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September 23, 2019Cart

Business

by Fairfield County Business Journal
by FCBJ

Son sues parents for share of Irvington Builders Inc.

A son of the founder of Irvington Builders Inc. is suing his parents over his share of the construction and real estate development company.

Patrick J. Kennedy Jr. of Greenwich sued Patrick J. Kennedy Sr. and Ann Kennedy of Tarrytown on Jan. 24 in Westchester Supreme Court demanding an accounting of company assets.

His parents, he alleges, have the company “as a veritable piggy bank to lessen the financial burden of their extravagant lifestyles and irresponsible personal spending habits and gifts.”

The parents did not respond to voicemail requests for comment.

Kennedy Jr. learned the family business as a young man, doing odd jobs, cleaning up and plowing snow. In 2002, he withdrew from college to work full time for Irvington Builders.

He claims that his parents promised that he and his brother would inherit the company, in his case, as partial consideration for withdrawing from college and forgoing other career opportunities.

Then his parents began acquiring real estate, the complaint states, “at a significant cost and strain on Irvington Builders’ cash and assets.

He claims that his parents often convinced him to forgo a salary, so that the company could retain cash. Little did he know, the complaint states, “his parents and family members were siphoning company assets, including cash for their own personal gain, to his apparent exclusion.”

His parents had formed Crossroad Building Corp., and in 2004 they bought 5.6 acres in Ardsley for $1.2 million. The plan was to build 13 houses to sell “at a handsome profit.” But the Great Recession of 2008 stalled the project.

Kennedy Jr. claims he diversified the family business, and from 2002 to 2014, Irvington had its strongest growth and greatest profitability.

But his parents, he alleges, began liquidating Irvington’s real estate assets, depleting its cash and leveraging the company with high-interest debt.

“Due to their gross mismanagement,” he claims, “the reputation of Irvington Builders became tarnished and made it all but impossible to secure new construction and development projects.”

He formed IBI Contracting Corp. in 2009, according to the complaint filed by attorney Michael V. Caruso of Brewster, and he applied much of the profits of his construction and development company to helping Irvington and the Crossroad project.

“IBI,” the complaint states, “had ostensibly become the operating arm and bank funding (of) Irvington Builders and Crossroad.”

He said his parents rejected offers by Toll Brothers Inc. in 2014 and 2017 to buy the Crossroad project for nearly $4.7 million.

Since then, the complaint states, Kennedy Jr. has been “locked out of all affairs – financial or legal – affecting Crossroad and Irvington Builders.”

His parents, he claims, are trying to “strip or divest” him of his interest in the Crossroad project and he rejected an offer of $845,000 for his interests in the project.

Kennedy Jr. is demanding that Crossroad’s real estate be put in a trust and that his parents be restrained from selling, mortgaging or encumbering the property. He is asking for an accounting of Irvington’s and Crossroad’s finances, from when they were formed and including assets his parents allegedly diverted from the companies for their personal use.