Wednesday, April 22, 2009

Ahava Dairy

Lawsuit seeks control of plant KOSHER DAIRY: Owners say they were denied access to facility by Ahava


NEW BREMEN — A legal battle has begun over control of the kosher dairy plant on Route 812 in the town of New Bremen. FJB LLC and Toobro NY LLC, which began operating the Lewis County Dairy Corp. plant in March, last week filed a lawsuit in state Supreme Court claiming they were unlawfully evicted from the plant by Ahava of California. However, Albany attorney Jeffrey S. Baker, who is representing FJB and Toobro, said the action shouldn't affect the approximately 50 people who work at the kosher plant, which produces bottled milk, cheese, yogurt and ice cream that are sold in New York City.

"This is essentially a fight over who has management control," Mr. Baker said. "It's not the intention of my clients to put people out of work or affect the local dairy industry."
Toobro, owned by Menachem and Schneur Bistritzky, in February purchased the assets of Ahava Entities, including the New Bremen facility and a kosher plant on Main Street in Ogdensburg, through two financial institutions that had liens on Ahava through Chapter 7 bankruptcy of that company's owner, Moise A. Banayan. The Ogdensburg plant is not involved in the current dispute. The Bistritzkys, who also own FJB, also received 20 trade names and trademarks in the deal, according to their lawsuit.

However, the suit claims Mr. Banayan "fraudulently transferred" many assets to other companies under his control and that Ahava of California — operated by Mr. Banayan and his brother, Fariborz, but not included in the Ahava assets — occupied the New Bremen plant through a lease agreement with Lewis County Dairy from August 2007. Toobro reached a five-year agreement with Ahava of California to lease the New Bremen and Ogdensburg plants for $30,000 per month, plus property taxes and all other operating expenses, according to court documents. On June 28, New York City attorney Leo L. Esses, representing Ahava of California, by letter instructed plant employees not to allow access to the Bistritzkys, the lawsuit claims.
Mr. Esses couldn't be reached for comment Tuesday.

Toobro has since regained control of plant operations through a temporary court order, Mr. Baker said.
The lawsuit claims Toobro was not given notice of any alleged default in the lease agreement or evicted through proper procedure, despite the company having "invested significant funds into the dairy manufacturing and distributing business, including payment of rent." It also claims Ahava of California had "unauthorized dominion" over equipment, books and records owned by Toobro during the alleged eviction.
Toobro is seeking permanent restoration of control of the facility, reimbursement of lease payments during the alleged eviction period and damages for lost profits, depreciation of the value of kosher products and interference with business relationships.

The next court appearance before Judge Joseph D. McGuire was scheduled for July 30, but Mr. Baker said it has been switched to July 31 because the first date falls on Jewish holiday Tish'a B'Av.

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