Lawyers for the estranged co-owners of the Woodbury-based AriZona Iced Tea companies renewed their battle in State Supreme Court in Mineola Monday over the terms and timing of payments to buy out one of the businessmen.
On Oct. 14, state Supreme Court Justice Timothy Driscoll set a valuation on the company of about $2 billion as of October 2010. Co-founder Domenick Vultaggio of Sands Point attended Monday's hearing. The trial is designed to let AriZona liquidate the stake of the other co-founder, John Ferolito of Colts Neck, New Jersey, and a family trust. Ferolito and the trust own 50 percent of the company.
In his 25-minute argument, Ferolito's attorney, Nicholas Gravante Jr., pressed for an early payment and maintained that the company would have no problem raising funds.
"The court should enter an immediate judgment," he said. "This case must end." In a filing before the hearing, Gravante called for a payment of $140 million within 15 days of judgment, another $140 million within 60 days and the remainder within 90 days.
Anticipating arguments that AriZona is strapped for funds, Gravante said that the company's value has appreciated since 2010 and investors easily could be found to buy 15 percent of the company for $1 billion "and send Mr. Ferolito on his merry way."
Gravante also mocked AriZona's adherence to a low-price marketing policy and the fears executives voiced that raising prices would invite disaster.
"They're going out of business in 2020 because Mr. Vultaggio can't change 99 cents on a can to make it $1.20," he said in court.
Louis Solomon, the lead attorney for AriZona and Vultaggio, maintained that the company can't secure a loan to pay off Ferolito because it has no audited financials. Lenders are hesitant, he said, due to ongoing litigation.
Solomon also raised the specter that a rapid payoff could force the company to move.
If they have to move to New Jersey or Georgia, "no one's better off," he said, calling the court's valuation "too big for the company to swallow."
Even the company's head count was disputed in light of Driscoll's acknowledged efforts to ensure that a payoff won't put AriZona out of business and its employees out of work.
Vultaggio said AriZona has about 1,000 employees overall, including about 300 on Long Island. Gravante said the true number on Long Island is under 200.
Driscoll scheduled a follow-up hearing for Nov. 13.