.First Interstate Bank of California twicefiled suit against Epstein in an attempt torecover money promised to the bank. Mike Anderson,an attorney in First Interstate's law division,said the bank loaned Epstein $16 million to builda 288-unit complex called the River GlenApartments in Glendale, Calif.
The project had cost overruns, but Epsteinrepeatedly promised he would pay. In 1991,Anderson said, the bank stopped believing thepromises and foreclosed.
.In October 1990, Executive Bank filed suitagainst Epstein and the Epstein-controlledBroadway Mission Properties to recoup nearly $1.9million in loans and interest.
.The week before Christmas in 1991, a LosAngeles County Superior Court judge orderedEpstein, his wife, a business partner and anotherEpstein-controlled company to pay $789,823.75 toCalifornia United Bank.
While Epstein's California business dealingsran into trouble, his ventures elsewhere wereconsiderably more successful. Records from theTexas Secretary of State's Office show that thebusiness Epstein helps to administer in the LoneStar have done well, with one exception.
Epstein is either a vice president or secretaryin nine Texas companies, most of them real estate.The head of the companies, Donald Ternier ofHouston, would not comment yesterday. All ofTernier's and Epstein's companies are active andconsidered to be "in good standing," according tothe Texas Secretary of State.
The one exception is Texcal Leasing, Inc.,which was founded in October of 1979. Epstein waspresident, and the company, which operated out ofthe Americana Building on Dallas Ave. in Houston,folded in 1982.
Epstein has a two-year appointment as avisiting professor at the Business School. Unlesshis stay is somehow extended, he will leaveHarvard at the end of this academic year.
But Epstein's history raises questions aboutthe standards of behavior expected from a BusinessSchool professor, questions the Business Schoolhas thus far been unwilling to answer.
Speaking on condition of anonymity, ethicistsaround the country interviewed in recent weeksemphasize that they could not pass judgment onEpstein because they did not know his intent ineach of the cases.
Last spring, Lecturer in BusinessAdministration Joseph L. Badaracco, Jr, aspecialist in business ethics, echoed thisopinion.
"I don't know if there are any generalprinciples that apply," Badaracco said. "I imaginethis case and others like it depend on some veryspecific facts."
Epstein, who has not spoken with The Crimsonsince last May, said then that he is pursuingunspecified legal action to recoup his losses. Ina review of Los Angeles County court records, TheCrimson could find no indication of any suchaction.
"There are many other factors...that will beresolved, and what is often the case with civillitigation is that it often drags on for years,"Epstein said. "I expect that when all of this isresolved it will be resolved in my favor."
Jim Ho in Los Angeles and Kathryn M. Meneelycontributed to the reporting of this story.