One of the partners in a family’s New Rochelle commercial real estate empire has sued her sister for allegedly mismanaging the business and rewarding herself with excessive fees.
Michele Geller sued Lisa Rosenshein in Westchester Supreme Court on June 2 to recover millions of dollars in purported damages, on behalf of herself and the family companies.
Lisa Rosenshein has used entities she controls, the complaint states, “to shield herself from liability and to further enrich herself.”
Rosenshein did not immediately respond to a telephone message asking for her side of the story.
Bernard Rosenshein, who died in 2011, built and operated shopping centers and store fronts in New Rochelle, Brooklyn and the Bronx and owned and operated the Mamaroneck Beach and Yacht Club.
His daughters, Lisa, Michele and Julie — who is not a party to the lawsuit — inherited the family’s real estate companies, now based next to Palmer Center shopping center on Petersville Road, New Rochelle.
Lisa received majority control of five family affiliates that own the commercial properties. Michele and Julie received equal minority interests in the affiliates.
Lisa had been active in the family business while her father was alive, according to the complaint, and after his death she became the managing member of the affiliates and controlled them through entities she owns.
Michele claims that Lisa used her authority to charge nearly $2.7 million more than warranted, over a six year period, for management fees, partnership fees, overhead expenses and guarantee fees for herself.
Lisa received $4.5 million in distributions from one of the affiliates, to which she was not entitled, the complaint states, and failed to pay distributions to which her sisters were entitled.
The complaint states that financial records for one of the affiliates show an explained “payable” of $2.1 million to Lisa and an inappropriate debt of $2.5 million owed by the Mamaroneck Beach and Yacht Club.
Michelle claims she has repeatedly objected to Lisa’s conduct, and in response her sister has refused to adequately report the financial and operational health of the family companies.
Michele charged her sister with breach of fiduciary duty, breach of the operating agreement and unjust enrichment. She is asking the court to remove Lisa as manager of the family enterprises, order an accounting of the businesses, and award unspecified damages and restitution.
Michelle is represented by White Plains attorneys Russell M. Yankwitt and Cassandra M. Vogel.