On October 26, 2018, the Honorable Keith J. Cornell, Rockland County Surrogate, issued a Decision and Order granting a preliminary injunction sought by Keane & Beane, P.C., in an Accounting Proceeding. The injunction suspended two Trustees of five interrelated trusts from continuing to function as trustees of each of these trusts, effective immediately.
The application for injunctive relief sought to enjoin and restrain the two trustees from engaging in transactions among the five trusts and certain related business entities because of their conflicted loyalties, self-dealing and breaches of their fiduciary duties.
The Court, after due consideration of the motion, and a cross-motion by the suspended trustees which requested the Court to appoint a guardian ad litem for the petitioner in the Proceeding, granted the injunction and denied the cross-motion. It concluded that the moving respondent established that the two trustees did not properly exercise their duties as trustees of the five trusts because their personal and business interests conflicted with their duties as trustee. The Decision and Order cited examples of these conflicts, including the issuance of promissory notes from one of the trusts, as debtor, in favor of businesses in which one of the trustees was officer and a director, which notes were signed solely by the suspended trustee for the trust as debtor and the businesses as creditor subsequent to the issuance of an Order of the Court; payment of the suspended trustees’ personal legal fees, and court costs and expenses from one of the trusts, and charging the payments as debts against a second trust and various other instances of self-dealing, conflicts of interest and breaches of their fiduciary duties.
The Decision and Order concluded that the moving respondent had established the necessary criteria to be entitled to a preliminary injunction suspending the two trustees from continuing to act as such, including: (a) a likelihood of success on the merits of her and petitioners’ underlying claims; (b) a danger of irreparable harm to petitioner if injunctive relief was not granted; and (c) the balance of the equities in her and petitioners’ favor. A copy of the Court’s Decision and Order can be found below.
Edward F. Beane and Christopher Aventuro represented the firm in the Proceeding.