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County treasurer candidate defends bankruptcy role

May 30, 2006|By Alicia Robinson

As one of two candidates for county treasurer, Chriss Street is finding he has to defend himself on charges related to his management of a corporate bankruptcy.

Street is now the assistant treasurer and the chosen successor of Orange County Treasurer John Moorlach. But as Street was beginning his campaign, the current head of truck trailer manufacturer Fruehauf Trailer Corp. charged him with mismanagement of that company between 1998 and 2005.

Among those raising questions about Street's legal entanglements is Patrick Desmond, 59, an auditor and appraiser in the county assessor's office who is running against Street, 55, a longtime Newport Beach resident, in the June 6 election.

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Orange County Dist. Atty. Tony Rackaucus is reportedly investigating Street, but the office does not comment on ongoing investigations, and it's unclear what the nature of an investigation might be.

Rackaucus and county supervisors Chris Norby and Bill Campbell withdrew their endorsements of Street after the Fruehauf allegations came out in March.

"There's a cloud of uncertainty surrounding his candidacy right now and I think it's better to sit on the sidelines," Campbell said.

Street took control of Fruehauf when the company filed for bankruptcy. He said his management enabled the company to substantially reduce the financial claims against it and to pay pension benefits to former employees.

He quit in 2005 after what he now describes as a disagreement with investment banker Daniel Harrow, who Street said wanted to sell a branch of the company without protecting it against future financial claims.

Harrow later took over management of the company, and in March 2006 he filed a report in a Delaware federal bankruptcy court accusing Street of "mismanagement, conflicts of interest, and greed," according to the report. Harrow alleged that Street paid himself and his wife a salary of more than $2 million, and that he squandered at least $11.7 million of the trust's money on overhead costs and expenses.

Street and his political consultant, Brett Barbre, said Harrow made the allegations once he got into trouble as head of the Fruehauf trust. Street said he has filed a defamation suit against Harrow.

"It's the classic [reaction] in business ? if something goes awry, what's the best thing to do? Blame your predecessor," Barbre said.

Street has worked in corporate finance for years, but he also has been involved in Orange County finances for more than a decade.

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