Termination of NMYP president upheld

Judge said receiver running financially troubled company had right to fire Wayne Wahrsager
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Thursday, May 5, 2011

FREEPORT, N.Y.—A federal judge this week upheld the firing of Wayne Wahrsager from his job as president of New York Merchants Protective Co., Inc. (NYMP).

The date of the termination actually was April 15, the day that the court-appointed receiver now running the debt-ridden NYMP filed a letter with the court complaining that he had fired Wahrsager, but that he refused to leave.

However, the judge in his May 2 ruling has given Wahrsager until 5 p.m. on May 13 to vacate the premises of the alarm company, which is based here. The delay is so Wahrsager can separate another business he runs from the same location, Senior Care 911, which provides personal emergency response systems [PERS] to the elderly, from NYMP operations, Judge Denis Hurley said.

In the meantime, the judge ordered Wahrsager—whom the receiver characterized as a disruptive influence at NYMP—not to interfere with the company’s operations. “I find that the receiver will be significantly impeded in doing his job unless Wahrsager is directed to remain away from the work site during the pendency of the receivership,” the judge wrote.

Wahrsager, who has contended the receiver is grossly mismanaging his company, did not return a call by Security System News for comment by deadline for this story.

The judge’s ruling is the most recent twist in a civil lawsuit filed in U.S. District Court in New York by Bank of America on Jan. 5 of this year against NYMP. Bank of America charged NYMP with breach of contract regarding a $17.5 million loan. Bank of America said it was owed more than $19.2 million, and sought the appointment of a receiver to protect the assets of NYMP, a full-service alarm company serving New York and New Jersey and of which Wahrsager is a principal.

According to court records, Bank of America contends NYMP and others committed fraud “via the kiting of checks and overstating NYMP’s monthly revenue.”

Wahrsager has said he agreed in January to the appointment of the receiver, attorney Robert Friedman, to help resolve NYMP’s debt problems. But Wahrsager recently filed court documents accusing the receiver of causing “staggering waste and losses” over the last few months at NYMP, which has been in the Wahrsager family for more than 100 years, and asking the judge to curtail the receiver’s powers.

Wahrsager also asked the judge to stop the receiver from firing him because Wahrsager contends he is the one who has the knowledge and expertise to run NYMP. He told SSN that the receiver had changed the locks to his office door in late April in attempt to keep him out, but that Wahrsager took the door off its hinges and continued to come to work.

For his part, receiver Friedman has contended Wahrsager acted like he was still in charge of NYMP and refused to take directions from him or his agent, TRG Associates Inc.

A court hearing was held on the issue on April 27 and Hurley released his written ruling a few days later.

The judge found that Wahrsager’s contention that Friedman and TRG were running the company into the ground was “problematic at best” because the judge said information in the case thus far showed that “NYMP, with Wahrsager in charge, had essentially lethal financial and other problems before Friedman arrived on the scene.”

The judge also noted that the order outlining the powers of the receiver, which Wahrsager had agreed to, gave him the right to fire Wahrsager.

John Brady, principal of TRG Associates, declined to comment to SSN because of confidentiality agreements related to the case. Robert Ansell, attorney for Friedman, could not be reached for comment.

Wayne Wahrsager and NYMP also are defendants in another lawsuit Friedman filed against them Feb. 19 in the same federal court.

That breach of contract lawsuit also names NationWide Digital Monitoring Co., under its corporate name of NationWide Central Station Monitoring Corp., and Aaron Wahrsager, president of that company and Wayne Wahrsager’s son.

That lawsuit alleges the defendants transferred “a significant portion” of the assets of NYMP to NationWide to prevent Bank of America recovering upon its $17.5 million loan. The lawsuit further claims the defendants “intentionally sabotaged, and continue to sabotage to this day, the remaining business of NYMP” to thwart Bank of America and the receiver.

Aaron and Wayne Wahrsager deny those allegations.

Aaron Wahrsager also has told SSN that the lawsuit is not connected to a recent decision by gun manufacturer Smith & Wesson to terminate its licensing agreement with NationWide as of March 31.

Both Aaron and Wayne Wahrsager stressed that NationWide has no legal connection to NYMP and was not a guarantor of the loan.

However, Wahrsager has told SSN that he believes the lawsuits “muddied up the waters” regarding the licensing agreement.