Judge clears way for sale of Shell stations
An embattled partner in a Westchester company”™s $43.3-million acquisition of Shell service stations in the metropolitan area is appealing a state judge”™s recent order allowing his partners to sell their 3-year-old business without his consent.
Sammy Eljamal, a managing partner in Thornwood-based NY Fuel Holdings L.L.C. and its fuel distribution and dealer-station management subsidiaries, in court papers claimed a decision to sell the business required unanimous approval by him and the two partners seeking to sever their business ties with him, Leon Silverman and James A. Weil. A prominent commercial landlord in the county, Silverman is chairman of Silverman Realty Group Inc. in White Plains. Weil is a Scarsdale investor and the financial chief of the service-station enterprise.
Eljamal in 2011 sued in state Supreme Court in Westchester County to bar Silverman and Weil from removing him as third managing partner of NY Fuel Holdings and from seeking a buyer for the business.
Eljamal in 2010 was the only partner to personally guarantee a $24-million bank loan used in the Thornwood company”™s acquisition of 43 Shell service-station properties or leases in Westchester, New York City and Long Island. A long-time service-station owner and operator in the region who also owns a Thornwood fuel distributorship, Wholesale Fuels, Eljamal negotiated the partners”™ $43.3-million deal with Motiva Enterprises L.L.C., the Shell Oil Co. subsidiary, as Shell exited the retail gasoline business. He also personally guaranteed the terms of the purchase agreement with Motiva.
His partners last year notified Eljamal, who has right of first refusal in a sale, that they were offering all of the Shell properties for $25 million to a buyer who also would assume all company debt.
The partners”™ loan agreement with Manufacturers and Traders Trust Co. requires that Eljamal remain an active manager of the business to avoid default.
State Supreme Court Justice William J. Giacomo in January reaffirmed his order last year that temporarily prevents Silverman and Weil from removing Eljamal as manager. In addition to leaving him liable for the $24-milliion loan repayment, his removal, if later found to be improper, “would harm his reputation in the retail motor fuel business with major oil companies,” the judge said in his Jan. 23 decision.
When granting the preliminary injunction, the judge ordered Eljamal to post a $1 million undertaking with the court by March 1 to cover costs and damages for his opponents related to the injunction if it is later found invalid.
The judge, though, rejected Eljamal”™s claim that the sale of the business required a unanimous vote of the managers. The company”™s operating agreement requires only a majority vote of managers for the sale, Giacomo said.
Eljamal”™s attorney, Albert J. Pirro Jr., appealed that ruling this month to the state Appellate Division”™s Second Judicial Department.
In a separate lawsuit filed last year, Eljamal is seeking hundreds of millions of dollars in damages from Weil for libel and slander, claiming Weil”™s “campaign of lies” has harmed his business reputation and financing. That case is pending.
Silverman in another pending state lawsuit seeks to remove Eljamal as manager of several gas stations in Connecticut of which he is principal owner. In court papers filed in late January, Silverman”™s attorney, Marc S. Oxman, claimed Eljamal”™s continued mismanagement will “run the business into the ground.”