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September 21, 2019Cart

Business

by Westchester County Business Journal
by WCBJ

Co-owner wants court to shut down Peter J. Riolo Real Estate

A co-owner of Peter J. Riolo Real Estate wants a court to shut down the corporation, claiming that his brother has mismanaged the family business.

Arthur G. Riolo petitioned Westchester Supreme Court on Aug. 5 for an order dissolving the company and appointing a receiver.

Since 1985, Peter J. Riolo Jr. has operated the business “without regard to corporate formality and in his own best interest,” the petition states, “ignoring any input from the other shareholders or needs of the corporation.”

Peter Riolo did not respond to an email requesting his side of the story.

The company, based in Hastings-on-Hudson, was founded in 1973 by Peter Riolo Sr. It brokers and manages real estate, focusing on the river towns.

Peter Jr. assumed majority control in 1985, when their father retired. He has 57 percent of the shares and is the president; Arthur has 41 percent and is the secretary; and two other family members have 1 percent each.

Arthur claims that Peter kept revenues from real estate management separate from the corporate operating account and used the funds at his sole discretion.

He says he has received the same salary for 40 years, while Peter has given himself annual increases.

When Peter became ill in 2016 and was unable to perform his duties for several months at a time over the next three years, Arthur says he took on his brother’s responsibilities. But he claims he was not compensated for the extra work, while Peter received full salary and a bonus.

For several years, Arthur says, he pressed his brother to pay better sales commissions, to remain competitive with other brokers. Peter changed the commissions in 2015, but allegedly applied the new rates to everyone but Arthur, “the highest producing agent … to remind petitioner that he was in control and would do as he pleased.”

Arthur claims his brother abused, manipulated and intimidated employees, “causing key and productive agents to leave the company.”

After demanding that the other shareholders surrender their car leases, as unnecessary corporate expense, Peter allegedly had the corporation lease a BMW for his personal use in 2015.

Arthur says his brother has refused to share information or review financial records at annual shareholder meetings.

When he confronted his brother about creating a succession plan, Peter allegedly responded that it was his intention to close the business when he retired.

Justice Gretchen Walsh had ordered all interested parties to show cause on Sept. 11 as to why Peter J. Riolo Inc. should not be dissolved.