RE:TRUCK DRIVERS IN AUSTRALIA TO SHUT COUNTRY DOWN Descendants of trucking magnate Sidney B. Lifschultz who have been contesting his estate for 15 years are fighting now over its last asset.
David Lifschultz, a son, and Bruce S. Abbott, a grandson, are trying to sell Beaumere, a 4-acre waterfront property in Mamaroneck, for $16 million to pay off debts and to claim whatever is left over.
Lawrence Lifschultz, another son, is challenging the liquidation. He alleges in bankruptcy court filings that the estate owes him millions of dollars and that his brother and nephew have used estate assets as their “private piggy banks.”
Lifschultz Fast Freight Inc. was once one of the largest trucking companies in the country. It was founded in 1899 by Sidney’s father, a Russian immigrant who started with a rented horse and wagon in Chicago. Sidney assumed leadership of the company in the 1940s. He pioneered “railroad piggybacking,” in which tractor-trailers are loaded on flatbed rail cars.
In the 1980s he responded to trucking deregulation by sending more and more freight over the road rather than by rail. The company lost market share.
In 1987, Sidney and his son, David, filed a $1.8 billion lawsuit against the three largest trucking companies, accusing them, according to The New York Times, of conspiring for 25 years through bribery, fraud and other criminal activities to push him out of trucking. A federal judge eventually dismissed the case for lack of evidence.
Sidney moved the company into manufacturing, sold it and formed Genoil Inc. The publicly traded penny stock company sells technology that converts heavy crude oils to cleaner, more valuable light oils.
Sidney died in 2002, leaving his property to his sons, David and Lawrence, daughter Marcia Abbott, who has since died, and grandson Bruce Abbott.
Last summer, David and Bruce formed Lifschultz Estate Management LLC, transferred the Beaumere deed to the holding company and filed for Chapter 11 bankruptcy. The goal, according to an affidavit by Abbott, is to sell Beaumere and pay off debts.
Abbott described the property at 220 Hommocks Road in Mamaroneck, as “one of the most scenic waterfront locations in Westchester County.” Sidney acquired the property in 1957 and built the 11-room main house. The property is at the end of a secluded peninsula and spans nearly a quarter mile of waterfront with views of Long Island Sound and Larchmont Harbor. It comes with “an elegant gazebo, a deep-water dock, magnificent swimming pool with pool house, regulation size grass tennis court, gym and carriage house with four-plus garages,” according to Houlihan Lawrence in the real estate brokerage’s listing of Beaumere at $16 million.
Beaumere was mortgaged for $7.9 million after Sidney died and now the loan is held by U.S. Bank as a trustee. In 2009, the estate defaulted on the mortgage. A foreclosure case dragged on for years. Last June a state Supreme Court justice in Westchester ordered that the property be sold to pay the mortgage, which had grown to nearly $10.5 million.
That’s when the holding company was formed and the Beaumere deed was transferred, according to an affidavit by U.S. Bank attorney Nicole Schiavo. Three days before the property was to be auctioned, the holding company filed for bankruptcy, freezing foreclosure.
“There can be no dispute that this maneuver was a transparent attempt to further frustrate the Trust’s ability to enforce the judgment,” Schiavo says. The $16 million listing, she says, is highly inflated. An appraisal done for the bank in December valued Beaumere at $9.2 million.
The trucking magnate’s son Lawrence, however, says in an affidavit that he was once offered $17.5 million for Beaumere and could have sold it for as much as $19 million, but for his brother and nephew blocking the sale. He says that they have lived there rent-free for most of the 15 years since Sidney Lifschultz’s death. He has filed four claims in the bankruptcy case, totaling more than $35 million.
The town of Mamaroneck is claiming $106,786 in unpaid real estate taxes on the property. The estate says it owes the IRS $215,547 and New York state $117,987.
Last fall, an attorney for the holding company held out the possibility of paying creditors with Genoil profits. Genoil is based in Calgary, Alberta, and has an office in Manhattan. David Lifschultz is CEO, CFO and executive chairman. Bruce Abbott is president and COO.
According to its March quarterly financial statement, Genoil had accumulated an $89.8 million deficit. It had total assets of $653,932, zero revenue, a net loss of $1.2 million and a working capital deficiency of $2.9 million. “These factors indicate material uncertainties that cast significant doubt about the company’s ability to continue as a going concern,” according to the quarterly report
So creditors’ hopes of getting paid soon rest on Beaumere. A liquidation plan calls for selling the property by next February, and if that is not achieved, putting it up for public auction by the end of next April.