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Massachusetts Bankruptcy Court - Docket Report
Objection By Creditor Boston Redevelopment Authority To [271-1] Motion For Counsel Withdrawal of Saul A. Schapiro, The Attorney for the Boston Redevelopment Authority (BRA) on Grounds of Misrepresentation in Courts of Law by Thelma Barros, [271-2] Motion To Compel the BRA to Give the Two Million Dollars in seed Funds that was promised to the Mandela Residents Cooperative Association, Inc. flor the Pupose of a Limited Equity Cooperative and for the Preservation of Affordable Housing by Thelma Barros . (mem) [EOD 01/23/97] [96-10123]
Memorandum Of Decision Issued by: Kenner, J. Re: [271-1] Motion For Counsel Withdrawal ofSAul A. Schapiro, The Attorney for the Boston Redevelopment Authority (BRA) on Grounds of Misrepresentation in Courts of Law by Thelma Barros ***SEE MEMORANDUM OF DECISION DOC. #303 FOR COMPLETE TEXT*** (mem) [EOD 02/03/97] [96-10123]
Kenner, J. Order Denying [271-1] Motion For Counsel Withdrawal of Saul A. Schapiro, The Attorney for the Boston Redevelopment Authority (BRA) on Grounds of Misrepresentation in Courts of Law by Thelma Barros. THE MOTION FOR COUNSEL WITHDRAWAL OF SAUL A. SCHAPIRO IS DENIED. Entered on 2/3/97 (mem) [EOD 02/03/97] [96-10123]
Memorandum Of Decision Issued by: Kenner, J. Re: [275-1] Motion For Sanctions Against The Boston Redevelopment Authority by Mandela Residents Cooperative Ass'n. **SEE MEMORANDUM OF DECISION DOC. #305 FOR COMPLETE TEXT** (mem) [EOD 02/04/97] [96-10123]
Kenner, J. Order Denying [275-1] Motion For Sanctions Against The Boston Redevelopment Authority by Mandela Residents Cooperative Ass'n. THE MOTION FOR SANCTIONS AGAINST THE BRA IS DENIED. Entered on 2/3/97 (mem) [EOD 02/04/97] [96-10123]
UNITED STATES BANKRUPTCY COURT DISTRICT OF MASSACHUSETTES (EASTERN DIVISION)
IN REORGANIZATION NO: 96-10123-CJK
IN RE:
Mandela Residents Cooperative Association, Inc.
MOTION FOR COUNSEL WITHDRAWAL OF SAUL A. SCHAPIRO, THE ATTORNEY FOR THE BOSTON REDEVELPOMENT AUTHORITY (BRA) ON GROUNDS OF
MISREPRESENTATION IN COURTS OF LAW. ALSO. TO COMPELTHE BRA TO GIVE THE TWO MILLION DOLLARS IN SEED FUNDS THAT WAS PROMISED TO THE MANDELA RESIDENTS COOPERATIVE ASSOCIATION, INC. FOR THE PURPOSE OF A LIMITED EQUITY COOPERATIVE AND FOR THE PRESERVATION OF AFFORABLE HOUSING.
Respectfully represents the Mandela Residents Cooperative Association, Inc.
1. On December 11*, 1986, the board of directors of the BRA voted on and established the West Minister Willard Aflbrdability Fund with $200,000 cash on hand. Also, the BRA had settled its law suit against the Back Bay Restoration Company for purported violations of a development restriction agreement and received $777,858.
2. The $200,000 cash on hand and the $777,858 which equals a total amount of nearly $1,000,000 including interest, supposedly went into the West Minister Affordability Fund.
3. "In December, 1986, the BRA umlateralty established the West Minister Willard Affordability Fund, to provide to a law income housing project, the moneys taken from the Back Bay Restoration Company, described in this complaint. To date, no money has been disbursed to Westminster Willard by the BRA". (Please See Exhibit #7; BBRC Vs. University Bank National Association. Case No: 90-11664-HAL).
4. In 1997, the total amount of the fund should exceed $2,000,000 (+/-) due to incurring interest rates.
5. During the BRA Board Meeting that took place on December 11th, 1986, Stephen Coyle, the former director of the BRA, stated that $200,000 had been deposited in the West Minister Willard Affordability Fund and believed that "the proceeds would mature to an amount in excess of $2.999,99V. (Please see Exhibit #2; the -word/or word transcript of the BRA Board Meeting on 12/11/1986).
6. In November, 1994, a professional private investigation company called Murphy & Driscoll Private Investigations, was hired to investigate the West Minister Willard fund. Joe Murphy, private investigator, stated in a November 8th, 1994 letter that he found "no reference to any use of the $200,000 fund established in 1986 ". In other words, it never existed. (Please see Exhibit #3, Joe Murphy's letter, dated 11/8/1994).
1. On November 8th, 1994, V&M Management, in the course of attempting to determine where the funds were, reviewed all of the BRA files and could find no documents indicating where any of the money went.
8. On November 14th, 1994, the BRA responded to V&M Management and the Mandela Residents Cooperative Association, Inc. in a letter indicating that the money had been disbursed, and the fund no longer existed, but without providing any figures as to were the money went.
9. On June 6th, 1995, a representative of the BRA testified before the Committee on Planning and Economic Development of the Boston City Counsel and promised that the BRA would meet with the Mandela Residents Cooperative Association within ten days to proceed with the formation of the cooperative. The BRA failed and refused to meet with the Residents Association. Another meeting took place between the BRA and the same committee on June 29^, 1995, and again the BRA promised to meet the with the Residents Cooperative Association within ten days. Again, the BRA failed to meet with the Mandela Residents Cooperative Association, Inc.
10. The BRA is under an obligation to engage in good faith and fair and honest dealing with the Mandela Residents Cooperative Association, Inc. and is under an obligation to not make material misrepresentations to the Association. The actions of the BRA in representing the funds that were available for the purpose of the formation of a resident cooperative, and causing the parties to rely upon that representation, and then failing and refusing to disclose the non-existence of these funds, or the non-availability of the funds, or to take action in response to inquiries if the party for whom the funds are being held in trust, is an unfair practice within the meaning of Section 2 of c. 93 A
11. As a direct and proximate result of the breach of its duties and obligations under c. 93 A, the BRA has caused compensatory injury and harm to the Mandela Residents Cooperative Association, Inc.
12. In the case of the Mandela Residents Cooperative Association, Inc. and V&M Management Vs. Thomas Menino, Mayor of the City of Boston, Marisa Lago, Director of the BRA and the BRA (case #95-4063), Saul Schapiro misrepresented the court and the Judge, thus committing perjury, by claiming that the money was in fact allocated to the West Minister Willard Fund but was conditioned only to the sale of the property in 1986 by V&M Management to a private development company called Shamir Construction Company owned by Edmund Shamsi.
13. The deal with Edmund Shamsi never came to fruition due to unreasonable delay on the part of the BRA and ultimately resulted in Shamsi suing V&M Management. Therefore, the funds were no longer available to the Mandela Residents Cooperative Association, Inc. according to Saul Schapiro and the BRA.
14. Your Honor, Saul Schapiro lied to the court by acknowledging the Westminster-Willard Affordability Fund to have existed, when in fact it never existed. The money was never put into the Westminster Willard Affordability Fund nor is it true that the availability of the money was only conditioned to sale of the property to Edmund Shamsi.
15. On June 29th, 1988, Judge King ruled against Shamir Construction Company in the litigation it had brought against V&M Management, finding that both Shamir and V&M Management had acted reasonably, but that the BRA "was hostile to the proposed transfer of ownership and/or this reason imposed a number of onerous conditions," The court found that none of the 16 month delay could be attributed to the two parties, and went on to list a number of instances of delay which arose directly from the activities of the BRA (Please see exhibit #4; Transcript of the ruling).
16. Both V&M Management and Shamsi have agreed to convert the complex to a limited equity cooperative. Since either one of them could prevail in the litigation between each other, and since they both had agreed to a cooperative, the outcome of the litigation was irrelevant for BRA purposes. Thus, even if Shamsi had lost, and the contract became null and void, the BRA still had the commitment of V&M Management to fall back on.
17. Also, if the funds were no longer available due to the fall out of the Shamsi deal in 1986, why did Saul Schapiro continue to negotiate with V&M Management the establishment of a limited equity cooperative on behalf of the tenants for several years after 1986, not once mentioning that the limited equity cooperative was conditioned to the sale of the property to Edmund Shamsi?
18. On May 12th, 1988, the Board of Directors for the BRA approved a $25,000 grant from the Back Bay Restoration Settlement for the hiring of a consultant to oversee the development of a limited equity cooperative. The money was never received by the Mandela Residents Cooperative Association, Inc.. (please see exhibit #5; Letter from the BRA to Leroy Keihn, President of the Winter Hill Federal Savings Bank).
19. Saul Schapiro stated in a letter to Barry Haight, the Attorney for V&M Management, dated January 19*. 1989, that "the BRA is committed to facilitating the conversion of the property to a limited equity cooperative or a comparable entity. The terms of conversion must be such that the current residents are not displaced and the financial integrity of the project is maintained." In this letter, he dose not once mention the conversion of the property to a limited equity cooperative conditioned upon the sale of the property to Edmund Shamsi.fPlease see Exhibit #6, Saul Schapiro 's letter to Barry Haight dated 1/19/1989.)
20. In the summer of 1988, Saul Schapiro asked V&M Management and Barry Haight to drop a law suit they had against Stephen Coyle, the former director of the BRA and Peter Drier, who was the assistant director of the BRA. He stated to Barry Haight that "if the claims against Coyle and Drier as individuals were dropped, the BRA would negotiate in good faith with respects to V&M Management, Inc. proposal to convert the Mandela Development into a tenant owned limited equity cooperative."(For full disclosure, see Barry M. Haight's, Esq. Affidavit; Exhibit # 7)
21. In reliance on these representations, Barry Haight filed the requested dismissal on August 16th, 1988. Pursuant to Mr. Schapiro's request, the dismissal was with prejudice.
22. The BRA then rejected V&M Management's proposal and tried to put the property into receivership.
23. Saul Schapiro also misrepresented the Honorable Judge Kenner on April, I*, 1996 by stating that the tenants are protected even in the event of foreclosure. "Whoever awns that project is subject to the identical restrictions in terms of the purposes of the project, the income that can come out, the tax payments or whatever. The restrictions are no different for any party other than V&M as they are for V&M. And that's true whether the property is sold on the marketplace and it is true whether or not there's a foreclosure on the property. The nature of the project cannot chmse." (See Exhibit # 8; Saul Schapiro, word/or word transcript of the April 1st, 1996 hearing PG.239).
24. The court than responds by saying "Your saying essentially the tenants are in a win-win situation because the property has to be maintained as affordable housing? " (Judge Can-oil Kenner, 4/1/1996 Transcript, Pg. 239). Saul Schapiro then responds by saying "// has to be maintained in that capacity, exactly" (Saul Schapiro, 4/1/1996 Transcript, Pg. 239). (Again, see Exhibit ff-8)
25. In a letter written August 20th, 1985 by Kevin J. Morrison, the Assistant General Counsel for the BRA, to Paul L. Baccari, Esq., Mr. Morrison explains that "upon foreclosure under Section 16A of Chapter 121A, a successor in interest or purchaser has the option to be released from the "121A project" designation and acconSnslv the applicable benefits, restrictions and limitations within one year from its date of acquisition of the protect". (Please see exhibit # 9: Letter of Kevin Morrison to Paul Baccari dated 8/20/1985).
26. Your Honor, it is clear that if a successor has the right to remove himself from the 121A statute within one year, the tenants and the affordability of the project will not be protected, for it is the choice of the successor to do as he wishes with no restrictions from the BRA. This can ultimately result in the conversion to full market rent and the elimination of the Section 8 HAP contract, which in turn will destroy the affordability of the project for low income tenants.
27. Also, the Greater Boston Legal Services were hired to represent the Mandela
Residents in 1986 when Edmund Shamsi was interested in buying the project. A letter was written directly to the Chairman of the BRA, Robert Farrell, and it stated clearly that "the Section 8 HAP contract would be unenforceable in the event Mr. Shamsi's application is denied and one of the current mortgagees pursues {oTec\osurG"(Please see exhibit # 10; Letter from Greater Boston Legal Services to Robert Farrell, Chairman of the BRA, Dated October 22. 1986).
28. Your Honor, it is my belief that Saul Schapiro knew the correct statute concerning the 121 A and foreclosure in that the BRA admitted to Paul Baccari ,in 1985, the true nature of the 121 A statue concerning foreclosure. Also, the BRA was notified by Greater Boston Legal Services in 1986 as to the consequences and outcome of foreclosure relating to the 121 A statute. His statements are a complete misrepresentation to the court and it is also my belief that he purposely misrepresented the court in order for the BRA to accomplish its agenda, which is the displacement and gentrification of the current residents of Lower Roxbury.
29. The only reason why Mr. Schapiro continued to lead the Mandela residents and V&M Management to believe for so many years that tenant ownership would be a reality, is because of the substantial amount of legal fees that would be owed to him.
30. The BRA finally disclosed the breakdown of the Westminster-Willard Affordability Fund and stated that the total amount of legal fees incurred due to litigation totaled S241.118.73 and was paid to Saul Schapiro.
31. In the case ofMourad Vs. Drier, which was a personal slander law suit against Mr. Peter Drier, Saul Schapiro's legal fee amounted to $76.469.95. Saul Schapiro was paid directly from the Westminster-Willard Affordability Fund which is highly illegal. Mr. Drier's law suit had nothing to do with the BRA or the Mandela residents in that Mr. Drier was no longer employed by the BRA during the litigation and it was a personal law suit. Therefore, Saul Schapiro should have been paid personally by Mr. Drier and not from the West-Minister Affordability Fund.
32. Also, Saul Schapiro received $45,028.48 in the litigation against the Back Bay Restoration Company. The combined amount of these lesal fees total $362.617.16 and were taken out directly from the Westminster WWard AffordabUitv Fund for Saul Schaffira This is hishlv illesai in that the fund was allocated only for the Mandela residents. The BRA should have mad Saul Schapiro directly from their budget (For full disclosure see Exhibit #11)
33. Also, I believe that Saul Schapiro has incurred an additional $100,000 by putting V&M Management into Trusteeship and by dealing with the Chapter 11 Court. His total legal fee should be in excess of nearly $500,000 dollars by 1997, coming directly from the money that was supposed to be in the Westminster-Willard Affordability Fund.
Wherefore, Mandela Residents Cooperative Association, Inc. prays that this court:
1. Orders Saul Schapiro to withdraw as counsel to the BRA.
2. Enter an order that the money Saul Schapiro took for his legal fees from the Westminster-Willard Affordability Fund be returned to the Mandela Residents Cooperative Association, Inc., including back interest.
3. Upon a hearing, order the impoundment of $2,000,000 of the funds of the BRA.
4. Order an investigation and the accounting of all the funds held in the Westminster-Willard Affordability Fund by the United States Trustee.
5. Award the Mandela Residents Cooperative Association, Inc. a retainer for attorney fees for representation in the litigation against the BRA and attorney Saul Schapiro;
because it is quite evident that there is absolutely no protection being offered to the residents by the current trustee, Stephen Gray, in that the trustee is only concerned with himself and not the residents nor creditors.
6. Enter an order directing that the money judgment be placed in an escrow account to be maintained by the Mandela Residents Cooperative Association, Inc. and its attorney.
7. Disallow the Mandela Apartments to fall into foreclosure, for the residents will no longer be protected by the 121 a statute.
8. Award the Mandela Residents Cooperative Association, Inc. compensatory and
punitive damages from both, Saul Schapiro and the BRA-9, For such other relief as necessary and just.
Thelma Barns
President of Mandela Residents Cooperative Association, Inc. 1855 Washington Street, Boston, MA 02110 Apt 3E (617) 427-0355
Dated: January 13th, 1997
United States Bankruptcy Court District of Massachusetts (Eastern Division)
Reorganization IN
RE: NO: 96-10123-CJK
Mandela Residents Cooperative Association, Inc.
Certificate a/Service
I Thelma Barros, President of the Mandela Residents Cooperative Association, Inc., certify on this day, January 13th, 1996,1 served a motion for counsel withdrawal of Saul A. Schapiro and for the BRA to give the Two Million dollars in seed funds that was promised to the Mandela Residents Cooperative Association, Inc. to the following:
Saul A. Schapiro Rosenberg & Schapiro
44 School Street, Suite 800
Boston, MA 02110
Robert A. Carieo, Esq.
And Mary T. Cummings, Esq.
Commonwealth of Massachusetts
Department of Revenue, Room 808N
PO BOX 9688
100 Cambridge Street
Boston, MA 02114
Constantine Papademetriou, Esq. Special Assistant/Corporation Counsel City of Boston City Hall, Room 301
Boston, MA 02201
Eric Bradford, Esq. Office of the United States Trustee Thomas P. 0*Neill, Jr. Federal Building 10 Causeway Street, Roomi 184
Boston, MA 02222-1074
Paul D. Moore, Esq. John F. Ventola, Esq. Chafe, Hall &. Stewart 53 State Street
Boston, MA 02109-2891
Donald K. Stem, Esq.
United States Attorney
1003 John W. McCormack POCH
90 Devonshire Street
Boston, MA 02109
Also Cc: to
The Federal Bureau of Investigation (FBI) Mr. Kolaski, HUD Minister Louis Farrakhan Reverend James Luther Bevel
The Schiller Institute: Dennis Speed and Bill Ferguson GaryLeroy Author Goldsmith Victor Arranow The Boston Globe The Boston Herald South End News Bay State Banner The Tab
Associated Press Washington Post Washington Times LA Times New York Times CNN MSNBC Hard Copy 60 Minutes Dateline 48 Hours 20/20
Fox News 25 WCVB News Center 5 The I Team WBZ News Center 4 7 News WRKO am Radio
Thelma Barros
President of the Mandela Residents Cooperative
Association, Inc.
1855 Washington Street,
Boston. MA 02110 Apt 3E
(617)427-0355
Dated: January 13*, 1996