Borenstein: Seeno v. Seeno becoming building empire’s ‘War of the Roses’

As Albert D. Seeno III seeks to strike a deal with Concord officials to lead the Bay Area’s largest development project, his father is trying to fire him as CEO of five companies in the family’s building empire.

In a stunning public airing of the internal fight for control of the businesses, Albert D. Seeno Jr., 78, has sued his son alleging that Seeno III, after his appointment in July 2020 as chief executive officer, improperly spent money and tried to shut out his father and uncle from their own companies.

While this court battle may seem like an internal business and family dispute, the allegations about Seeno III’s behavior and finances should concern members of the Concord City Council as they consider whether to partner with him for 40 years to develop the Concord Naval Weapons Station site.

Seeno Jr. says his son previously had taken hundreds of millions of dollars without permission from his father and his father’s companies, has debt of over $100 million, bullied his father to hire him as CEO under threat that he would otherwise never see his grandchildren, and has been abusive and misogynistic toward employees.

“Your anger is out of control, you need anger management, counseling and medication. The way you treated multiple … employees is unlawfull (sic), malicious, vindictive, mean spirited and outright wrong,” the father says in a handwritten note to his son contained in the court file.

“Have you asked yourself what would Jesus do? Are you choosing to follow God or have you been blinded by Satan?”

Seeno III, 48, in his legal filings, denies that his father was bullied into signing the employment contract and disputes that Seeno Jr. was inadequately represented by an attorney. The son says claims that he is diverting money, mismanaging workers and construction jobs, concealing documents and otherwise breaching obligations to his father’s companies are untrue.

Seeno III asserts that his father can’t fire him because his 20-year employment agreement is so airtight that he can only be terminated if he is convicted of a felony that exposes his father’s companies to “material criminal liability.”

Three related lawsuits are pending in Contra Costa Superior Court. In the main one, Seeno Jr. tries to regain control of his companies. In another, Seeno III accuses his father of trying to disrupt the operations of the son’s separately owned business, the firm seeking the development deal for the weapons station.

And in the third legal case, Seeno III has sued the trustee of the trust his parents set up for him in 2000, claiming that millions of dollars he was supposed to receive last year have been improperly diverted without his permission to paying down his debts to his father.

As the court battles wage, Seeno III’s company has obtained a temporary restraining order against his father that requires the elder to keep at least five yards away from one of the firm’s employees.

Meanwhile, Seeno Jr. has taken back control of his companies’ bank accounts, cutting off his son’s check-signing authority and company credit cards. Seeno Jr. is demanding from his son supporting documentation before signing off on bill payments. Seeno III says he has provided that information to prevent “operational collapse” of his father’s firms and his own.

Weapons station deal

The City Council, in a special meeting Saturday, is set to decide whether to continue to the next phase of negotiations with a consortium that includes Seeno III for development of the weapons station.

The consortium previously had only 3-2 support on the five-member council. The upcoming meeting is the first on the topic since the Nov. 8 elections in which one of those supporters lost his reelection bid.

Discovery Builders, the firm solely owned by Seeno III, has a 45% interest in the consortium, Concord First Partners. The other partners are a subsidiary of the Southern California development firm Lewis Group of Companies, which has a 45% interest and is the designated managing member, and California Capital & Investment Group, which has a 10% interest and is run by Phil Tagami, who is also seeking to build a controversial coal-export terminal in Oakland.

In 2021, the council chose the consortium over other prominent developers because it offered a more-lucrative deal for labor unions. But Concord First Partners later said it could not make the deal work financially and last year tried, unsuccessfully, to leverage major concessions from the city.

Now, Concord First Partners is trying again, this time seeking council approval of a radically revised deal for the 2,275-acre site that would include 16,474 homes, a 34% increase from the original terms agreed to when the consortium won the bidding over the other prospective developers.

The intrafamily legal battle should raise concerns for the council. Seeno III’s leadership of Discovery Builders is not in question in the litigation. But the court filings show how deeply tied his company is to his father’s five firms, from which Seeno Jr. is trying to oust his son. Moreover, it raises troubling questions about Seeno III’s management.

The council should not continue with Concord First Partners without first thoroughly investigating the allegations in, and financial implications of, the Seeno v. Seeno litigation. And if the council is willing to approve so many more homes for the same massive site, which completely changes the economic calculations, it should reopen the bidding for all interested developers.

Legal history

The city’s deal with the consortium was questionable from the start, given the Seeno family’s troubled legal past.

The Seeno business empire started with Albert D. Seeno Sr., who in 1938 began to build single-family houses. The construction business was passed to Seeno Jr. and his brother, Thomas Seeno, in the 1970s. And in 1997, Seeno III launched Discovery Builders.

The family has wielded great political power, especially in Pittsburg. In the early 1980s, a study by the local newspaper found that Seeno Sr. was the most influential person in the city.

In 1999, before voting on Seeno projects, then-Pittsburg Mayor Frank Aiello, with help from Seeno Jr. and a business associate, obtained a favorable home mortgage to buy a new Seeno house. Aiello also accepted from Seeno Jr. hotel lodging, a Raiders luxury suite ticket and a flight to Reno, Nev., on the developer’s private jet. The California Fair Political Practices Commission fined Aiello $20,000 for failing to report the three gifts and exceeding state gift limits.

In 2003, then-Pittsburg Councilman Frank Quesada was sentenced to 300 hours of community service after pleading no contest to conflict-of-interest charges stemming from his votes on Seeno Jr. projects while $370,000 in debt to the developer.

Meanwhile, the Seenos faced their own legal problems. In 2002, a Seeno Jr. company was fined $1 million for destroying endangered red-legged frog habitat in Pittsburg.

Two years later, the Nevada Gaming Control Board fined the Seenos, who own casinos there, $775,000 for not alerting the agency of their environmental violations and other issues.

In 2008, a Seeno Jr. company reached a $3 million settlement relating to improperly permitted grading at an Antioch development.

Then, in 2016, Seeno III pleaded guilty to bank fraud on behalf of his home sales company, Discovery Sales. As part of the plea deal, Seeno III was ordered to pay fines and restitution totaling $11 million.

Current cases

Until now, the Seenos’ publicly reported legal fights have been with outside parties. Now they are turning the battle inward.

At issue in the largest of the three current Contra Costa County cases is Seeno III’s management of five businesses headed by Seeno Jr. and Thomas Seeno. The brothers are the majority voting shareholders and only members of the boards of directors for the flagship Albert D. Seeno Construction Co., West Coast Home Builders and North Village Development. Seeno Jr. is the sole shareholder of Seecon Financial & Construction Co. and Seecon Built Homes.

When the brothers agreed in 2020 to make Seeno III CEO of the five companies, they struck a second deal that made Seeno III’s Discovery Builders the construction management firm for developments of the Seeno brothers’ five firms.

But the relationship quickly soured. Seeno Jr. alleges his son engaged in unauthorized transfer and sale of land, and authorized payment of employee bonuses, including a significant one to himself, without his father’s required approval.

Seeno III also blocked access to the companies’ books, records and computer systems and refused to allow his father to exercise his corporate-director duties required by state law, according to Seeno Jr.’s lawsuit.

It alleges that Seeno III’s “bizarre dictatorial control and secrecy” left his father and uncle, who have guaranteed bank loans related to the five companies, with unknown obligations and interfered with their duties to make disclosures to lending institutions.

The son denies he has blocked his father’s access to records. He says he has managed the day-to-day operations of his father’s firms for more than 20 years. Unless he remains at the helm of them and his separately owned company continues constructing homes for his father’s enterprises, Seeno III asserts, work will come to a halt, and job sites will be left in hazardous conditions.

Key employment agreement

Central to the litigation is the 2020 employment agreement’s provision that Seeno III can only be fired if he commits a felony affecting his father’s business.

Seeno III’s attorneys argue that the language of the agreement is clear and gives the son complete managerial control of the companies. Seeno Jr.’s attorneys claim the key provision does not override state law protecting the ability of the Seeno brothers, as company directors, to fire their CEO.

Seeno Jr. alleges that the attorneys who drafted the deal had a history of representing both Seeno III and the Seeno brothers’ companies but, unbeknownst to Seeno Jr., drafted the employment agreement at the direction of his son. The Seeno brothers say they were never represented by independent counsel.

Moreover, Seeno III coerced, intimidated and then bullied his father into the deal “by telling him that if he did not sign the Employment Agreement, Seeno (Jr.) would never see his three grandsons again,” Seeno Jr. alleges.

Seeno III’s attorneys’ response: “Of course, none of those allegations are true.”

Millions in debt

According to Seeno Jr., in the mid-2000s his son took hundreds of millions of dollars without permission from his father and his father’s companies. Seeno Jr. says his son initially denied what he had done but eventually acknowledged his deception. The father says his son still owes more than $100 million in principal and interest.

That debt is central to the litigation over the trust payments. The trust, which initially was funded more than two decades ago with $19 million, receives income from the Seeno family-controlled Peppermill Casino in Reno, Nev.

For over 15 years, according to the trustee, the primary purpose of the trust has been to pay down Seeno III’s debts to his creditors, including his father. The trustee’s attorney says Seeno III’s current debt to his father is approximately $160 million.

Seeno III says his debt to his father has been either paid off or paid down ahead of schedule and that the trustee has no right to divert his trust payments to his creditors. Seeno III says that for the last nine months of 2021 alone, the trust paid out $5.7 million that should have gone directly to him.

Judge Susanne Fenstermacher ruled in May that the trustee had not violated the terms of the trust. While the case proceeds, the judge has blocked further distributions. The next hearing is scheduled for March.

‘War of the Roses’

The legal battle in Contra Costa Superior Court threatens to turn into mutual self-destruction. “The Seeno Companies cannot endure a business version of ‘War of the Roses,’ ” Seeno Jr.’s attorneys warn in a court filing.

That could be a reference to the 15^th century series of civil wars over control of the English throne or the 1989 dark comedy movie in which a divorcing couple played by Michael Douglas and Kathleen Turner end up dead in their fight over their cherished house.

Rather than a battlefield in Europe or a fictitious East Coast home, the scene of the Seeno intrafamily fight is 4021 Port Chicago Highway in Concord, the office building that houses the father’s and son’s businesses, that Seeno Jr.’s entities own and from which he is trying to evict Seeno III’s Discovery Builders.

The employees of the father’s and son’s companies are victims of, or soldiers in, this war.

In court documents, Seeno III accuses his father of violent and erratic behavior. Discovery Builders obtained the restraining order after Seeno Jr. allegedly grabbed and tried to remove an employee with HR responsibilities from his office by force. The employee says that resulted in a scratch and a bruise on his arm.

The next day, Seeno III alleges, two men who worked for his father broke into the HR employee’s office by dropping in through the ceiling tiles, then removing the door to the office and stealing his computer.

Seeno Jr. says he never grabbed the worker. And, “I can assure the court that I do not have employees who dropped through the ceiling tiles of (the) … office like spies to remove his door; they removed the door from outside the office, not inside the office.”

Seeno Jr. says leaving his son as CEO “will cause grave damage to the Seeno Companies and their employees, who will be forced to suffer under the thumb of a tyrant who routinely abuses employees.”

In a court declaration, the Albert D. Seeno Construction Co. controller says that in 2019 Seeno III leveled misogynistic expletives at her when she carried out his father’s wishes to keep information about one of his companies confidential.

The chief financial officer of that company separately declares that Seeno III repeatedly threatened to fire him. Seeno III also allegedly hired an employee who had previously threatened the CFO’s life and then placed him in an office just down the hall.

It was “a clear act of retribution” for the CFO’s forensic accounting work at Seeno Jr.’s request, tracking down and confirming Seeno III’s taking of millions of dollars from his father, according to Seeno Jr.’s attorneys.

Who’s in charge?

The legal standoff leaves uncertain who is running the five Seeno Jr. entities.

On Sept. 16, Seeno Jr. sent an email to the employees of his companies telling them that he had resumed his position as CEO and that his son had been “relieved of all duties.”

Hours later, Seeno III sent an email telling workers that he was still in charge. “(P)lease disregard these messages being sent by ADS Jr. as ADS Jr. cannot terminate me nor is he the CEO of these entities.”

In October, Judge Jill Fannin rejected Seeno Jr.’s request for a preliminary injunction blocking his son from continuing to act as CEO. However, in December, Fannin rejected Seeno III’s request for an injunction essentially declaring him CEO and reinstating his access to the checking accounts and credit cards.

Case management conferences are scheduled for March in the litigation over control of Seeno Jr.’s companies and for Jan. 12 in Seeno III’s lawsuit accusing his father of trying to disrupt the operations of Discovery Builders.

With the cases unresolved and without an independent investigation of the allegations, the City Council should not commit to a 40-year deal with Seeno III and the Concord First Partners consortium.