Laguna mayor explains bankruptcy filing
Laguna Beach Mayor Steve Dicterow publicly responded to critics who called attention to his decision to file for personal bankruptcy in September 2014, saying the business climate following the recession nearly forced him and his wife from their home.
Dicterow, who is seeking reelection next month, said he and his wife voluntary filed for Chapter 11 reorganization of their debts two year ago.
“It’s never been a secret in town,” said Dicterow, an attorney who works as an aide to Rep. Dana Rohrabacher (R-Costa Mesa). “Staff knew. Friends such as (Mayor Pro Tem) Toni Iseman tried to help in the process, even people who don’t support me politically.
“We were doing OK, trying to negotiate with the mortgage company, but they refused to cooperate over 20 months. They finally posted a 30-day notice on the door, saying they were going to sell my house.”
Dicterow said his wife, Catrina, is disabled and that he did “everything I could within reason and the law to protect her and to save the house to give her comfort.”
Dicterow explained his financial situation both at Tuesday’s City Council meeting, where some of the public speakers questioned him, and in an interview with the Daily Pilot.
An accumulation of personal debt and “substantial reduction” in work in the years preceding 2014 led to the bankruptcy, according to the couple’s bankruptcy court records.
The Dicterows owed $1.15 million on their Laguna Beach house and a rental condominium in Laguna Woods, along with $283,170 in unsecured claims, such as credit card and student loan debt, according to the bankruptcy filing.
“My business, as thousands of others who had problems resulting from the 2008 economic crisis, was no longer profitable,” Dicterow said referring to his former role as chief operating officer of an international motorcycle-racing circuit. “I had to walk away and live off savings.”
A U.S. Bankruptcy Court judge approved a reorganization plan in November in which the Dicterows agreed to make payments on their debts.
With November’s election three weeks away, speakers at the council meeting asked why Dicterow did not list certain income sources on his Form 700, a disclosure document required of all public officials in California.
“As someone who strongly supports transparency and fiduciary responsibility, one must ask why Mayor Dicterow had not practiced what he preached,” resident George Weiss said at the meeting.
Dicterow, a co-partner with Laguna Intellectual Property Law Group, and general counsel for American Computer Optics, did not list either business on the form.
Dicterow said he did not list American Computer Optics because the company is based outside of Laguna
And, he added, that he just joined Laguna Intellectual Property this year and didn’t know whether he needed to disclose that.
Under state Fair Political Practices Commission rules, a public official may not have to report some forms of income
“It depends,” the FPPC’s communicationsdirector Jay Wierenga wrote in an email. “Generally speaking, income derived from outside of the jurisdiction is generally not reportable. But it may be reportable, if the work involves a company or entity that does or potentially does business in the jurisdiction.”
William Levin, Dicterow’s law partner, called some speakers’ statements an unwarranted “opaque attack.”
“I’m proud to have Mr. Dicterow as my partner,” Levin said. “He is one of the most honorable, ethical people I have ever met in life. I think you’ve got some special interests behind this.”
Immediately after Levin spoke, council candidate Judie Mancuso told the council she received an anonymous email circulating among Laguna residents that alluded to Dicterow’s bankruptcy and financial disclosure forms.
“I was not going to dive into it. I don’t have the time,” Mancuso said. “Some of the residents I’m associated with looked into it, and what they found was troubling.”
Mancuso said Dicterow’s financial judgment could impact the city.
“Steve has decision-making power over the finances of Laguna Beach,” she said. “If he has chosen wrong, bad decisions on his own finances, then maybe those same, wrong bad decisions might transfer over to the city.”
Dicterow said he has not missed a payment toward his reorganized debt.
“Nothing indicates impropriety,” Dicterow told the Pilot. “These are innuendos that are malicious and false.”
Twitter: @AldertonBryce
