Home Courts Executives put future of ‘deadlocked’ Garthchester Realty in question

Executives put future of ‘deadlocked’ Garthchester Realty in question

The parent company of Garthchester Realty, a major co-op and condominium management company in Westchester, could be dissolved if two executives have their way.

Craig Perusini and Brian Scally claim that Claudine Gruen has ignored management duties, according to a petition filed June 15 in Westchester Supreme Court, and refused to honor a deal that would give Scally 20% interest in the parent company, Core Alliance Real Estate Corp.

Claudine Gruen and Craig Perusini, c. 2015

“It is impossible for Core Alliance to carry on business for the benefit of all shareholders,” the petition states, “due to the deadlock between the petitioners and … Gruen.”

“On advice of counsel, I will not litigate in the press,” Gruen replied in an email responding to a request for her side of the story. “I will be filing an answer with counterclaims setting out my position which will place the allegations in the complaint in a completely different light.”

Garthchester was organized in 1981 by two residents of a co-op on Garth Road in Scarsdale, according to the company website. In 2015 Gruen, Perusini and Scally acquired the company through Core Alliance.

Gruen and Perusini each control 50% of the shares of Core Alliance, the petition states, and they agreed seven years ago to transfer 20% of the shares to Scally in five years.

Garthchester had managed 45 properties in Westchester and six in Riverdale in the Bronx. Now the company manages 54 properties in Westchester, 11 in Queens, 10 in Riverdale and one in Manhattan. It has offices in Harrison and Forest Hills, Queens.

After the deal was struck in 2015, Gruen allegedly advised her partners that she would not participate in management of the Westchester and Riverdale properties. Instead, she would develop business in Queens.

“This came as a shock to Perusini and Scally,” the petition states, because cultivating close relationships with co-op boards, shareholders and building superintendents is an essential part of the business.

The men also claim that she created a hostile work environment by treating employees disrespectfully, refusing to comply with the company dress code, and dismissing longstanding policies and practices as useless and stupid.

She offended a job candidate so badly in 2017, the petition alleges, that the woman called the next day and said she would never work for the company as long as Gruen was associated with it.

Two years ago, having completed his fifth year of service, Scally asked for his 20% interest. But despite acknowledging the obligation and stating in an email,”We made a deal and gave our word,” the petition states, Gruen has refused to agree to the transfer.

Last month, Gruen demanded to inspect the company’s books and records, according to the petition, and she has accused Perusini and Scally of breach of  fiduciary duties, depriving her of opportunities with other property management companies, and treating her as an oppressed shareholder.

The men claim they would have welcomed more involvement by her, “but Gruen abandoned them and the company.”

With the company controlled 50-50 by Gruen and Perusini, and despite Scally’s putative 20% interest, the petition states, “there is no mechanism to break the management deadlock.”

Perusini and Scally are asking the court to order Gruen to approve a 20% transfer of shares to Scally, dissolve the company, and appoint a receiver to wind up its affairs.

Internal dissension and bitterness between the factions are so great, the petition states, “that dissolution would be beneficial to the shareholders.”

Perusini and Scally are represented by White Plains attorney Peter S. Dawson.


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