• E-mail
• Print
• Comment
• Font Size
• Digg
• del.icio.us
• Discuss article

Family Problems Threaten Long Island Man's Gauge Company

Posted on: Sunday, 25 September 2005, 15:00 CDT

Sep. 26--In 1962, Joe Baumoel quit a top engineering job at Liquidometer, an aircraft instrument parts company in Long Island City, to start his own business.

Baumoel, with three children and what he remembers as a "very large" mortgage, began his new venture by working out of the basement of his Jericho home.

Today, the company that resulted from those efforts, Controlotron Corp. of Hauppauge, manufactures gauges that measure the level of liquids in pipelines, with 125 employees and annual sales of about $18 million. At 77, Baumoel is president of what he describes as a "very profitable" privately held company.

But he stands to lose it all.

A judge has ruled that he has violated the terms of a 2002 divorce agreement that called for sale of the business and a division of the proceeds with his former wife.

Last week, Baumoel was ordered to serve a 30-day jail sentence after the judge held that he was in contempt of court for failing to sell the company in an "expeditious" manner. Though he was to begin serving his sentence Friday, his attorney, Alexander Potruch of Garden City, obtained a temporary stay.

By all accounts, Baumoel is a savvy businessman who has built up a successful company that produced high-tech equipment that provided the pipeline industry with a way to measure the amount and flow of oil or other liquids. For years, the company performed well, opening overseas branches and bringing in millions of dollars in revenue.

In 2002, Baumoel and his wife of 50 years, Florence, divorced. But instead of rapidly satisfying the terms, Baumoel filed appeal after appeal in efforts to buy time to line up private financing that would satisfy the divorce agreement -- which would in turn allow him to hold on to the company.

How could it happen that a highly educated, respected and successful businessman, who in 1994 was one of nine Long Island executives named "Entrepreneurs of the Year" by the accounting firm Ernst & Young, reach the end of his career only to battle in court -- and even feud with his middle son, Douglas, once a Controlotron executive -- and face the prospect of jail?

Clearly, Baumoel's relationship with his son, a 49-year-old engineer, has suffered. Baumoel accuses him of "provoking" his ex-wife to push him out so the son could take over.

"He was the apple of my eye," Baumoel said in an interview, his own eyes filling with tears. "Then I saw him change."

Douglas Baumoel, a graduate of the Wharton School of the University of Pennsylvania who lives in Beverly, Mass., denies his father's allegations. "It's my biggest heartbreak that he actually believes that, about the conspiracy," the younger Baumoel said. "His governance of the company provoked my mother" to press for sale of the company.

Joe Baumoel, a diminutive man with a professorial air and seemingly boundless energy, has been stunned by the turn of events.

"I'm a bit of a reader," Baumoel said in an interview last week. "When I have time, I read a Greek tragedy. This has been to me nothing more or less than a Greek tragedy. You could see this terrible thing happening. I'm trying to prevent it from happening."

Florence Baumoel declined to be interviewed.

According to lawyers in the case, Controlotron may be sold to Siemens, the giant electronics company, for $25 million. Baumoel said he fears the sale could wind up relocating Controlotron, and its jobs on Long Island would be lost.

A spokesman for Siemens declined to comment.

In court Friday, Thomas J. Dargan, an attorney representing the receiver appointed by the court in 2004 to help sell Controlotron, told the judge that Baumoel's appeal "has had an effect" on attempts to sell Controlotron. He declined after court to elaborate.

But attorneys for Florence Baumoel, as well as a lawyer representing the receiver, point out that the divorce agreement ordered Baumoel to "expeditiously" sell the company.

His ex-wife's lawyers said that all Baumoel has done is file appeals -- including one as recently as Sept. 8 -- that, they insist, scare off prospective buyers who perceive that Baumoel will not really part with Controlotron.

Baumoel said he was not trying to block the sale, but rather to buy time so he can borrow money from a bank or another source, pay his wife, and keep the company. Under the divorce agreement, Baumoel is to give his former wife 50 percent of the net proceeds of the sale, her share capped at $5 million.

But his continued appeals led State Supreme Court Justice Robert A. Ross, presiding over the case in Mineola, to hold him in contempt.

Ross said Baumoel's most recent appeal was particularly irksome because it came "on the eve of the sale" to Siemens. The judge also cited "a continuing pattern" of delays in holding Baumoel in contempt.

In the courthouse Sept. 16, Baumoel had an awkward moment with his ex-wife during a break in court proceedings.

They greeted each other politely.

Then, as she continued walking down a hallway, Florence Baumoel said, over her shoulder, "It's time for you to retire."

"I'd love to," Baumoel said. "Why don't you let me? Want to talk about it?"

Florence Baumoel kept walking.

Joe Baumoel is now even barred by the receiver from walking into the company.

"It's tragic that someone apparently loses his company even though he is not dishonest, has not run the company into the ground and not defrauded anyone," Potruch said. "He is in trouble for not selling his company fast enough."

Or, as his ex-wife's attorneys see it, not at all.

"He's had since 2002 to sell this company on his own," said Stephen Gassman of Garden City, the attorney for Florence Baumoel. Gassman said that Joe Baumoel has been talking "for years" about securing a loan to pay his ex-wife. "I'm totally convinced that that is a ruse" so Baumoel can hang on to the company, Gassman said.

But what Baumoel and his attorney see as key to their case is that the court papers had set no specific date by which the sale had to be made. At the time of the divorce, Baumoel said, Controlotron had suffered losses, the result of the financial crises in Asia that reduced orders for U.S. goods, technology in particular. It was then in no position to be sold.

Now, Baumoel says, Controlotron is positioned for "enormous" growth in the next decade, having come up with new fuel gauge measuring products, and could possibly be sold one day for as much as $100 million.

Gassman dismissed Baumoel's claim that the company could fetch such an amount.

"We showed definitively that between 2002 and 2004, the company's financial condition spiraled downward, and under his tutelage it has continued to spiral downward," he said.

But Baumoel said that Controlotron is on the brink of technological breakthroughs, and he describes a system that he says could monitor pipelines around the world, keeping them safe from terrorists.

"If the company falls out of my hands, I can't continue my work," Baumoel said.

"My business is to save the company."

-----

To see more of Newsday, or to subscribe to the newspaper, go to http://www.newsday.com

Copyright (c) 2005, Newsday, Melville, N.Y.

Distributed by Knight Ridder/Tribune Business News.

For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail reprints@krtinfo.com.

Source: Newsday, Melville, N.Y.

More News in this Category