A longtime businessman in the region”™s gasoline industry is fighting in a state court in White Plains to regain control of a Connecticut service station business from which he removed more than $860,000 last month. The withdrawal came soon after a judge ordered him replaced as manager by the partner with whom he has been embroiled in dueling lawsuits over their metropolitan Shell station businesses for two years.
Sammy El Jamal, owner of Wholesale Fuel Distributors in Thornwood, and his Purchase attorney, Bruno V. Gioffre Jr., want to reargue the Connecticut case before state Supreme Court Justice Joan B. Lefkowitz and have El Jamal restored as manager while the case continues.
His legal opponents, meanwhile, want El Jamal cited for contempt of court for removing the company funds. Gioffre in a court filing said the money was used by his client to pay his personal income taxes.
The judge at a July 31 court hearing did not issue the temporary restraining order that would have given El Jamal managerial control three weeks after his removal. The next court session is scheduled Aug. 9.
Lefkowitz on July 9 ruled in favor of El Jamal”™s business partner, Leon Silverman, a commercial real estate landlord and investor based in White Plains, and named Silverman sole manager of two companies that lease and supply fuel to eight Shell service stations in Fairfield County. El Jamal owns 95 percent of the businesses, Connecticut Dealer Stations L.L.C. and Wholesale Fuel Distributors-CT L.L.C., and Silverman holds a 5 percent stake.
A Silverman-owned company is those two companies”™ landlord. Silverman and his investor group paid approximately $19.9 million in 2008 to acquire the stations from Shell”™s retail real estate arm as Shell began to sell off its service stations and exit the retail business.
The deal was put together by El Jamal, a gasoline retailer and wholesaler with 20 years in the industry. El Jamal also was point man and a minority owner in the $43.3 million acquisition in 2009 of 88 Shell stations in Westchester County, New York City and Long Island by an investor group led by Silverman and Scarsdale investor James A. Weil.
Their business relationship soon deteriorated. In 2011, Silverman and Weil acted to to remove El Jamal as managing member of their New York operations, claiming his mismanagement and frequent absences threatened their investment. El Jamal went to court to stop their effort and to prevent a possible sale of their Shell holdings.
A state Supreme Court judge last year ruled in favor of Silverman and Weil, who removed El Jamal as manager and moved their business headquarters from El Jamal”™s Thornwood office to a Silverman building in downtown White Plains.
In the Connecticut case, Silverman and White Plains attorney Marc S. Oxman claimed the operating agreement between Silverman and El Jamal provided that Silverman would become sole manager of their jointly held businesses if El Jamal defaulted on mortgage payments. They claimed that provision should take effect after their company last spring defaulted on an approximately $13.5 million acquisition loan that matured with GE Capital Solutions, leaving the company in financial jeopardy.
Judge Lefkowitz agreed and named Silverman sole manager of Connecticut Dealer Stations and Wholesale Fuel Distributors-CT.
Three days after the judge”™s ruling, El Jamal removed $863,000 from company accounts.
Seeking to reargue the case, El Jamal and Gioffre claim that Silverman was responsible for failing to refinance or pay off the mortgage on the service station properties he owns and leases to the companies in which El Jamal holds the majority interest.
El Jamal in an affidavit claimed he faithfully made monthly mortgage payments of more than $100,000 as required by their agreement in addition to monthly rental payments totaling approximately $3.3 million since the fallen-out partners struck their lease deal about five years ago.
El Jamal told the court the Shell businesses have been consistently profitable under his management. Silverman in his short time as manager has left business operations “in total chaos,” he said.
“The problem we have right now,” Gioffre told the Business Journal after their most recent court appearance, “is that you have the manager of a company that owns 5 percent of the company, and a person who”™s on the outs who owns 95 percent of the company. He (El Jamal) is worried that his company is going to be run into the ground.”
