Professors who know him say they have respect for Epstein, who has focused much of his study on legal and ethical responsibilities and the use of corporate reports by shareholders. But even professors who say they are close friends of Epstein say they were totally unaware of the loan or the failed businesses.

"He's an excellent teacher," says Yeshiva University assistant professor of accounting Moses Pava, who co-authored the paper that Epstein presented last week in Finland. "He won the teacher of the year award [at Yeshiva] for '91-'92."

"He mentioned he had some real estate interests," says Pava. "Otherwise, I don't know anything about what you're talking about."

Professor of Business Administration William J. Bruns, a friend of Epstein's since his days at the University of Oregon, says that while the professor may have exercised bad judgment in signing onto the loan, his financial history should not be a public issue.

"From what I know of Marc, if he says he's made his peace with the court, then it's not the issue," says Bruns. "If he has an obligation, he's going to work something out with the court like a lot of us do when we make mistakes."

But Business School students interviewed on condition of anonymity say they believe Epstein's past is significant. Students from Epstein's fall class say they found their teacher both accessible and knowledgeable. But some say they wonder about the ethics of Epstein's actions.

"He's an extremely skilled accountant and financial adviser," says one first-year student, speaking on condition of anonymity. "He seemed very ethical, but this bothers me."

Other students say they worry about how or if Epstein's behavior dovetails with the Business School's stated commitment to promote ethics in the classroom.

"It's kind of questionable and kind of interesting," says another student, adding that he admires Epstein as a professor. "Intelligence and ethics don't necessarily go together."

But three experts in ethics interviewed last week say that there is no clear-cut evidence of any wrongdoing in this case. In matters of loans, judging ethics has to do with the individual facts of the borrowing agreement, they say.

"I don't know if there are any general principles that apply," says Lecturer in Business Administration Joseph L. Badaracco Jr., an expert in business ethics. "I imagine this case and others like it depend on some very specific facts."

Those facts may remain unclear for some time. Epstein is in Helsinki, Finland, until the end of this week.

But the questions burn. What is the legal action Epstein says he has undertaken against past business associates? How deeply involved was he in the failures of Western Consulting Group and Western Business Investors? What impact, if any, will this have on his ability to teach accounting?

Whatever the resolution, students, faculty and attorneys say, getting a good accounting of Epstein's past accounts won't be simple.

"There are many other factors...that will be resolved and what is often the case with civil litigation is that it often drags on for years," says Epstein. "I expect that when all of this is resolved it will be resolved in my favor."

Stephen E. Frank '95 contributed to the reporting of this story.

Until four years ago, Marc J. Epstein was a player in the California real estate market. But two investment companies with which Epstein was associated have gone under in the past two years. Last year, a California court ruled that he would have to pay $2.7 million on a loan he guaranteed for the two companies. Now an accounting professor at Harvard Business School, a California bank has recently forced Epstein to...

'We didn't know where he was for a couple of years. The court directed him to pay us the money instead of having the University give us the money from his paycheck. They ordered him to pay, and he has been.' Richard Burdge attorney representing Mitsui Manufacturers Bank

'The existence of a legal suit does not disqualify a person from being a faculty member. If that were the case, a lot of us couldn't teach here.' Robert S. Kaplan Dickinson professor of accounting Harvard Business School

'I don't remember the details of the company. I was involved in many companies. Whether I was the founder [of Western Consulting] or someone else was the founder, I don't know.' Marc J. Epstein visting professor Harvard Business School