Epstein pension fund raided, bankruptcy trustee charges

February 25, 1993|By Norris P. West | Norris P. West,Staff Writer

A bankruptcy trustee has charged in a lawsuit that seven people associated with the now-defunct L. Epstein & Sons raided the company's pension fund months before the company was forced into bankruptcy.

The suit, filed in U.S. Bankruptcy Court, charges that the seven took $1.44 million from the account between May and October 1990. More than $1 million of that was disbursed to the seven people, the suit claims.

Sarah E. Longston, a lawyer for the Epstein estate, said the debtor was "taking absolutely no position on the lawsuits."

Six of the seven people named in the suit were officials and members of the family that founded the discount department store about 67 years ago. They are former company President Arnold Schaftel, Norman Espstein, Louis Schaftel, Brian Dubin, Jerry Stern and Scott Yurow.

The largest beneficiaries, according to the suit filed Friday, were Arnold Schaftel, who received $510,094, and Mr. Epstein, who received $282,454. They could not be reached for comment.

The seventh person named in the suit, Morton Goldstein, received $202,305, according to the suit. But he said he did not belong in the case.

"I was surprised to hear about my name being in there," said Mr. Goldstein, who said he deserved the pension for his 50 years of work. "I was never anything more than an employee; I never got any other benefits, and I never had anything to do with the money."

Joel I. Sher, an attorney for the trustee, said the defendants were named, however, because they received their pension plan payments before other beneficiaries.

He said the estate owes more than $5 million to hundreds of creditors.

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