In re Fineberg, Bankruptcy No. 92-11857DAS
| Decision Date | 01 November 1996 |
| Docket Number | Adversary No. 96-0418DAS.,Bankruptcy No. 92-11857DAS |
| Citation | 202 BR 206 |
| Parties | In re Mark S. FINEBERG, Debtor. Arthur P. LIEBERSOHN, Trustee, Plaintiff, v. Sayed ALI, Alan Cooper, Eastern Public Adjusters, Inc., Albert Fineberg, La Jolla Acquisitions II, Earl Kreider, Norman Rubin, Silvio Salmieri, Special Life Underwriters, Inc., James Shiplett, Defendants, v. Mark S. FINEBERG, Dinah Fineberg, and DHF, Inc., Third-Party Defendants. |
| Court | U.S. Bankruptcy Court — Eastern District of Pennsylvania |
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Robert Szwajkos, Lavin, Coleman, Finarelli & Gray, Philadelphia, PA, for Debtor Dinah Fineberg and D.H.F., Inc.
Howard Sobel, Philadelphia, PA, Prior Counsel for Debtor.
Arthur P. Liebrsohn, Plaintiff-Trustee, Philadelphia, PA.
Michael Kaliner, Fairless Hills, PA, General Counsel for Trustee.
Marc A. Zaid, Bala-Cynwyd, PA, Special Co-Counsel to Trustee.
Michael S. Lubline, Drescher, PA, Special Co-Counsel to Trustee.
Lawrence Corson, Philadelphia, PA, for Defendants Alan Cooper, Earl Kreider, Silvio Salmieri, James Shiplett and Eastern Public Adjusters, Inc.
Robert J. Hoelscher, Philadelphia, PA, for Defendant Norman Rubin.
Sayed Ali, LaJolla, CA, pro se.
Albert Fineberg, Pompano Beach, FL, pro se.
LaJolla Acquisitions II, LaJolla, CA, pro se.
Special Life Underwriters, Inc., Bryn Mawr, PA, pro se.
Frederic Baker, Ass't U.S. Trustee, Philadelphia, PA.
The instant proceeding ("the Proceeding") represents a unique and ingenious effort by MARK S. FINEBERG ("the Debtor") to transform the seemingly worthless remains of LA JOLLA ACQUISITIONS II ("the Partnership"), an unsuccessful realty partnership of which the Debtor was an "organizing partner" and its accountant, into a significant monetary recovery from several of the presumably financially liquid investors ("the Participating Partners") of the Partnership, based mainly upon the tax deductions taken by the Participating Partners. Despite his enlistment of a former adversary, ARTHUR P. LIEBERSOHN, ESQUIRE ("the Trustee"), the Trustee in the Debtor's Chapter 7 case, which was originally closed in 1994, to his cause as plaintiff in the Proceeding, we find the Debtor to be disingenuous as well as ingenious in his efforts. We therefore find insufficient evidentiary basis to support most of his self-serving claims. We also find that the claims are barred on other grounds, including that all of the claims have not been timely asserted; are in part outside of the scope of our limited jurisdiction over the nondebtor Partnership's affairs; and are in part barred by dismissal of a related prior action and possibly judicial estoppel. Consequently, judgment will be entered against the Trustee, as well as in favor of the third-party defendants on the unproven third-party claims.
The parties executed the Partnership Agreement ("the Agreement") forming the Partnership on January 2, 1986. The "Organizing Partners" were Defendant SAYED ALI ("Ali") and his wife, Fatma Ali; Defendant NORMAN RUBIN, the Debtor's uncle; and the Debtor. The Debtor is a certified public accountant who at all times resided in the Philadelphia area. Ali was his associate in several of his other real estate transactions. The role of Rubin, also a Philadelphiaarea resident, was to solicit other investors from the Philadelphia area.
The purpose of the Partnership was to acquire, own, operate, manage, maintain, lease, hold for investment and ultimately sell, exchange, or otherwise dispose of four residential properties supplied by the Organizing Partners, which were located in LaJolla, California. Rather than paraphrase the significant provisions of the Agreement, we quote extensively from its following relevant provisions:
The Partnership sold slightly more than thirteen (13) units at $40,000 per unit, totalling about $540,000. The Organizing Partners were credited with a total of $205,000 to their capital accounts based upon their contribution of the equity of the four residential properties owned and operated by the Partnership. The total value of the properties were agreed to be $1,340,000, subject to existing encumbrances totalling $1,135,000. The $205,000 equity was allocated at $75,834 to Ali, $75,833 to the Debtor, and $53,333 to Rubin.
The Agreement provided that net losses would be allocated by providing ninety-nine (99%) percent to the Participating Partners as a class, and one (1%) percent to the Organizing Partners as a class. The Agreement also provided, basically, that net profits be allocated seventy-five (75%) percent to the Participating Partners and twenty-five (25%) percent to the Organizing Partners. The Partnership in this way...
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