Buffalo RiverWorks owners vie for ownership

Douglas Swift, the minority partner of RiverWorks, is suing majority owner and manager Earl A. Ketry, accusing him of violating their operating agreement by diluting Swift’s stake from 25% to 10.7% over the course of the last decade without consulting him or obtaining his consent, as required.

Swift accuses Ketry of bringing in six other partners without authorization, including other RiverWorks executives, and transferring 14 percent of Swift’s ownership to them.

Swift also raises questions about RiverWorks’ operations and Ketry’s financial management, citing “numerous transactions in excess of $100,000 flowing between the company’s accounts” and “millions of dollars in various “loans » to the company which were not corroborated by other documents. »

The lawsuit seeks unspecified damages and asks the court to undo the property transfers and reinstate Swift’s 25% ownership. The suit also seeks the removal of Ketry as the sole member of the steering committee and the appointment of Swift in his place.

The lawsuit does not explain the reasons for the year-to-year swings in stakes that are described in court documents. It also doesn’t say when Swift became aware of the changes. Swift could not be reached for comment.

Ketry declined to comment, saying he would “meet with my lawyer.” So I guess there should be something after that.

RiverWorks – which features a collection of large silos painted blue like a six-pack of Labatt beer – is a mixed-use hospitality business on Ganson Street, with a restaurant and sports bar, athletic facilities, banquet and event space , a boat dock and a concert hall. It hosts roller derby and other sporting events, concerts, special events and activities such as rock climbing, zip lines and a ropes course.

Its success sparked other developments along the river, on both sides along Ganson and Ohio Street. More recently, a Ferris wheel was added. Ketry also owns other businesses, including Pearl Street Grill & Brewery, Pearl Street Catering and Ales & Axes.

The lawsuit, which accuses Ketry of “unjust enrichment” and “breach of contract,” indicates that problems have been brewing behind the scenes for some time.

According to the lawsuit, Ketry and Swift were the original “members” of Buffalo RiverWorks, with Ketry owning 75 percent of the company and Swift 25 percent. Swift invested $1.66 million between September 2013 and December 2014, and added another $400,000 in 2015. Ketry has always been the sole member of the management committee, overseeing operations, financial records and tax filings. .

The lawsuit says the operating agreement does not permit new members to join the company, nor any reduction in a member’s ownership interest in the company, except by transferring the assets of an existing member. Swift “never sold, surrendered, abandoned, resigned or otherwise disposed of” any of her interests, nor consented to new members or any changes in her holdings, the suit states. And that operating agreement was never amended, the suit adds.

But the lawsuit claims Swift’s stake was diluted as others obtained stakes.

They include William P. Casale of North Tonawanda, Drew and Rosemary Gedra of Orchard Park, James M. Wadsworth of Buffalo, Frederick Boeheim of Williamsville, Kevin S. Glovack of Niagara Falls and Sean Green of Williamsville – who are all also named as defendants in the lawsuit.

The lawsuit claims that beginning in 2014, the membership breakdown changed, with the year-end tax return showing Ketry owning 67% and Swift 20%. The Gedras held 11.12%, Casale 1% and Wadsworth 0.88%.

“Based on the tax filings, between January 1, 2014 and December 31, 2014, Ketry attempted to transfer 5 percent of the company’s stock to Swift without authorization,” the lawsuit states.

A year later, Ketry was back up to 72.1%, but Swift was down to 16.1%. The Gedras held 9.03%, while Casale and Boeheim each had 1% and Wadsworth 0.77%. At the end of 2016, Ketry held 74.4% and Swift 14.15%, with the others sharing the rest. And by December 2017, Ketry’s stake had increased to 77.05%, while Swift’s had fallen to 10.95%.

After remaining stable for two years, Glovack rejoined in 2020. Ketry was up at 78.02%, while Swift was down at 10.225%. Finally, in 2021, Ketry’s stake fell to 75.5%. But Swift’s was still just under 11%. And Green now held 0.5%. There was no change in 2022, the most recent year for which a return was filed, according to the lawsuit.