A silent partner in Eddie O’s Sports Memorabilia & Collectibles has become quite vocal about management of the Poughkeepsie business.
Todd Roberts has asked U.S. Bankruptcy Court to deny Edward P. O’Brien Jr.’s request to discharge an alleged $47,300 debt to Roberts.
“O’Brien failed to observe his fiduciary duties to Roberts by knowingly and intentionally seizing most of the valuable business inventory without compensating Roberts,” according to an adversary proceeding filed last month.
In reply to a request for O’Brien’s side of the story, bankruptcy attorney Gregory T. Dantzman stated that the allegations “are without any merit, as we expect the litigation will show.”
The two Poughkeepsie men formed Eddie O’s in December 2021, with O’Brien designated as the “public face of the business,” according to the operating agreement, and Roberts as “a silent partner.”
O’Brien contributed sports memorabilia valued at $54,000 for the start-up inventory, handled the day-to-day business, and held a 60% interest in the company.
Eddie O’s stocked more than 3,000 sports trading cards, signed jerseys, bobble heads, hockey sticks and hockey pucks, baseball hats, and more.
Roberts kicked in $36,000 for the first year of rent, later contributed $11,300 when the business needed cash, and held a 40% interest in the company.
O’Brien reported $8,866 in sales in 2022, according to the complaint, and $125,000 in purchases.
This past September, O’Brien filed for individual Chapter 7 bankruptcy protection, declaring $30,603 in personal assets and $84,656 in liabilities. He listed Eddie O’s as a co-debtor.
Assets consisted mostly of household goods, two vehicles and $12,000 in sports memorabilia.
He listed a credit for unknown amount for a possible claim “against his business partner for neglect, breach of fiduciary duties and waste or malfeasance.”
Liabilities included a dozen credit card and charge account debts. He acknowledged a $45,000 claim by Roberts but listed it as disputed. He also disclosed a $78,840 federal tax liability for Down to Earth Cleaning Services Inc., a Poughkeepsie business in which he holds a 51% interest.
Roberts claims that O’Brien did not keep detailed business records for Eddie O’s, failed to record all sales and expenditures, intentionally did not account for cash transactions, and took the most valuable inventory.
Therefore, his attorney, Lewis D. Wrobel, argues, he may not use bankruptcy to erase his debt because it was incurred “by fraud and defalcation while acting in a fiduciary capacity.”
