Success Village Co-Op Cry for Help

Success Village Residents Failed By Management

A Lesson in Breach of Fiduciary Duty

By Barbara Heimlich
Editor
Sources:  Lennie Grimaldi, Only In Bridgeport, Daniel Tepfer, Connecticut Post.

The 900 unit co-op split between Bridgeport and Stratford and its roughly 2,000 residents is a shocking example of management neglect and failed representation, residents without heat and hot water begging for action as the cold weather season is upon us.

Residents, many of which are elderly, handicapped, or with children, have dutifully paid their rent and dues, have nowhere to go—their housing is condemned by town and state officials.

Bridgeport and Stratford leaders prevailed upon the court to conduct a trial to impress upon the urgency of the situation to find a short and long term solution to correct the heat and hot water issue with a modernized infrastructure system. This is a rarely pursued option, asking the court to appoint a receiver to stem the damage and set a correct course. It’s a health emergency.

On September 5^th, with distressed Success Village residents filling the courtroom, testimony before Superior Court Judge Dale Radcliffe focused on the beleaguered finances. Just a few years ago, it was disclosed under oath, the co-op was easily in the black, but the past year the financial floodgates opened with no resolution to the problem, with now $3 million in debt, with more the $2 million owed combined to Bridgeport and Stratford in property taxes.

In the past year the money was directed to:

• Nearly $1 million in legal fees
• $2.3 million to Umbrella Mechanical to address the antiquated heating system
• $422,000 in management fees
• $289,000 in consulting expenses
• Cash withdrawals from various bank accounts with no accountability

The management of Success Village declared bankruptcy September 6^th as the apartment complex’s lawyer was about to present his case in opposition to a temporary overseer being appointed for the troubled co-op complex.

Richard Buturla, the lawyer representing Bridgeport and the Town of Stratford in the lawsuit to have a receiver appointed to take over the complex’s finances, had just presented his 16th and final witness before the judge — the president of the union representing the complex’s maintenance workers — and rested his case.

Attorney Dennis Bradley walked into the courtroom that was filled with Success Village residents and city officials. Standing before Superior Court Judge Dale Radcliffe he opened a file folder and announced that the co-op was the subject of a bankruptcy filing in U.S. District Court.

 “Based on this filing this case is stayed and cannot proceed,” Bradley told the judge as Success Village residents in the back of the courtroom burst into tears.

 “I have no choice but to suspend this matter,” Radcliffe said after getting the bankruptcy filing confirmed. “I hope the city of Bridgeport and the town of Stratford will continue to move this process forward, because time is of the essence and clearly this was an attempt to prevent this court from going forward at this time with the merits of this case.”

Tyreke Bird, President of Success Village, who had authorized the bankruptcy filing, said the filing “gives us the opportunity to get our affairs in order when it comes down to our debts.”

The WWII-era complex, which straddles the Bridgeport/Stratford border, has had problems with its heat and hot water since state and local officials ordered the boilers shut down in May over safety concerns.

“The main focus is to make sure we provide heat for all of our members at Success Village and get that all going now, immediately,” Bird said. “In another four-to-six weeks we’ll be facing that time where we would need heat on.”

 “Success (Village) has financial issues and the appropriate place to deal with financial issues is bankruptcy court,” Bradley said. He said under Chapter 11 bankruptcy a trustee will be appointed to oversee the co-op’s finances. “This is not a stalling tactic, it will actually expedite the situation,” he said.

 “I expect the Town of Stratford and Bridgeport will be moving expeditiously in U.S, bankruptcy court to lift the stay and return this matter to this court,” Buturla said later.

Buturla filed suit against Success Village after the councils of both municipalities voted to seek to have the management of the complex handed over to an independent receiver. Cameron Moxley, the lawyer for UI and the gas company, filed a similar suit, claiming the co-op’s management, which is sent the utility bills for the complex, owes the utilities in excess of $1.3 million.

According to testimony, the co-op owes $241,597 in back taxes to Stratford and more than $2 million in delinquent taxes to Bridgeport.

Health directors of both Bridgeport and Stratford testified that residents of Success Village would not be permitted to live there if there is no heat this heating season, beginning in October. The town and the city would then be required under a public act to relocate the residents at the municipalities’ expense.