Sam Futterman is suing Joe Paul Futterman for nearly $3.2 million, claiming that his brother used assets from the family business to secretly back a separate company.
Sam sued Joe and JPF Realty Associates on April 21 in Westchester Supreme Court on behalf of himself and Kent Supply and Kenako Inc., the family”™s plumbing and industrial supplies business.
Joe Futterman used JPF, Kent and Kenako “to perpetuate fraud,” Sam Futterman, of North Carolina, claims.
Joe Futterman, of Westport, Connecticut, did not respond to an email to Kent Supply asking for his side of the story.
Kent plumbing supply was founded in 1933, according to a state Division of Corporations record, and was based in White Plains. Today, Kent Supply also does business in New Rochelle and Pleasantville.
When Bill Futterman died in 1990, his son, Sam, then 25, took over as manager and Joe, then 21, worked in a nonmanagerial position.
The brothers formalized their arrangement in 2004, reaffirming their 50-50 ownership interests and making Joe the president and sole manager.
The Kent Supply operating agreement allows its credit and assets to be used only for the benefit of Kent Supply, according to the lawsuit.
But beginning in 2004, Joe allegedly used Kent Supply assets as collateral for loans to JPF Realty, without Sam”™s knowledge or approval.
In 2012, for instance, JPF allegedly borrowed $760,000 from Chase Bank and used Kent Supply”™s property on Ferris Avenue in White Plains as collateral.
In 2013, according to the complaint, Kent Supply and Kenako borrowed $381,400 from Troop Realty Corp. so that JPF Realty could buy the property on Ferris Avenue.
In 2018, Kent Supply struck a deal with Allstate Capitol to sell property in New Rochelle for $3 million. Then Joe allegedly made a deal with Chase to use part of the money to pay off the JPF Realty loan.
When Allstate Capitol made an initial payment of $1,025,000, the complaint states, Joe asked Sam to contribute his half to Kent Supply, which needed money for operations. Joe allegedly pledged to do the same but instead diverted his share to himself or JPF Realty.
Sam claims he has asked many times to see the business records, but his brother has denied access.
Sam Futterman accuses Joe Futterman of unjust enrichment, breach of fiduciary duty and breach of contract. He is demanding an accounting of profits and losses and he is asking the court to appoint a receiver to protect his interests in the business.
Sam Futterman is represented by Manhattan attorney Ivan A. Saperstein.
