv-40THE GS MORTGAGE SECURITIES §CORPORATION II, COMMERCIAL §MORTGAGE PASS-THROUGH §CERTIFICATES, SERIES 1999-C1 §

§Plaintiff §

§v. §LIAQUAT A. PIRANI §

§Defendant §

PLAINTIFF'S ORIGINAL FIRST AMENDED COMPLAINT

TO THE UNITED STATES DISTRICT COURT:

Plaintiff ORIX Capital Markets, LLC, Special Servicer for U.S. Bank, National

Association, as successor-in-interest to Bank Of America, National Association, Successor By

Merger With LaSalle Bank National Association, Trustee for the GS Mortgage Securities

Corporation II, Commercial Mortgage Pass-through Certificates, Series 1999-C1 (hereinafter

“ORIX”) brings suitamends its Original Complaint asserting claims against Defendant Liaquat

A. Pirani (hereinafter “Pirani”).

PARTIES

1. ORIX Capital Markets, LLC (“ORIX”) has been appointed Special Servicer for

the trust pursuant to the terms and provisions of the Pooling and Servicing Agreement governing

the trust and by separately executed powers of attorney, one of which was most recently executed

by the Trustee on November 4, 2009. ORIX is a Delaware limited liability company with its

principal place of business in Dallas, Texas. Effective January 20, 2011 (after the Original

Complaint in this action was filed) U.S. Bank, National Association succeeded Bank of America,

National Association as Trustee for GS Mortgage Securities Corporation II, Commercial

Mortgage Pass-Through Certificates, Series 1999-C1 (hereinafter “Trustee”), is the trustee for

a”). The trust is organized under the Real Estate Mortgage Investment Conduit (“REMIC”)

provisions of the Internal Revenue Code, 26 USC § 860D. Bank of AmericanAmerica, National

Association, is a national bank with its designated home office in North Carolina... U.S. Bank,

National Association is a national bank with its designated home office at 425 Walnut Street,

Cincinnati, Ohio 45202. U.S. Bank, National Association executed additional powers of attorney

further authorizing ORIX to act as special servicer.

2. Defendant Pirani is a citizen of a country other than the United Stated of America.

Pirani conducts business within the State of Texas as described in more detail below, including

but not limited to the execution of and performance of contracts within the State of Texas and

which expressly provide for the submission to the jurisdiction of any court within the State of

Texas. Pirani may be served by service upon his counsel, Mark Murphy with Oppenheimer,

Blend, Harrison & Tate, Inc., 711 Navarro, Sixth Floor, San Antonio, Texas 78205. Pirani, by

and through his counsel, Mr. Murphy, agreed to accept service of process based on

representations made in open court in Bexar County, Texas, as reflected on Exhibit A attached.

Alternatively, Pirani does not maintain an agent for service of process within the State of Texas,

although he has conducted business within the state, within the meaning of Texas Civil Practice

and Remedies Code, Section 17.042. He may be served with summons and complaint pursuant to

Plaintiff’s OriginalFirst Amended Complaint – Page 2

the Texas Long Arm Statute, Texas Civil Practice and Remedies Code, Sections 17.041-045, by

service on the Texas Secretary of State and mailing to his last known address, the address

provided in his Guaranty contract described below, 100 Villita Street, San Antonio, Texas 78205.

JURISDICTION AND VENUE

3. This Court has subject matter jurisdiction over this matter pursuant to 28 USC

§ 1332(a) as the dispute here is between citizens of a State and citizens or subjects of a foreign

state and the amount in controversy exceeds the sum or value of $75,000, exclusive of interests

and costs.

4. Venue is proper in the Northern District of Texas, Dallas Division pursuant to 28

USC § 1391(d). Also, the Trustee’s attorney-in-fact, ORIX, and its responsible employees

maintain offices and conduct business in Dallas, Texas.

BACKGROUND FACTS

5. ORIX seeks judgment against Pirani as guarantor of a real estate secured

promissory note executed by La Villita Motor Inn, a Texas joint venture (“La Villita”) between

Pirani owned and controlled entities known as Executive Motels of San Antonio and S.A.

Sunvest Hotels, Inc. (collectively the “La Villita Parties”). A true and correct copy of the

Promissory Note (the “Note”) is attached as Exhibit B.

6. Pirani executed a written Guaranty of the La Villita loan, which was a condition

for the lender’s extension of credit to La Villita. A true and correct copy of the Guaranty is

attached as Exhibit C.

7. The La Villita Note is secured by a pledge of real estate, related items of personal

property and the cash flow generated by La Villita. La Villita has conducted a hotel business in

downtown San Antonio, Texas on the collateral premises.

Plaintiff’s OriginalFirst Amended Complaint – Page 3

8. As anticipated in the loan documents, the original lender transferred the Note to

the original Trustee for GSMS 1999-C1 Trust (the “Trust”), a REMIC trust, as a result of the

following transfers:

(1) on September 25, 1998, AMRESCO endorsed the Note to AMRESCO Capital Limited, Inc.;

(2) AMRESCO Capital Limited, Inc. then endorsed the Note to the Trustee, LaSalle National Bank.

9. Accordingly, for virtually the entire duration of the loan term, the Trustee (or its

predecessor) has been the owner and holder of the Note. On October 1, 2007, LaSalle National

Bank’s holding company was acquired by Bank of America, N.A.. As a result of Bank of

America became the successor trustee to the Trust. Effective January 20, 2011, U.S. Bank,

National Association succeeded Bank of America as Trustee. ORIX, as the Trust’s Special

Servicer, is authorized to enforce the loan documents on behalf of the Trustee.

10. La Villita defaulted in various respects on its obligations under the various loan

documents effective April 16, 2008. Later, in 2009, the La Villita Parties commenced a lawsuit

in state district court in San Antonio, Texas disputing the obligations under the loan documents

and enjoining ORIX from foreclosing on the collateral. The trial court entered a judgment

awarding certain of the relief requested by the La Villita Parties.

11. The judgment required LaVillita to make certain monthly payments on the Note

indedtedness. LaVillita made only two such monthly payments.

12. On appeal, the San Antonio Court of Appeals reversed and rendered judgment for

ORIX for all amounts due and owing pursuant to the loan documents and remanding the case for

determination of attorney’s fees owed under the loan documents. A true copy of the opinion of

the San Antonio Court of Appeals is attached as Exhibit D.

Plaintiff’s OriginalFirst Amended Complaint – Page 4

13. On December 7, 2010, the La Villita Parties sought review of the Court of

Appeals’ judgment by the Texas Supreme Court. The petition for review remains pending at this

time.

14. After the decision of the San Antonio Court of Appeals, but while the case was

still pending in the Court of Appeals, ORIX sought the appointment of a receiver. Although the

loan documents provide for an unconditional assignment of rents from the Property and permit

ORIX to have a receiver appointed upon the occurrence of an event of default under the Note,

the La Villita Parties opposed the appointment. But the trial court refused to appoint a receiver;

causing the Court of Appeals to order the trial court to appoint a receiver. Just before the trial

court was to hear the receivership matter, La Villita filed a voluntary bankruptcy petition. The

collateral remains under the control of La Villita, as debtor-in-possession.

15. Since the loan default, La Villita has failed to fully account to ORIX with respect

to the rents generated by the collateral. One expenditure that was inappropriately made during

this time was to have a large wall facing a neighboring parking lot painted a garish green –

apparently in violation of City rules or ordinances. The expenditures for this action and the cost

to contest or correct the rule or ordinance violation should not have been made with the cash

collateral and is in violation of various provisions of the loan documents.

16. In June, 2010, La Villita presented its protest of the La Villita hotel property tax

valuation to the Bexar Appraisal Review Board. La Villita’s authorized representative protested

the Bexar Appraisal District’s valuation on the grounds that the District’s valuation was over

market and was unequal with others. La Villita’s authorized representative, Allison Hunt,

testified under oath that the value of the hotel property was $5.279 million. La Villita’s

Plaintiff’s OriginalFirst Amended Complaint – Page 5

authorized representative testified that the hotel property “for so many years it was not

maintained well.”

17. Pirani is obligated by the Guaranty to maintain a certain level of assets in the

United States. Pirani represented on an October 2008 financial statement that he held only one

United States asset, other than his interests in the La Villita Parties. That other interest was

valued by Pirani, and was and is worth, no more than $20,000. With the exception of the one

other United States asset valued at $20,000, Pirani’s entire United States holdings are his

interests in the La Villita Parties.

18. The various loan documents and the Guaranty generally provide that ORIX’s

recourse for payment of the debt obligation is to the collateral. However, certain exceptions to

the limited recourse nature of the debt obligation are provided for in the loan documents and the

Guaranty. A number of those exceptions have been triggered and Pirani is liable under the

Guaranty exceptions as outlined below.

FIRST CAUSE OF ACTION

Breach of Contract

19. Section 1.2(iii) of the Guaranty provides that Pirani is liable for the unpaid

balance of all amounts due and owning pursuant to the loan documents by virtue of a default

under Section 3.4 of the Guaranty. Section 3.4 of the Guaranty requires Pirani to remain solvent

and to maintain assets in the United States at all times equal to or greater than $7 million dollars

and to keep his net worth at all times equal to or greater than $2.5 million dollars. The section

also requires Pirani to immediately notify the lender (and its successors) of certain transfers,

hypothecations, or pledges of assets. Pirani has provided no notification to the lender. Pirani has

failed to provide information to ORIX demonstrating his full and complete compliance with

Plaintiff’s OriginalFirst Amended Complaint – Page 6

Section 3.4 of the Guaranty. As a result of this default, Pirani is fully liable for all amounts due

and owing pursuant to the Loan Documents.

20. In addition to full recourse under Section 3.4 of the Guaranty Agreement, Section

1.2 of the Guaranty provides for Pirani’s liability to the extent of any loss incurred by the lender

(and its successors) arising through various prescribed conditions and circumstances. In the

alternative to full recourse under the loan documents, Pirani is liable for the losses incurred as a

result of these other limited recourse events as follows:

(a) Section 1.2 (c) of the Guaranty makes Pirani liable for losses airising from litigation, including a bankruptcy filing, that delays or impairs the lender’s ability to enforce or foreclose its lien on the collateral.

(b) Section 1.2(e) of the Guaranty makes Pirani liable for losses arising from gross negligence and willful misconduct of La Villita and related parties.

(c) Section 1.2(g) of the Guaranty makes Pirani liable for losses arising from certain physical waste of the collateral and the failure to properly maintain, repair and restore the collateral.

(d) Section 1.2(k) of the Guaranty makes Pirani liable for misapplication of rent after default.

21. ORIX has suffered damages for which Pirani is liable under the Guaranty as

follows:

(a) ORIX has incurred significant expenses in defending La Villita Parties’ claims in the litigation including but not limited to attorneys’ fees and expenses, employee travel costs, third party reports and other litigation related expenses, which exceed $ 845,000.

(b) The value of the collateral has declined during the delay caused by the La Villita Parties. The amount of the decline at this time is undetermined. La Villita blocked ORIX’s effort to inspect and appraise the collateral.

(c) The collateral is believed to have suffered actual waste. The amount of the waste at this time is undetermined. La Villita blocked ORIX’s effort of inspect the collateral.

(d) The LaVillita Parties have misapplied rents and made expenditures since default which are prohibited by the loan documents. The amount of the

Plaintiff’s OriginalFirst Amended Complaint – Page 7

misapplied rents and prohibited payments is undetermined at this time. La Villita has refused ORIX’s request for documents and information about the operation of the collateral.

(e) As the La Villita parties are continuing pursuit of their lawsuit claims and have initiated a bankruptcy proceeding, ORIX will continue to incur additional damages for which Pirani will be liable pursuant to the Guaranty.

(f) Expenditures associated with painting the collateral’s wall in violation of City rules or ordinances and responding to violations or remedying the violations, if paid by La Villita, have and will utilize resources which should have been paid to ORIX.

22. ORIX reserves the right to pursue and recover all additional damages from Pirani

and the right to amend this complaint to address such future damages as and when they arise.

SECOND CAUSE OF ACTION

Imposition Of Trust

23. Section 4.3 of the Guaranty provides that any funds received by Pirani contrary to

the terms and provisions of the Guaranty are to be held in trust. ORIX seeks the imposition of an

express trust or a constructive trust over all funds Pirani received from the La Villita and the La

Villita Parties contrary to the terms and provisions of the loan documents.

ATTORNEYS FEES

24. ORIX is entitled to recover its reasonable and necessary attorneys fees incurred in

this action relating to Pirani’s breach of Guaranty agreement. ORIX is entitled to recover all such

fees and expenses in accordance with Texas Civil Practice and Remedies Code, Chapter 38.

CONDITIONS PRECEDENT

25. All conditions precedent to ORIX’s claims and right of recovery have occurred,

been performed, or been waived.

Plaintiff’s OriginalFirst Amended Complaint – Page 8

PRAYER

WHEREFORE, PREMISES CONSIDERED, Plaintiff prays that it recover a judgment

against Defendant Pirani for the amounts outlined above, including but not limited to

prejudgment and postjudgment interest at the rates allowed by law or as provided by the Loan

Documents, whichever is greater, the imposition of an express or constructive trust, costs of

court and such other relief to which it may show itself justly entitled.

Respectfully submitted,

/s/ Jeff Joyce Jeff JoyceTexas State Bar No. 11035400Direct Dial: (713) 222-1113Email: jjoyce@joyceandmcfarland.com

JOYCE, MCFARLAND + MCFARLAND LLP712 Main Street, Suite 1500Houston, Texas 77002Telephone: 713.222.1112Facsimile: 713.513.5577

ATTORNEY-IN-CHARGE FOR PLAINTIFF

OF COUNSEL:

Greg MayState Bar No. 13264500Amy HowellState Bar No. 24027864ORIX USA Corporation1717 Main Street, Suite 900Dallas, Texas 75201(214) 237-2000(214) 237-2018 (fax)

Plaintiff’s OriginalFirst Amended Complaint – Page 9

CERTIFICATE OF SERVICE

I certify that on February ___, 2011, a true and correct copy of the foregoing was served in a manner prescribed by the Texas Rules of Civil Procedure to:

F. Colin Durham, Jr.Key Harrington Barnes, PC3710 Rawlins StreetSuite 950Dallas, Texas 75219Fax 214.615.7926cdurham@keyharrington.com

Jeff Joyce

Plaintiff’s OriginalFirst Amended Complaint – Page 10

EXHIBITS

Exhibit A: Excerpt from transcript of August 28, 2009 Hearing in Cause No. 2009-CI-07339; La Villita Motor Inns, J.V., et al vs. ORIX Capital Markets, LLC, et al., In the 150th Judicial District Court of Bexar County, Texas;

Exhibit B: Promissory Note dated September 25, 1998 executed by La Villita Motor Inn, a Texas joint venture between Executive Motels of San Antonio and S.A. Sunvest Hotels, Inc.

Exhibit C: Guaranty dated September 25, 1998 executed by Liaquat Pirani

Exhibit D: August 25, 2010 Opinion rendered by The Fourth District Court of Appeals, Texas, Case No. 04-09-00573-CV.

Plaintiff’s OriginalFirst Amended Complaint – Page 11