PORTLAND, Maine — Former Democratic gubernatorial candidate and Portland businesswoman Rosa Scarcelli is suing her stepfather and his company, in part because he refused to fire Scarcelli’s mother.
In her complaint, Scarcelli argues her mother — the defendant’s wife — should have been dispatched over her mismanagement of low-income housing developments that all three had stakes in.
Scarcelli is now asking U.S. District Judge George Z. Singal to confirm her place as 70 percent owner of GN Holdings LP and remove her stepfather, Karl Norberg, from his position as general partner of the company. The former gubernatorial hopeful is alleging that Norberg fabricated documents eliminating Scarcelli’s authority in the firm after she asked him to remove her mother from oversight of a slate of Maine housing projects.
Scarcelli’s mother, Pamela Gleichman, is listed as a party of interest in the case. Attorney George Marcus of the law firm Marcus, Clegg & Mistretta, whose firm is representing Norberg, Gleichman and GN Holdings, said his clients plan to respond and levy “some substantial counterclaims” in court by their March 5 deadline to do so.
“They dispute the allegations of the claim, and they intend to provide more detail when they respond,” Marcus said late Tuesday afternoon. “It’s a very sad circumstance. Pam and Karl are saddened by this suit brought against them by their daughter.”
Scarcelli’s attorney, Paul Driscoll of the Portland law firm Norman, Hanson & DeTroy, told the Bangor Daily News on Tuesday that he’s “not authorized to comment on any litigation.”
“I believe [the complaint] states what Ms. Scarcelli hopes to prove in the court case and she stands by her allegations,” he said.
In Scarcelli’s complaint — initially filed in January in Cumberland County Superior Court before being referred to federal court this month because the defendants reside in Illinois — she argues that Gleichman neglected to adequately maintain the low-income projects under her watch.
The lack of action on necessary repairs by Gleichman, Scarcelli claims, has left the developments in danger of being taken over and liquidated by U.S. Rural Development, the federal agency that provided funding for them.
Among the projects Scarcelli listed in the lawsuit as not being properly kept up under Gleichman’s oversight are Maple Tree Estates in Mapleton, Perramond Estates in Madawaska, Pittsfield Park Apartments in Pittsfield and Sara Pepper Place in Dixfield.
Details about the conditions of the properties are not included in the complaint. However, residents of Sara Pepper Place came forward during Scarcelli’s 2010 campaign for the Democratic gubernatorial nomination to complain about a chronically leaky roof at the site. At the time, the complaints were seen as marks against Stanford Management, which Scarcelli officially acquired from Gleichman and Norberg in 2007 and was responsible for repairs at Sara Pepper Place.
Scarcelli finished third in the Democratic primary, behind nominee Libby Mitchell and former Maine Attorney General Steve Rowe.
In her lawsuit, Scarcelli identifies Gleichman and her corporation, Gleichman & Co. Inc., as general partners in the listed low-income housing projects. She also names GN Holdings as the majority owner of the projects, placing Norberg, as general partner of that entity, in a position to cut Gleichman and her corporation from the partnership in charge of the projects.
But Scarcelli claims in her complaint that when she told Norberg she would exercise her rights as majority owner of GN Holdings and jettison him — if he refused to fire Gleichman first — he returned with documents suggesting Scarcelli never had any authority over GN Holdings.
Scarcelli alleges that in the 2006 agreement establishing GN Holdings, she obtained a 70 percent interest in the firm, while Norberg had 5 percent and was among three other part owners. After she threatened to remove Norberg in February 2011, Scarcelli says, he returned with an agreement document indicating he had a 95 percent interest and Gleichman had a 5 percent interest.
That agreement, according to Scarcelli’s complaint, was “fabricated by Karl Norberg and possibly others.”
Scarcelli is now asking the court to assert her place as the 70 percent owner and remove Norberg from the firm.
Marcus told the BDN “whatever rights [Scarcelli] had, she acquired by gift.”
“Apparently, that gift wasn’t enough,” he said.
Scarcelli’s lawsuit is not the first time her mother and stepfather have found themselves in the middle of a legal entanglement during their long careers developing low-income housing. Gleichman’s 25-unit elderly housing complex in Southwest Harbor was foreclosed upon by U.S. Rural Development in 2003 over $1.44 million in debt.
In 1994, Gleichman was reportedly barred from receiving funding from the Maine branch of Rural Development’s predecessor agency for three years over allegations that she falsified financial documents and drew down reserve accounts intended for her properties. The same federal agency threatened the more severe punishment of debarment of both Gleichman and Norberg over the case, but did not follow through. Gleichman countersued the agency, claiming she was the victim of a political vendetta.
In 1999, the Maine State Housing Authority sued Gleichman for defaulting on a $3.3 million loan provided by the authority for the development of the Lafayette Square Apartments in Portland. Norberg was a partner in that Congress Street project as well. The case was settled after 10 years, according to the Maine Center for Public Interest Reporting.