A state appellate court has reversed a state Supreme Court judge”™s decision in Westchester County and dismissed defamation charges leveled by the ousted managing partner of Shell gas station businesses in the metropolitan area against a Scarsdale business partner.
The court decision ends one lawsuit in a bitter 3-year-old dispute, waged in court documents and private emails, between Westchester businessman and Purchase resident Sammy Eljamal, owner of Wholesale Fuels in Thornwood, and his partners in NY Fuel Holdings L.L.C. and Metro Dealer Stations L.L.C. With Eljamal as point man in the deal, the new partners in 2010 paid approximately $43.3 million to acquire 88 Shell gas station properties and leases in Westchester, Long Island and New York City.
Business relations soon unraveled between Eljamal and two other managing members of the gas station companies ”“ Leon Silverman, chairman of Silverman Realty Group Inc. in White Plains, and Scarsdale investor James A. Weil ”“ amid claims of gross mismanagement, predatory pricing and the alleged theft of more than $1 million in gas pump revenue by Eljamal.
Eljamal in 2011 went to state Supreme Court in White Plains and obtained an injunction to block his partners”™ moves to remove him as a managing member of their operations and seek a buyer for the business. Eljamal”™s attorneys argued his removal would put the partners in default on a $24 million bank loan for which only Eljamal was personally liable. They also claimed his removal if improper would harm his reputation in the retail motor fuel industry, in which Eljamal has been a long-time owner and operator of Mobil gas stations in the region and a fuel distributor through his Thornwood company.
Supreme Court Justice Bruce E. Tolbert in June 2012 lifted the court injunction after Eljamal failed to post a $1 million undertaking required by the judge to protect the partners”™ business interests while the case was pending. Eljamal subsequently was removed as managing member.
While waging that legal battle, Eljamal in 2011 filed a separate lawsuit against Weil, claiming he had waged a “campaign of lies” that harmed Eljamal”™s business reputation and financing. Eljamal was seeking $100 million in damages from Weil for slander and libel.
Supreme Court Justice Francesca Connolly last year denied Weil”™s motion to dismiss the defamation complaint because Eljamal failed to comply with court orders to provide relevant business documents to the defendant. Weil”™s attorneys at the White Plains firm of Oxman Tulis Kirkpatrick Whyatt & Geiger L.L.P. appealed the judge”™s decision.
In April, a four-judge panel in the state Appellate Division”™s Second Judicial Department reversed the judge”™s ruling in White Plains and dismissed Eljamal”™s complaint. The judges said that Weil”™s allegedly defamatory statements in emails were “privileged” and so immune from legal action because they were pertinent to the ongoing court case and were made to parties, attorneys or possible witnesses in the case.
Eljamal was ordered to pay Weil”™s various court fees, which amounted to $4,563.
The Supreme Court chamber in White Plains also has been a battleground for another business dispute between Eljamal and Silverman over control of eight Shell service stations in Fairfield County, Conn.
Two years before they closed on their New York deal with Shell, Eljamal and Silverman partnered in the Connecticut purchases that totaled approximately $19.9 million. A Silverman-owned company was landlord for two companies that leased the Connecticut stations, and supplied their fuel, whose majority owner was Eljamal. Silverman held a 5 percent stake in the businesses, according to court documents.
A New York judge last July ordered Eljamal replaced by Silverman as manager of the Connecticut businesses. Silverman, the plaintiff in the case, had claimed their operating agreement provided that he would be sole manager of their businesses if Eljamal defaulted on mortgage payments. Their company last year defaulted on an approximately $13.5 million acquisition loan.
Soon after the judge”™s ruling against him last summer, Eljamal removed approximately $863,000 from company bank accounts. Eljamal”™s attorney said he used the money to pay his income taxes.
Silverman is seeking to recover the money for his Connecticut businesses. This month he filed a second lawsuit against Eljamal asking the court to back his claim to full ownership of the companies in which Eljamal held a 95 percent stake.
