The bankruptcy court trustee for the shuttered Thatched Cottage catering hall in Centerport is seeking $4.5 million from former owner Ralph Colamussi, accusing him of funneling money to himself and his other failed business.
A complaint filed Dec. 29 on behalf of Thatched Cottage bankruptcy trustee R. Kenneth Barnard accuses Colamussi of fraudulently transferring at least $4.5 million in funds from Thatched Cottage to the Jellyfish restaurant without collateral or other guarantees. It also accuses him of making $763,185.61 in transfers to enrich himself, dating to 2008.
Colamussi owned the 21,000-square-foot venue for 26 years before filing for bankruptcy in January 2014. The once-popular waterside wedding and event venue on Route 25A has been boarded up for more than a year, surrounded by fencing and covered in tarps. In June 2015 the court converted the bankruptcy case from a Chapter 11 filing — which provides protection for reorganization — to a Chapter 7, or liquidation.StoryThatched Cottage back on the marketDeal with LI caterer may save wedding venueThatched Cottage sold to bidder for $4.65M
Nearly 200 people and businesses have filed about $15 million in claims against Thatched Cottage and its operating entity.
Colamussi is to appear in U.S. Bankruptcy Court in Central Islip March 29, according to a summons issued Jan. 6. He did not respond to requests for comment.
The complaint claims Colamussi arranged for transfers to the Jellyfish to be characterized as loans, despite knowing the business wasn’t making enough to repay Thatched Cottage and no formal loan agreements were evident.
The lack of formality for such transactions is unusual, said Burton Weston, a partner at Great Neck-based law firm Garfunkel Wild and chairman of its bankruptcy division.
“A loan will have terms and will have an interest factor,” said Weston, who reviewed the court filings but is not involved in the case. “If it’s a true loan transaction, there should be documents and security.”
The bankruptcy complaint states the money was used for utilities, construction, mortgage costs, furnishings and sound equipment at Jellyfish, a restaurant located next to Thatched Cottage that has been closed for months.
“During the six year period preceding the [original bankruptcy] filing date, Colamussi caused no less than $4.5 million ... to be diverted to paying such obligations,” the complaint states.
Barnard, based in Wantagh, has been trying to recoup money owed to the cottage and payoff its millions in debts. He declined to comment on the case.
The filing also accuses Colamussi of having a role in disrupting the sale’s closing to the original high-bidder, Hicksville-based Suzan Tina Properties.
It claims that Melville-based Galli Engineering was brought in without Barnard’s knowledge to assess the cottage, and then Colamussi delivered two reports on its condition to the Town of Huntington “to prevent the closing” of the sale.
The reports found, among other things, that the cottage’s main entryway was dangerous and unstable. “Due to the fact that the facility receives high amounts of occupants, injury and possible loss of life is a concern,” the August 2014 Galli report said.
Huntington officials received the reports from Colamussi Nov. 18, 2014, and condemned the building two days later. Suzan Tina had the sale closing scheduled for Nov. 24, 2014, but company officials have said the deal fell apart largely because of the condemnation.
The property is now owned by Bethpage Federal Credit Union, the second highest bidder in the bankruptcy sale which took possession after the sale to Suzan Tina collapsed. Bethpage officials issued a statement earlier this month saying it plans to sell the property.