Appellate Court Reverses Ruling That Took Multi-Million Dollar Business From Guyana Immigrant
Guyana immigrant businesswoman says she never signed contract with money lender who "won" control of her companies through "wrongful" rulings
[Black Star News Exclusive]
Two years ago, a State Supreme Court Justice in King's County allowed a claimant to take control of a multi-million dollar business even though the defendant in the case said she had never signed a partnership agreement.
Now an appeals court has reversed the ruling and sent the case back to be heard by the lower court, The Black Star News has learned.
The New York State Supreme Court's Second Appellate Division agreed with Christine Persaud, a businesswoman and immigrant from Guyana, that Judge Arthur M. Schack erred in State Supreme Court King's county when he confirmed by default a disputed arbitration ruling that took away Persaud's multi-million dollar businesses.
Persaud said she had never signed a 50/50 partnership deal with a money lender named Abraham Klein, who had agreed to finance her payroll as she awaited receivables. She had founded Caring Homecare, a homecare nursing business, and other related companies, in 1997. She says her companies generated close to $11 million in annual revenue.
At some point, Persaud says, Klein surprised her with his claim that they had signed a partnership contract. What's more, he insisted they had agreed that all disputes be taken to an arbitrator named Marvin Neiman, of Neiman & Mairanz, P.C., even though Neiman had previously been Klein's own attorney, she says and the purported contract shows.
Persaud through another attorney, Eugene Levy, refused to appear before Neiman as arbitrator and sent him a letter rejecting his qualification and neutrality. (Later, another Persaud attorney, Samuel Rieff, submitted an affidavit dated April 20, 2009 stating that he represented her and Caring Home Care through the end of 2008, during which time she had never signed a partnership agreement, as claimed by Klein.)
Nevertheless a "proceeding" was held on March 19, 2009 in the absence of Persaud and her attorney, and Klein was awarded by Neiman, 100% control of Caring Homecare, even though he had claimed 50%; which claim itself Persaud had rejected saying no contract was signed. Additionally, Neiman awarded Klein more than $2 million in cash; records show that he had put $100,000 into the business in addition to financing for which he had retained 66% of proifts from the business. What's more, Klein was awarded 50% stake in another Persaud business, Liberty Homecare, even though he hadn't filed a claim against that business.
The Black Star News asked for Klein and his attorney Mendel Zilberberg to produce an original copy of the partnership agreement, without any success. Earlier, a forensics expert, Robert F. Bey, president of ALR Forensics had examined photocopies of three documents --not originals-- of what Klein claimed constituted the agreement with Persaud, compared the signatures with those provided by Persaud and in a report dated May 11, 2009, concluded that the "range of variation" in the signature on the documents "contains some significant differences" compared to Persaud's known handwriting.
Nevertheless, Klein moved to have the Neiman arbitration ruling confirmed in State Supreme Court in King's county. Before the hearing on April 17, 2009, before Judge Shack, Persaud's attorney filed for a postponement saying he had another case to handle in State Supreme Court in Queens on that same date. Judge Shack refused to grant an extension, ruling that Persaud's attorney's request was filed with mistakes, including a wrong caption and name of the judge in the other case.
So Judge Schack, in the absence of both Persaud and her attorney Levy, confirmed the disputed Neiman arbitration ruling. Persaud filed a motion for Judge Shack to vacate his ruling confirming the disputed arbitration ruling. Shack denied the motion.
The Black Star News sent a letter to Judge Schack asking if the judge had ever seen a copy of an original contract--the judge's clerk called this newspaper to confirm receiving the letter and said the judge declined to answer this newspaper's question.
Persaud was eventually ejected by Klein from the business she had founded. Additionally Klein filed liens against receivables due to Persaud's second business, Liberty Home Care, and in the following months seized tens of thousands of dollars, she says. Persaud, a single parent of three young children, said she feared she would be driven into the streets, and sought bankrupcty protection.
At the same time, Persaud through her attorney Stephen Preziosi, filed an appeal on May 3, 2010 to the Second Department, seeking a reversal of Judge Schack's refusal to vacate his confirmation of the Neiman award to Klein.
The court has now reversed Judge Schack's ruling. The appeals court also concluded that Persaud seemed to have a meritorious defense.
"On their motion to vacate the order, the appellants established the existence of a potentially meritorious defense," the appeals court decision reads, "inter alia, by submitting affidavits from the appellant Christine Persaud and her former attorney that she never entered into an agreement to arbitrate disputes...."
"We will be looking for Judge Schack to recuse himself from this case," Persaud has said.
In February, in what Persaud believes was related to her case, an intruder snuck into her building at home, kicked the door of her apartment viciously and fled--he did not know that he was captured on video camera.
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