UPPER EAST SIDE — A Manhattan widow is steering her late husband’s luxury car dealership into financial trouble and driving its executives crazy, court papers charge.
Juliana Curran Terian, 58, grabbed the wheel of Rallye Auto Group after her husband, Peter Terian, died in 2002. But a trustee of her husband’s estate wants to put the brakes on her involvement in the Long Island company, claiming she’s unqualified and a risk to the business.
The trustee, Thomas Killeen, filed a petition against Juliana last year, accusing her of treating the dealership — worth more than $180 million — like a personal piggy bank and of doling out lucrative jobs to a friend and former husband.
“Without any legal right to do so, Mrs. Terian is interfering with the running of the business and causing harm to Rallye, requiring court intervention,” Killeen says in the petition in Manhattan Surrogate's Court.
However, Juliana, who lives on the Upper East Side, claims that the dealership owes her at least $8 million and that bad accounting has led to self-dealing by some employees.
Peter Terian co-founded Rallye in 1958, eventually selling Mercedes-Benz, BMW, Lexus and Acura vehicles at locations around Long Island. When Terian’s partner retired in 2000, he acquired an 89 percent stake in the dealership.
After Peter’s death, his stake eventually went into a trust that was created to benefit Juliana and their daughter. It was managed by three trustees — one of them being Juliana.
Immediately after her husband’s death, Juliana, a trained architect, slid into the driver’s seat, making herself the dealership’s president, manager and chairwoman, according to Killeen’s petition, which also requests Juliana’s removal as a trustee.
Killeen claims that her role was just to serve as a figurehead, and two longtime executives, Joseph Stanco and Nicholas Toomey, were running Rallye’s day-to-day operations. But Juliana allegedly began interfering in their decision-making.
“As Mrs. Terian became more and more enamored with the fact that the outside world knew her as the ‘face’ of Rallye, she actually started to believe that she was running the business,” Killeen says in a court filing.
In 2010 she made her newlywed husband, Bruce Gilbert, Rallye’s marketing director, paying him $300,000 a year, even though he had no relevant experience, Killeen claims.
She also forced Rallye to hire an unqualified friend to oversee an $8 million renovation of one dealership, according to Killeen’s court papers.
Killeen, who is a former lawyer for Rallye, also accuses Juliana of demanding cash from the dealership over the years, including asking for $4 million in 2010. The payouts forced the dealership to draw down various lines of credit and divert money from other expenses, he claims.
Killeen says her behavior eventually forced him and the third trustee, Rallye’s longtime accountant Robert Wurmbrand, to vote in January 2011 on a new operating agreement for the dealership, which removed Juliana as the manager.
Even then, she continued to refer to herself as the chairwoman of the company, Killeen’s says.
She is also accused of appearing at a Rallye showroom and disparaging Stanco and Toomey in front of their employees. Killeen claims that during the alleged tirade she vowed to “fight the good fight” and return to lead the dealership.
Juliana, who once owned a $20.5 million apartment in the Dakota, has also filed her own petition to remove Killeen and Wurmbrand as trustees and to reinstate her as the manager of Rallye.
She claims that Wurmbrand made egregious inaccuracies in the dealership’s accounting over the years. As a result, the dealership owes her at least $8 million and as much as $20 million, according to her petition.
She also says that she successfully ran the dealership from October 2002 until her ouster. The petition says the dealership weathered the recent financial crisis under her stewardship, setting revenue records in 2009 and 2010.
Her lawyers did not respond to a request for comment.
Killeen’s lawyers declined to comment.