The big-spending CEO of Modell’s Sporting Goods has little love for his brother’s widow — denying her cash while blowing $7 million in company profits on such personal luxuries as a $116,250 steak dinner, a lawsuit charges.
Abby Modell, whose husband, Michael Modell, died of Hodgkin’s disease in 2001, says her retail-mogul brother-in-law, Mitchell, has been nothing but selfish as trustee of his sibling’s estate.
“Mitchell’s complete want of understanding of his duties as a fiduciary is best summed up using his own words: ‘Mitchell Modell is Modell’s Sporting Goods, and Modell’s Sporting Goods is Mitchell Modell,’ ” the Upper East Side mom of three blistered in her suit, quoting the honcho’s recent deposition.
Her husband controlled 50 percent of the fourth-generation family business and left his stake in the company to his wife and children when he died, according to the Manhattan Surrogate’s Court case.
But Mitchell, 59, argues that the brothers made a handshake agreement before Michael passed away that he would get three times the amount of company profits that were to be doled out to Abby, 58.
The widow says the oral agreement is bogus and accuses Mitchell of charging $7 million in private expenses to his corporate credit card since 2001 — further depleting her take from the business.
The charges include $38,655 for a private jet to whisk Mitchell and his two sons to a Canadian fishing resort in 2007, a $103,000 family vacation in Barbados, $9,000 on massages at the Friars Club, the pricey meal at Morton’s steakhouse in Chicago, and $180,000 for a trophy belonging to the late Yankee catcher Thurman Munson, the lawsuit says.
After Michael died at age 48, Mitchell took his sibling’s place as CEO and also boosted his salary from $1.8 million to $6.275 million, according to court papers.
The Alpine, NJ, businessman’s “expenses” were so excessive over the years that the IRS audited Modell’s 2006 and 2007 tax returns and nixed almost $1.5 million for personal travel, meals and entertainment, the lawsuit says.
A recent, unrelated suit filed by a Modell’s competitor against Mitchell proves his “unsuitability to run the family business,” Abby’s lawyer said in recent court papers.
That suit, filed in February, involves Mitchell allegedly impersonating a Dick’s Sporting Goods executive to gain access to a Princeton store’s private operations.
Mitchell and Michael’s great-grandfather, a Hungarian immigrant named Morris founded the company in 1889. The sports mecca now has more than 150 stores nationwide.
Mitchell’s lawyer, Eve Markewich, told The Post, “Mr. Modell has done nothing but fulfill his obligations as CEO and trustee. We assume that if Abby insists on litigation in this matter, we will prevail.”