Suit Alleges Plot to Sink Restaurant

In a final stab at retaining his berth at the Port of Los Angeles, the owner of the foundering Princess Louise has filed a lawsuit blaming his financial troubles on a conspiracy among bankers, port officials and the developers who sold him the floating restaurant.

“The ship belongs here,” declared owner Marion Perkov, who is still operating the restaurant while trying to reorganize under federal bankruptcy laws. “It would have been easier to walk, but I couldn’t do it. I think the courts have to look at this and say who’s right or wrong.”

The suit, which seeks at least $2 million in damages, names the city of Los Angeles, its Harbor Department, the two San Pedro developers who sold Perkov the floating restaurant, the bank that financed the deal and the dinner-cruise company that plans to move into his space underneath the Vincent Thomas Bridge.

The defendants who could be reached for comment denied wrongdoing.

‘Interlocking Relationships’

The suit claims that a tangled web of transactions between parties who had improper “interlocking relationships” defrauded Perkov and sent the Princess Louise into Chapter 11 bankruptcy. Among other things, the suit alleges:

That developers Steven Podesta and Bill Moller sold Perkov something they didn’t own: the Harbor Department lease for the Princess Louise berth. Perkov paid $2.7 million for the ship, and says in the suit that $1.3 million of the sale price was for the lease and a related permit. The lease was never transferred to him.

That Podesta, Moller and the Bank of San Pedro, which loaned Perkov $1.2 million to help him buy the ship, participated in an organized “illegal scheme” to defraud Perkov, in part by misrepresenting the ship’s profits. The suit makes this claim under the civil provisions of the federal Racketeer Influenced and Corrupt Organizations Act, which generally is used against organized crime.

That Podesta and Moller conspired with the bank to force Perkov to pay up on his loans, and with the Harbor Department to transfer the lease to a third party--the incoming dinner cruise company. The transfer in effect forces Perkov to leave the port.

The suit complains that the alleged conspiracies were implemented through what Perkov’s lawyer, Thomas Sheridan, called “an awful lot of suspect relationships” among the defendants. For instance: Podesta and Moller are also directors and shareholders of the Bank of San Pedro.

The chairman of the bank’s board, Peter Mandia, is also a top Harbor Department staff person in his job as executive secretary to the Board of Harbor Commissioners. In August the board voted to transfer the lease for the Princess Louise’s berth to the dinner cruise company. And Mark Richter, the port official who handled the lease transfer to the dinner cruise company, is a former employee of a bank subsidiary.

‘Empty Allegation’

Podesta, Moller and Mandia could not be reached. However, Bank of San Pedro President Lance Oak said he saw no conflicts of interest among the participants in the Princess Louise transactions. “I think this whole thing is just blown out of proportion,” he said.

Richter concurred. “I think it’s an empty allegation,” he said.

Richter also said port officials attempted to investigate whether Podesta and Moller had attempted to sell the lease to Perkov. Such an investigation, he said, is standard practice because the Harbor Department, which wants control over what kind of business operates on its property, does not permit the sale of its leases.

He said port officials never reached a conclusion because Perkov, Podesta and Moller failed to provide information that the port requested. He said that factor--as well as concerns about Perkov’s financial condition--led the port to refuse to transfer the lease to Perkov in March, 1988. In April, Perkov filed for protection from his creditors under the Chapter 11 bankruptcy code.

Richter said permitting the Princess Louise to stay at its berth is not in the best interest of the port, even though many in San Pedro have a sentimental attachment to the 69-year-old ship.

“I think we would be subject to some criticism if we did not make the best use of our property, and certainly the best use of our property would not be to have a bankrupt floating restaurant sitting there,” he said.

Ordered to Leave

Now that the lease has been transferred from Podesta and Moller to the dinner-cruise company, Perkov is under orders from the Harbor Department to tow the Princess Louise from its berth by Jan. 15. His lawyer said he is hoping a judge in Los Angeles Superior Court, where the suit was filed, will issue an injunction allowing the ship to remain.

The Princess Louise has been a fixture for two decades in San Pedro, where it has played host to countless weddings and other celebrations. In its heyday, the former Canadian ocean liner cruised the Alaskan straits from Vancouver, B.C., to Skagway, Alaska.

The ship, which is no longer functional as a seagoing vessel, was converted into a restaurant in 1966 and operated at Terminal Island from then until 1979, when it was moved to its current berth.

The ship has changed owners several times. Perkov bought it from Podesta and Moller in 1984.

In the lawsuit, Perkov says he was unable to meet his obligations because Moller falsely represented the annual gross sales of the ship to be $3 million when they are actually $2 million, and because the lease was never transferred. The suit says that without the lease, Perkov lost the ability to attract third-party investors who would have helped him pay off his loans and operate the ship.

Richter has estimated that Perkov owes $40,000 in back rent. Oak said Perkov still owes $1 million that the bank is trying to collect. He said the bank is also attempting to claim ownership of the ship through the bankruptcy court.