Rao’s Owner Facing Power Struggle at His Specialty Foods Company

The owner of Rao’s — notoriously the toughest reservation in town and a den for the rich and famous  — is apparently having some control issues at his other Rao's branded business. The Post reports that Frank Pellegrino Sr. is suing Rao's Specialty Foods chief executive Sharon Straci for making major decisions without informing him or other shareholders. The suit claims that Straci is running it as her "personal fiefdom" — Pelligrino is not on the board of his own company.

In one instance, Pellegrino accuses Straci of turning down buyouts as high as $10 million without notifying the board or shareholders because it would mean she’d have to leave the company, according to the Post. Instead, she allegedly talked to a different buyer that offered less — but agreed to keep her as CEO. "Straci is acting to keep herself relevant and in power, even if doing so results in less value for the shareholders to whom she owes a fiduciary duty," according to the suit. Though Pelligrino does not sit on the board, he owns 37.5 percent of the company and created the recipes with his aunt Ann Rao. The suit is ongoing. Meanwhile, Straci’s attorney told the Post that the allegations are "untrue and unfounded."

• Rao’s owner can’t get a seat on the board of his own business [NYP]