Lawrence R. Rachuba took his father -in-law's property development company to new heights. Then the family partnership unraveled.

FAMILY FEUD

December 31, 1990|By Timothy J. Mullaney

Just a couple of years ago, he was a Baron of the Beltway. By early this year, he was nearly broke. "If Larry Rachuba's in trouble, who's safe?" was the refrain in real estate circles around town.

Lawrence R. Rachuba was a heavy hitter among local developers -- a man who took over one of metropolitan Baltimore's biggest development companies from his father-in-law, Ralph DeChiaro, and led it to even greater heights. He built Baltimore' County's glitziest hotel. And he took Towson Town Center from a dowdy also-ran and brought it into the front ranks of Baltimore-area malls.

In short, Larry Rachuba was about the last person anyone expected to see fighting to save his house from the auctioneer. But there it was. On July 18, just two days before his Howard County estate was scheduled to go on the block, Mr. Rachuba and his wife shooed the wolf from their door by filing for bankruptcy.

Just a simple story, really, say some longtime associates. No scandal, just a developer who made money for so many years he forgot he could lose it.

But with a network of properties as wide as Mr. Rachuba's, and with holdings so tightly intermingled with those of his in-laws, it couldn't be exactly simple.

There are lawsuits -- plenty of them. At U.S. Bankruptcy Court in Baltimore, 88 organizations, lawyers and others are on the mailing list for filings in the case. There are allegations from the DeChiaro Limited Partnership that Mr. Rachuba abused his authority as head of the two families' enterprises, in particular that he committed the DeChiaro family to backing Rachuba projects.

The DeChiaro suit carries a special irony. In effect, Mr. Rachuba is suing himself -- sort of. He owns 1 percent of the DeChiaro partnership, and his wife, Diane, owns 33 percent. Diane's sisters control the rest, the result of Mr. DeChiaro's early bequests, a form of estate planning, in the 1980s.

The DeChiaro partnership also forced two Rachuba ventures -- the Baltimore Travel Plaza, a gussied-up truck stop off Interstate in East Baltimore, and the Virginia Travel Plaza near Richmond -- into involuntary bankruptcy proceedings in November.

If it seems confusing, don't count on getting much explanation from the families. The Rachubas aren't talking, according to Lawrence Coppel, their bankruptcy attorney. They also didn't return calls to their home and his office.

One of the sisters, Carol Scheffenacker, declined to comment. The other sister, Roberta Hucek, didn't return calls seeking an interview. Most associates also didn't want to talk, and the legions of lawyers are mostly keeping quiet.

There may be less of a rift than the lawsuits seem to indicate, however. One source said the suits might have the effect of slowing down banks' pursuit of DeChiaro assets, which at least two banks tried to garnish earlier this year, by blaming the mess on the Rachubas while the couple are protected from creditors under Chapter 11 of the U.S. Bankruptcy Code.

The numbers are imposing. The debts listed in the Rachubas' bankruptcy filing come to more than $294 million, though that number is misleading because it includes the debts of partnerships the couple only partially owns.

How much their assets are worth isn't clear, since the filing only attempts to put a value on their personal assets -- and doesn't value the assets of Rachuba-backed partnerships that aren't in Chapter 11.

Behind it all is a man who his friend Gary Blucher, a 20-year employee who now has his own company, says didn't want to file for bankruptcy. And Mr. Blucher says his friend doesn't deserve all this grief.

"Larry Rachuba was and is a very respected man," Mr. Blucher said. "He got himself in a situation a lot of developers did -- he over-leveraged. Times went bad and he wasn't prepared."

Mr. Rachuba earned the respect he gained, associates say, but he clearly got a boost from Ralph DeChiaro.

Mr. DeChiaro came to Baltimore from New York decades ago, started building houses and just didn't stop building. He built well-known developments such as the Campus Hills section of Towson, Hilton hotels in Baltimore (now the Omni) and Annapolis, and the Towson Plaza shopping center. And he made a lot of money.

Along the way, Mr. DeChiaro, now nearly 80, had three daughters but no sons. All three daughters married, but Mr. Rachuba came into line to take over the family business. One of the other sons-in-law had an insurance business of his own and )) wasn't interested in development, and the other left after a stint at DeChiaro. Mr. Rachuba started out working on homebuilding crews in the early 1960s and worked his way up. In any event, the other two sisters' marriages ended in divorce.

"Larry was the only one with the intelligence, initiative and drive" it took to run the family business, Mr. Blucher said.

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