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Subject: Antonelli, Longtime Partner Feuding; Rubin Denies Accusations of
Date: Fri, 20 Nov 92 04:42:00 EST
Message-ID: <2.1992Nov20.044200@AmeriCast.com>

Antonelli, Longtime Partner Feuding; Rubin Denies Accusations of
Embezzlement<By Michelle Singletary<Washington Post Staff Writer=

A 20-year-old business relationship between local developers Do-
minic F.  Antonelli Jr. and Richard H. Rubin has turned sour,
with Antonelli accusing Rubin in court papers of embezzlement and
conspiracy to conceal the diversion of funds from their joint
partnerships.

 The two businessmen have both played prominent roles in the
Washington area real estate industry, building shopping centers
and other projects. They entered separate personal bankruptcy
proceedings last year in the wake of the commercial real estate
market's severe slump.

 Antonelli - who owns nearly half of Parking Management Inc., one
of the city's largest operators of parking lots and garages -
made his allegations against Rubin in documents filed late last
month in Antonelli's own bankruptcy case.

 A lawyer for Rubin categorically denied any wrongdoing by his
client, and said yesterday evening that he has not yet filed a
response in court.

 Antonelli made his accusations in response to claims filed by
Rubin that Antonelli owes him at least $5.6 million. Antonelli
asked the bankruptcy court to disallow those claims, alleging
that Rubin made unauthorized advances or loans from partnerships
jointly owned by the two of them. Antonelli claimed that Rubin
diverted the money for his personal use and for the use of
separate partnerships principally owned by Rubin.

 Many of their jointly owned partnerships "have been milked of
millions of dollars," Antonelli said in court papers. Because of
the alleged diversions by Rubin, he said, those partnerships can
not repay debts to lenders or other creditors.  Antonelli also
alleged that Rubin, through his Rockville-based Richard H.  Rubin
Management Corp., charged "excessive" management fees and expense
reimbursements for overseeing the day-to-day operations of their
jointly owned properties, which mostly consist of shopping
centers in the Washington area.  It was not clear from the docu-
ments when most of the alleged diversions of funds were supposed
to have occurred. In one specific example listed in the court pa-
pers, however, Antonelli said Rubin "fraudulently" diverted funds
from a Florida project called Palm Plaza between May 1990 and
September 1991. Rubin continues to manage more than a dozen of
the partnerships.

 "Rubin's wrongful acts and omissions, including his wrongful
misappropriation and diversion of funds belonging to Antonelli
and one or more of the Antonelli/Rubin Limited Partnerships, con-
stitute embezzlement," Antonelli said in the court documents.

 The documents also allege Rubin's management company, acting in
concert with Rubin, conspired to hide the fraudulent advances and
loans.

 Michael Canning, a New York lawyer with the law firm of Kelley,
Drye & Warren who is representing Rubin, declined to respond to
specific accusations by Antonelli, but said "we categorically
deny any allegations of fraud and embezzlement."

 Canning said the court documents containing the allegations were
only filed a few weeks ago, and thus he has not had time to file
a response in court. Canning would not comment further on the
case, except to point out that the allegations made by Antonelli
were filed as a way to object to the Rubin claims.

 The accusations by Antonelli are not criminal in nature, but be-
come part of his bankruptcy case, which is in its final stages.

 Rubin could not be reached at his Rockville office.  Antonelli
has refused to speak to reporters throughout his bankruptcy case,
and his lawyer said he was unavailable for comment.

 Antonelli and Rubin teamed up to develop, operate and own real
estate projects, principally shopping centers in Maryland, Vir-
ginia, Massachusetts and Florida, according to court documents.
During the last two decades, the two developers pooled and bor-
rowed funds to form 18 partnerships. Antonelli said in court he
invested $28 million in the joint projects.

 Rubin acted as the managing general partner of each of the
partnerships and managed the day-to-day operations either direct-
ly or indirectly though his management company. As managing
partner, Rubin had complete control over the ventures' cash and
other assets, as well as the books and records, according to the
court documents filed by Antonelli.

 According to sources familiar with both men, Rubin sought the
help of Antonelli in the early 1970s. "He needed financial mus-
cle," a source said. "Nick (Antonelli) bankrolled Rubin. Things
were good until both sustained financial reversals."

 The Antonelli and Rubin bankruptcy cases, both filed in Rock-
ville, are two of Maryland's largest and most complicated person-
al bankruptcy cases.

 Rubin has filed claims against Antonelli seeking $5.6 million on
behalf of himself, his management company and about 20 partner-
ships, Rubin's lawyer said. There are additional claims but the
dollar amounts have not yet been determined,  Canning said.

 Roger Frankel, an attorney with the Washington law firm Swidler
& Berlin who is representing Antonelli, said the developer is
seeking $8 million to $10 million from Rubin.  "Because this
matter is in litigation, we don't want to comment on it," Frankel
said.



Last week, U.S. Bankruptcy Judge Paul Mannes approved a plan
drawn up by Antonelli and his creditors that spells out how the
developer will repay his debts.  Creditors expect to collect $117
million in an orderly liquidation of assets.

 However, several creditors object to the plan and are appealing.

Rubin's bankruptcy case is still pending.  When he filed for ban-
kruptcy protection last year, Rubin listed secured debts of $4.3
million, and approximately $177 million in unsecured debts.<

02:04 11-20C9999-----

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