In 1924, the Storek family purchased the three-story Storek office building in San Francisco. In 1969, son Glenn Storek bought a 50 percent interest in the building from family members. After Glenn’s father died, the other half of the building was owned by two family trusts.
In 1976, S&S Environmental, a Storek family enterprise, borrowed $186,364 from the Storek Building Fund, which was then controlled by Glenn and his father. From 1978 to 2005, widow Lorraine Storek was the trustee of both trusts. In 1986, Glenn borrowed $595,000 from Embarcadero Mortgage Co., using the Storek building as collateral.
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In 2005, Glenn’s brothers Craig and Richard took over as trustees of one of the trusts. They purportedly discovered “malfeasance and wrongdoing” by Glenn. Craig, Richard and Lorraine, who is now 92, filed a state court lawsuit against Glenn.
However, in 1991 Glenn had filed Chapter 7 bankruptcy. He was discharged of his debts at that time.
At Glenn’s request, in 2005 the U.S. Bankruptcy Court reopened his case because, he alleges, the lawsuit by his brothers and mother violates his 1992 bankruptcy court discharge. Brothers Craig and Richard allege Glenn concealed his wrongdoing for decades.
If you were the judge would you rule Glenn’s 1992 bankruptcy discharge included the “malfeasance and wrongdoing” alleged in the 2005 lawsuit against him?
The judge said yes!
The 2005 lawsuit against Glenn by Craig, Richard and Lorraine is essentially based on their same claims in his 1992 bankruptcy discharge, the judge explained.
“Litigating this family feud, which smacks of posturing in order to be better positioned for inheritance when the family matriarch dies, would be the province of the state courts except that Glenn had filed a Chapter 11 bankruptcy petition in early 1991 and the case had been converted to Chapter 7 later that year,” he continued.
Because this issue was already litigated in Glenn’s 1992 bankruptcy discharge, an injunction shall be issued barring further state court lawsuits on the discharged claim and assessing attorney fees against Lorraine, Craig and Richard, the U.S. Bankruptcy Court judge ruled.
Based on the 2007 U.S. Bankruptcy Court decision in In re Storek, 355 B.R. 187.
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