Lawsuit by brother of Huntington caterer’s owner lays claim to stake in the establishment, possibly forestalling its purchase by Lowe’s.
The way Howard Silver views it, he played the role of a loving and supportive brother, a confidant to his younger sister, Rhona Silver — and he never asked for very much. He was her business partner, contributing magnanimously of his time and money to the Huntington Townhouse — a catering facility they once ran as a team, he said.
But Rhona Silver and her business partner, Barry Newman, and their attorney don’t see things that way. Rather, they say, that depiction is a version of the past that conveniently came together on Feb. 6 — the day Newsday reported a pending deal for home-improvement giant Lowe’s to purchase the Huntington Townhouse property.
In a court filing, the lawyer for Rhona Silver and Newman says her brother had never made statements about owning any part of the business until the pending sale came to light. “After sleeping on his alleged rights for two months short of 10 years, plaintiff [Howard Silver] woke up on Feb. 6, 2007, the day Newsday announced a $35 milllion dollar sale of the property.”
Howard Silver initiated a lawsuit the same day in State Supreme Court in Riverhead to establish his claim of ownership.
Howard Silver — described in Rhona Silver’s court filings as her “half brother” and a “violent tempered” businessman who loaned her money at rates that sometimes topped 100 percent — is using a handwritten note allegedly signed by his sister to stake his claim to the Townhouse business and its property.
His lawsuit now stands in the way of the Lowe’s deal — one that Rhona Silver and Newman say has been painstakingly negotiated and that is worth, according to documents filed on their behalf, $38.5 million. And the delay has placed them in difficult financial circumstances.
For the past 15 months, monthly expenses have averaged $435,249 higher than income — a negative cash flow of $14,508 a day, according to Newman’s statement. The Huntington Townhouse has returned more than $364,000 in deposits to clients whose events were canceled at the catering faciity, which is scheduled to shut its doors at the end of the month. Legal fees are estimated at $103,800, with $240,000 more expected for future litigation.
Rhona Silver and Newman have filed motions in State Supreme Court asking the judge to dismiss Howard Silver’s claim to the Townhouse land as well as the entire suit. In addition, they have filed a lawsuit against Howard Silver, saying his assertions in the case are false and his legal actions are a way to extort money from them.
But Howard Silver and his attorneys haven’t blinked. They continue to ask the court to affirm his interests in the Townhouse operation and property and, until the lawsuit is resolved, to appoint a trustee to oversee the business assets and land.
“We want the sale to go through,” said David Kaminsky, one of Howard Silver’s attorneys. “But we just want Howie to get his fair share.”
Each side has given drastically different explanations of just what Howard Silver’s “fair share” might be.
Howard Silver’s side
When Rhona Silver bought the Huntington Townhouse in 1997, Howard Silver said his sister paid a deposit and he helped find investors to finance the deal. He said Rhona Silver wrote a letter, affirming his 50 percent interest in the company operating the catering hall and the business entity that once held title ot the land.
Howard Silver, who had his own ticket-brokering business in Manhattan, Two on the Aisle, said he contributed “significant sums” of money to maintain the Huntington Townhouse business and property and worked for the catering facility for four years without demanding repayment. He said he trusted his sister, and she had continued to reassure him that he had a 50 percent stake in the business and property. “We were a solid team,” he said.
He said he did the accounting, made the photo arrangements for clients’ parties and dealt with the vendors. He put in money for maintenance and operating expenses and only occasionally received any of the money back. He said he let these actions slide.
“She’s my sister, my baby sister,” he said. “I didn’t want to do things to make her unhappy.” Howard Silver is 64; Rhona, 55.
But during the past year, there was a growing chilliness in their relationship, he said. He heard rumors of attempts to sell the Huntington Townhouse. She refused to tell him anything, he said, and stopped returning his calls and e-mails. And then, last month, he heard the news of the pending sale. He said he felt he had little alternative other than filing a lawsuit.
“This is something I’m not happy doing,” Howard Silver said.
Rhona Silver’s and Barry Newman’s side
Though nine years her senior, Howard Silver was no big brother figure to Rhona Silver, according to her account. She described him in an affidavit as a “troublemaker,” a wayward youth who had run-ins with the law and who moved out of her parents’ house when he was 16 or 17 “because he could not get along with anyone.”
He provided no money toward the purchase of the Townhouse and was an infrequent presence at the catering hall, she stated. His visits became less frequent — there were only two, according to one Townhouse employee account — after a 1999 arrest in which he was accused of threatening employees of a company contracted by the Townhouse.
The charges were ultimately dropped, according to Howard Silver’s lawyers, but the arrest and the subsequent bail hearing provided Rhona Silver’s and Newman’s attorney with a piece of evidence they deem critical to the current proceedings. In a transcript of a related 1999 hearing, Howard Silver and his attorney at the time told a federal judge that the ticket-brokering business was Howard Silver’s only asset.
When asked if he owned property, Howard Silver replied, “No.” And when asked who owned the Townhouse, he told the judge, “My sister.”
“His latest complaint is a remarkable turnabout from telling a federal magistrate that he doesn’t have any interest in the Townhouse and telling the investigatory authorities that he only has a ticket-broker as a business and he doesn’t own anything,” said Kevin McDonough, the attorney for Rhona Silver and Newman.
While Rhona Silver and the chief financial officer of several of her business entities acknowledge that Howard Silver put money into the Townhouse operations, they maintain that those were loans that were paid back with more than $1 million in interest at rates ranging from a low of 104.32 percent to “high infinity,” according to Tom Kellermann, the chief financial officer. Rhona Silver said she did not realize how much interest was being paid until she saw a spreadsheet of payments prepared by Kellermann.
As for the letter bearing her signature, Rhona Silver said, “I have no recollections of such a document and can’t tell whether it is in my handwriting,” Throughout her affidavit, she steadfastly insists that she has never discussed giving her brother any interest in her businesses.
The 1997 note in question states that her brother has 50 percent interest in profits and capital of two business entities — Silver Huntington Enterprises LLC, the name of the company operating the Huntington Townhouse, and Silver Huntington Realty, which once held title to the land. She has since transferred the property among three newer companies to obtain financing. And, through her attorney, said Howard Silver’s case is “baseless” and should be dismissed. Her attorney also argues if Howard Silver has any claim, it is not tied to the property but to the companies noted in the letter.
The sale of the Huntington Townhouse is due to close this month. A hearing is tentatively set for Friday in State Supreme Court in Riverhead to address motions in the case. The sale to Lowe’s awaits the outcome.