A co-owner of a Yonkers disaster recovery business claims that his partner diverted nearly $700,000 from Royal Restoration & Construction Inc.
Adam Halevah accused Eliran “Ron” Fanish of unjust enrichment, in a complaint filed on Oct. 27 in Westchester Supreme Court.
Halevah claims Fanish used company funds for personal expenses such as “overseas and domestic leisure travel, food and lodging, [and] thousands of dollars at ‘strip’ clubs in New York City.”
Fanish, of White Plains, and Halevah, of Woodcliff Lake, New Jersey, formed Royal Restoration in 2017. They operated as Rainbow International Westchester, under a franchise agreement with Neighborly Franchising, of Waco, Texas.
Royal Restoration cleans fire, flood, and mold damages, according to its website, as well as reconstructing damaged properties.
Halevah and Fanish each owned 100 shares in the company.
But throughout their partnership, Halevah alleges, Fanish diverted and misused company funds for projects unrelated to Royal Restoration’s business, and for personal credit card expenses.
Halevah repeatedly asked Fanish to reimburse the business for unauthorized expenditures, according to the complaint, and when that did not work he agreed to sell his company shares to Fanish for $500,000.
Now he claims that Fanish engaged in self-dealing that breached a fiduciary duty. He is asking the court to make Fanish pay at least $344,124, representing half of $688,248 in purportedly improper business expenditures.
Fanish did not respond to a message submitted through Rainbow’s website, asking for his response to the allegations.
Halevah is represented by White Plains attorneys Desmond C.B. Lyons and Thomas E. McShane, of the Harris Beach Murtha Cullina law firm.
