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What you need to know for 07/26/2017

River Stone Manor co-owner accuses partner of mismanagement

River Stone Manor co-owner accuses partner of mismanagement

A co-owner of the scenic River Stone Manor in Glenville has accused his business partner of fraud, n

A co-owner of the scenic River Stone Manor in Glenville has accused his business partner of fraud, negligence, breach of contract and much more in a 27-page summons filed Monday in state Supreme Court, Schenectady County.

Thomas Monteparo and Angelo “Skip” Sgarlata are cousins and co-owners of the popular wedding and catering venue, but there’s not much family love going around these days. Monteparo says Sgarlata has not only forced him out of the business, but has been taking company money and property for his own personal use since the business started in 2003. He accused him of mismanaging the business, taking more than his fair share of company profits to throw personal parties, pay personal bills, and give discounts to family, friends and acquaintances.

The list of accusations continues for more than 20 pages, and appears to stem from the cousins’ decision in 2000 to go into business together as equal, 50-50 partners. The cousins agreed to purchase the historic riverside property at 1437 Amsterdam Road that year and transform it into a restaurant, banquet, lodging and waterfront operation. They sought financing the next year, which is where the trouble began.

Monteparo and Sgarlata accepted a loan from John Shinners and Sgarlata’s father, Carman S. Sgarlata. In order to receive additional financing through a bank and not have the loan appear as outstanding debt, they set up a limited liability corporation called River Stone Manor LLC. The cousins were issued 3,900 units each, with Sgarlata’s father receiving 1,400 units and Shinners receiving 800. The court papers allege that everyone agreed to transfer Shinners’ and the elder Sgarlata’s units after their loan was paid back so that the cousins eventually would be sole and equal owners of the company.

This premise — as agreed to in an October 2002 operating agreement — was deceitful from the get-go, Monteparo alleges. He accuses Sgarlata, his father and Shinners of making statements they knew at the time they wouldn’t follow through on so he would act.

“The conduct of the defendants was fraudulent, intentional, wrongful, willful, wanton and reckless,” the summons reads.

Sgarlata’s father died a year after the River Stone Manor opened for business in 2003. His ownership units then went to his wife, who died last year. The units have since been transferred to the Anna M. Sgarlata Irrevocable Trust, which is listed as a defendant in the summons along with Shinners.

Sgarlata denied any wrongdoing Thursday. When asked to comment on the long list of allegations, he said he had started to read through them a day earlier but the company had an event that got in the way of his finishing the list.

“This is a personal matter,” said Sgarlata. “It’s kind of like when a husband and wife break up. There are things that happen, and again, it’s a personal thing between me and him. For me to talk about my personal business with you is not something I feel I need to do.”

Monteparo did not return a call for comment Thursday. His attorney, Frank M. Putorti Jr., also did not return a call and email seeking comment.

Even though the River Stone Manor at one point had enough money to pay back the loans and remove Sgarlata’s father and Shinners as unit holders, Monteparo alleged in the summons that Sgarlata refused to initiate any payments.

“Due to mismanagement by the defendant, the funds may no longer be available to repay the loans,” the summons read.

In fact, he alleged, the business has suffered losses every year since it opened.

Sgarlata allegedly took more than his fair share of profits, salary and compensation over the years, paying himself bonuses and using company assets for his own personal use rather than paying company obligations. Sgarlata and the other defendants allegedly used company money for personal expenditures but deducted them on company books as business expenses.

Monteparo accused them of taking actions, making capital improvements and calling meetings without his consent. He said they called his contacts, countermanded his decisions and even intercepted his mail. He accused Sgarlata of restricting his access to company books, records and confidential information, and ordering staff not to talk to him or answer any of his questions.

When the cousins entered into business together, Monteparo brought his contracting experience and Sgarlata brought his catering experience to the table. But Monteparo said Sgarlata ignored his contracting advice, including ideas on maintenance, repair, construction and use of the buildings and grounds, among other things. Meanwhile, Sgarlata allegedly conducted catering business on behalf of the LLC, but withheld half of the catering revenue for himself.

Other allegations cite verbal abuse of employees by Sgarlata, who “degraded employees without just cause or provocation” and “acted in manner such that staff quits and morale is low.” This behavior allegedly resulted in the loss of several chefs, 16 to 18 event coordinators and other employees at the company’s expense.

In addition, Monteparo said that both he and Sgarlata took out a loan to help the company, but only Sgarlata’s loan was paid back.

Monteparo is asking for $1 million in compensatory damages and $250,000 in punitive damages, as well as the dissolution of the River Stone Manor LLC and access to all of the accounting and company bookkeeping he alleges has been denied to him.

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