The co-owner of a Mount Vernon construction materials company is suing his partners for nearly $6.6 million for corporate waste and other alleged misdeeds.
Kieran Keaveney claims that Shane Devlin misappropriated assets from GC Warehouse LLC with the assistance of bookkeeper Edel Cannon, in a March 22 complaint filed in Westchester Supreme Court.
Devlin and Cannon breached the partners’ operating agreement by manipulating and concealing financial records, the complaint states, “to prevent Keaveney from uncovering the breadth of their mismanagement, misconduct and improprieties.”
The defendants did not respond to a request for comment sent to a company email address.
GC Warehouse was formed in 2014 and began selling building materials and supplies in 2015 to contractors in the Tri-state region. In 2018, Keaveney and Devlin bought the building that now houses the business, at 519 South 5th Avenue, Mount Vernon, for $2.8 million.
Keaveney and Devlin each hold a 45% interest in the company, according to the complaint, and Cannon holds 10%.
Devlin is the manager and is responsible for day-to-day operations. Cannon is the bookkeeper. Keaveney handles marketing and promotion. He claims he brought seven of the top ten clients to the business and is the primary contributor to annual revenue.
Keaveney became suspicious when Devlin announced that GC had lost $234,000 in the first five months of 2021. He was concerned, the complaint states, because there was a heightened demand for building supplies and because the company had received nearly $1.1 million in federal Paycheck Protection Plan loans in 2020 and 2021.
Keaveney accuses Devlin of funneling $478,848 in corporate funds in 2019 for personal expenses, such as a Peloton subscription, gym membership, and entertainment in Dublin, Ireland.
He claims that Devlin also diverted GC Warehouse supplies for the renovation of his homes.
The partners are supposed to receive annual distributions based on their shares of interest in the company, according to the complaint. But from 2019 through 2021, Devlin allegedly received $1,097,151 in annual distributions and Keaveney received nothing.
The complaint describes their relationship as both professional and personal. In 2017, Keaveney provided 53,000 Euro to Devlin to buy a 100-acre property in Breedogue, County of Roscommon, Ireland, that he owned and that has belonged to the Keaveney family for hundreds of years.
The deed acknowledges that the property was to be held in trust by Devlin for Keaveney’s benefit, according to the complaint, that it was purchased with Keaveney’s funds, and that it would be transferred back to Keaveney at some point.
But Devlin allegedly put the property on the market without Keaveney’s authorization and in violation of the terms of the deed.
Keaveney accuses his partners of breaches of the operating agreement, fiduciary duty, and covenant of good faith and fair dealing; unjust enrichment; fraud; conversion of funds; and corporate waste.
Keaveney is demanding $5 million on most of the charges, $1,097,148 for alleged improper annual distributions, and $478,848 for alleged corporate waste. He is asking for an accounting of GC Warehouse’s finances, dissolution of the company or authority to buy out his partners, appointment of a receiver to wind up the affairs of the business, and an order restraining Devlin from selling the Ireland property.
Keaveney is represented by Manhattan attorneys Bill P. Chimos and Loryn P. Riggiola.
