A founding partner sacked by a Harrison home care company is suing the company and its CEO for $ 1.11 million – and is trying to regain his position as a shareholder.
William M. Costello alleges that Ronald M. Molloy, the chief executive officer of Curis Partners, exceeded his authority in firing Costello and stripping his shares in a complaint filed with the Westchester Supreme Court on February 17.
He asks the court to declare that the termination “has no force or effect” and that he “continues to be entitled to all rights, powers and compensation associated with the formation of a 25.1% founding member of Curis” .
Curis was founded in 2015 and specializes in the assessment and treatment of high risk patients in their homes.
The founding partners were Molloy from Stamford and Costello from Flushing, Queens, each with 25.1% of the shares. Molloy provided $ 32,000 and Costello, the chief operating officer, contributed $ 40,000 in capital. George Stivala, the chief medical officer of New Rochelle, and Scott Petersen, the chief information officer of Utah, each received 24.9% of the shares.
A few months later, Molloy gave 10% of its shares to John Foster, who contributed $ 50,000 to the partnership.
In 2019, according to the complaint, Molloy distributed $ 100,000 to Foster and $ 20,000 to himself without obtaining approval from partners holding a majority of the shares, as required by the operating agreement.
Costello disagreed.
Molloy said in an email to the partners that he asked Foster to invest in the company and that Foster never asked for or received any distributions or compensation.
The $ 100,000 was “fair and affordable,” Molloy said. “I haven’t asked any of you for input because you’ve given me control of the business to do what I think is right and fair.”
Costello claims he has been denied access to company records since August.
On December 8, Molloy announced Costello that he would be fired and released from the partnership at the end of the year. No justification was given.
Costello argues that Molloy has no power to unilaterally dispose of shareholders. In addition, employment and membership in the partnership are separate issues.
He had no employment contract, no duties, no set hours, no wages or salaries, and no wage taxes.
As a founding member, the complaint states, Costello received profit distributions, was listed as a member on Curis’ tax returns, and received an annual tax return for partnership K-1.
He was “only a full member”, it says in the complaint, “with a title”.
Molloy didn’t respond to an email asking for his side of the story.
Costello is asking the court to award him $ 1.11 million in damages. declare that he is an equity member with a 25.1% stake in the company; cancel the $ 100,000 distribution to Foster and half of the $ 20,000 distribution to Molloy; and allow him to review company records and conduct an audit.
Queens attorney Gilbert de Dios is representing Costello.
