Not in Westchester County?
September 21, 2019Cart

Business

by Westchester County Business Journal
by WCBJ

UPDATE: Endico brothers fight over family food business

Image courtesy Ace Endico website.

Inheritors of the Endico enterprises, a prominent player in prepared foods for three generations, are fighting for control of the family business.

Felix Endico of Darien, Connecticut, sued his brother William Endico, of Armonk, July 18 in Westchester Supreme Court, claiming that company assets have been diverted. He is demanding $5 million and an accounting of transactions between UFS Industries Inc. – the family business – and his brother’s Ace Endico Corp.

William “diverted monies, assets, resources, customers and corporate opportunities from UFS to Ace (and himself),” Felix alleges, to “destroy UFS as Ace expands on its own into manufacturing deli-style salads and similar products that had always been manufactured by UFS.”

“He’s totally delusional,” William Endico responded. “It’s total slander. What he’s accusing me of is all untrue.”

UFS can be traced back to the brothers’ grandparents, Willie and Josie Endico, who opened a grocery store and a produce purveyor in the Bronx. It became known as Endico Potatoes Inc. after World War II, and was run by their father and two uncles.

The family acquired Sally Sherman Foods, a maker of potato salad and other deli salads, in the 1970s. Today, UFS Industries operates from a facility on MacQuesten Parkway in Mount Vernon.

William Endico left the family business in 1982, according to the lawsuit, and bought 60 percent of Ace Provisions, later renamed Ace Endico. It has grown into one of the largest independent food distributors in the region, from a facility in Brewster.

UFS had used Ace’s fleet to deliver products and had allowed Ace to resell its products, but there was no conflict of interest, according to the complaint, because William had no role in UFS management or operations.

That changed after their father, Michael Endico, UFS’ sole owner, died in 2010. In 2013, the brothers each inherited half of the family business.

William had been appointed executor of the estate and named himself chief executive officer of the company. He ran the family business while also leading Ace.

UFS has no board of directors, the complaint states, and William exercised unfettered control. Felix, who had worked for the business since 1979, was allegedly excluded from management and relegated to limited consulting services.

Felix accuses William of self-dealing, claiming that he is diminishing UFS’ value so that Ace can buy the assets at a significant discount.

He claims, for example, that his brother sells UFS products to Ace below costs, allowing Ace to resell them for a greater profit. Ace employees have been placed at UFS to allegedly steer UFS customers to Ace.

William has made “little or no efforts or investments to expand or diversify the UFS customer base or UFS sales,” the complaint states.

William Endico said the accusations are false. “It’s the opposite. My company has pumped money into Sally Sherman to keep it alive. Everything he put in that lawsuit is a lie.”

UFS’ financial records have allegedly been manipulated to conceal its true profitability and to hide William’s conduct. UFS funds have been transferred into and out of North Provisions Corp., a company William allegedly controls.

UFS bank statements are sent to William’s home instead of company offices, the lawsuit  states, to “conceal his diversion of UFS funds and assets, including one account believed to have held more than $1 million.”

UFS’ reported annual gross sales declined by at least $6 million, from 2012 to 2016, according to the complaint.

Felix charges William and Ace Endico with corporate waste, breach of fiduciary duty, unjust enrichment and unfair competition. UFS is named as a nominal defendant, but Felix also filed on behalf of UFS, as the only shareholder, he claims, who can protect its interests.

“It’s disheartening,” William Endico said, “because he is ruining my reputation. I have an impeccable reputation and I’ve built a heck of a company, and all these accusations are untrue.”

Felix is represented by Steven R. Schoenfeld and Steven P. DeRicco of DelBello Donnellan Weingarten Wise & Wiederkehr in White Plains.