MANHATTAN (CN) - A real estate manager treated his company as "his personal piggy bank" and looted it for more than $100 million, shareholders say in a derivative complaint. Rubin Schron first fattened his piggy bank in 2006, with $40 million that he claimed was repayment of a capital contribution from CAM-Elm Co., his family-owned business that's majority owner of plaintiff SMV Property Holdings, according to the complaint.
Schron took $66 million more in 2008 and 2009 to recoup money he lost in personal investments, including rate swaps with Citibank, shareholders say in New York County Court.
Schron's eight children were majority owners of CAM-Elm, giving them the right to remove their father from his position, but since they did not, the plaintiffs say, they are suing them too.
"Schron is not content with the substantial economic returns that he, his family, and his companies have legitimately earned. Instead, Schron has resorted to theft, improper accounting manipulation, and more, against those who trusted him and relied on him," the complaint states.
Shareholders say Schron had the brass to accuse plaintiffs Leonard Grunstein and Murray Forman of "stealing from the company," so they added a defamation charge to the claims of misappropriation.
The plaintiffs also include Mich II Holdings LLC and Seeva II Holdings LLC, suing on behalf of real estate companies SMV and SWC.
They sued Schron, his family and his companies CAM-Elm, Cammeby's and HSA Equipment, alleging misappropriation, breach of duty, breach of an agreement, unjust enrichment, and defamation.
The plaintiffs seek and accounting and $105 million in damages and want Schron booted from his position and new managers appointed
They are represented by Anthony Coles with DLA Piper.
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