PORTLAND, Maine — The attorneys representing Rosa Scarcelli’s mother and stepfather in a tangled family lawsuit and countersuit are asking to be let off the case after a dispute with the couple over payment.
Scarcelli responded that delays caused by a lawyer switch could further jeopardize a slate of low-income housing projects, with repairs long overdue and federal lenders growing impatient. Scarcelli, a Portland businesswoman and prominent Democrat, is arguing in federal court that her mother, Pamela Gleichman, mismanaged the properties and should be removed from authority over them.
Gleichman and her husband, Karl Norberg, along with Scarcelli, are stakeholders in the projects under dispute.
Attorneys Lee Bals and Daniel Rosenthal of the Portland law firm Marcus, Clegg & Mistretta filed a motion last week to withdraw as counsel for Gleichman, Norberg and Norberg’s development firm GN Holdings LP. A hearing with Magistrate Judge John H. Rich III on the topic is scheduled for Wednesday morning.
“A conflict has arisen … with respect to the terms of counsel’s agreement relating to representation of the Defendants GN Holdings, LP and Karl S. Norberg, and Party-of-Interest Pamela W. Gleichman and the financial terms under which that representation will continue,” wrote Bals and Rosenthal in an April 16 court filing.
In their motion, the attorneys ask the court to give Norberg and Gleichman 30 days from the court order, which could come Wednesday after the hearing, to find new lawyers.
But in a response filed last Thursday, Scarcelli’s attorneys — led by James Poliquin of the Portland firm Norman, Hanson & DeTroy — argued the low-income housing projects at the center of the legal battle will fall deeper into structural and financial trouble with every delay.
In a March 27 letter from the federal Rural Housing Service submitted to the court by Scarcelli, the agency threatens to begin foreclosure proceedings on one of the projects run by Gleichman if a trio of 1989 loans equaling more than $1.2 million are not paid back in full by April 27.
The letter, signed by Virginia Manuel, state director of rural development for the U.S. Department of Agriculture, states that the agency is demanding an accelerated payback in part because of Gleichman’s “failure to maintain the property in good repair.” Manuel additionally states that the federal agency agreed to two loan payment deferrals adding up to $275,000 over the past six years so the money could be used for repairs and capital improvements at the project in question, but that the work was not done.
“In light of the quickly deteriorating situation, a standstill in discovery or other activity for 30 days while decisions are made with respect to substitute counsel, if any, effectively means that basic discovery responses are at least two months away,” wrote Scarcelli’s attorneys in a response to their counterparts’ motion to withdraw from the case. “In light of recent developments, the Plaintiff was considering filing certain motions seeking an expedited determination of various issues, not further delay.”
The project referenced in Manuel’s letter was not referenced by name, but the document addressed Gleichman in her role as general partner of Wilder Associates LP, which is the firm listed as managing the 24-unit Story Hill Apartments project in Washburn.
“We just can’t sit there and let Rome burn any longer,” Paul Driscoll of Norman, Hanson & DeTroy, representing Scarcelli, told the BDN on Monday evening. “I believe that it’s urgent that we act quickly because of the various matters that are pleaded in that motion. The concern is that there’s some urgency to deal with these things, so we’re trying to get this motion to withdraw done in a fashion that won’t interfere with the schedule of this case.”
Other projects referenced previously in court documents by Scarcelli as being mismanaged under Gleichman’s watch include Maple Tree Estates in Mapleton, Perramond Estates in Madawaska, Pittsfield Park Apartments in Pittsfield and Sara Pepper Place in Dixfield.
The legal tussle began in February when Scarcelli filed a lawsuit against her stepfather Norberg in his capacity as general partner of GN Holdings, asking the court to reaffirm her place as majority owner of the development firm. She alleged Norberg and others fabricated documents reducing her stake in the company after she threatened to exert her ownership authority and force the dismissal of Gleichman, who held an oversight role in several low-income housing projects the family members all held stake in.
Norberg and Gleichman then filed counterclaims last month alleging Scarcelli used her position in Stanford Management — a development firm Norberg founded and ultimately gifted to Scarcelli — to generate revenue improperly for her unsuccessful 2010 gubernatorial campaign.
Scarcelli responded in court filings denying the impropriety and seeking a dismissal of the counterclaims. In what Bals and Rosenthal wrote likely would be their final filing on behalf of Gleichman and Norberg, the attorneys filed an opposition to the dismissal motion, urging the court to allow the counterclaims to be included in the legal battle.
George Marcus, senior member of the firm representing Norberg and Gleichman, did not immediately returned calls from the Bangor Daily News on Monday.