A member of a Pelham Manor real estate firm claims that his partners looted company assets and that it is no longer practicable to continue operating the business.
Andrei Klein is demanding $1 million and dissolution of Elm Associates L.P., in a March 28 complaint filed in Westchester Supreme Court against Rosalie Kravitz and the estate of Lester J. Kravitz.
“At least since 2016, the defendants have looted Elm’s assets,” the complaint states, and “have failed to turn over the partnership books and records such that the thefts, conversions and misappropriation of … millions of dollars of partnership assets have been done under cover of darkness.”
Rosalie Kravitz did not respond to emails asking for her side of the story. Lester Kravitz died in 2018.
Elm Associates was formed in 1981 by Lester Kravitz, Andrei Klein and Mark Klein to acquire and manage real estate. Mark Klein dropped out in 2007.
After Lester Kravitz died, his half of the partnership went to his wife, Rosalie, according to the complaint, and she took control of the financial records.
“With that access,” the complaint states, “she did not waste any time looting Elm for her own benefit.”
Klein claims, for instance, that the Kravitzes used Elm Associates to acquire an interest in Pelpark LLC, owner of a vacant property at 101 Wolfs Lane near the Pelham train station, despite no formal authorization by Elm or his consent as a partner.
The Kravitzes had an economic incentive to do so, Klein charges, because they personally owned 67% of Pelpark plus their half of the 33% that Elm owned, for a total interest of nearly 84%.
MatriArch Development, formed by the Kravitzes, has proposed an apartment-retail complex for the site.
Klein also alleges that Lester Kravitz had distributed hundreds of thousands of dollars to himself that he marked as loans that remain outstanding.
He accuses the Kravitzes of using corporate assets for personal purposes, such as paying for a Tesla automobile and paying expenses for unrelated entities owned or controlled by Rosalie Kravitz.
For at least five years, the complaint states, Elm Associates have never held a board meeting or abided by ordinary corporate formalities to keep shareholders apprised of the company’s affairs and finances.
Klein accused the Kravitzes of conversion of corporate assets, unjust enrichment, and breach of fiduciary duties. He is demanding the dissolution of the company, appointment of a receiver to close out its affairs, access to company records, an accounting of the finances, distribution of assets and disgorgement of “ill-gotten gains.”
He is represented by Armonk attorneys David Graff and Matthew J. Silverstein.
