Executor told to pay Rappaport heirs

A New York real estate tycoon has been ordered by a Bucks County judge to pay $10 million to the heirs of the late Philadelphia landlord Samuel Rappaport.

Richard Basciano, a real estate investor the New York Times once called "the undisputed king of Times Square porn," had been close to Rappaport.

Before he died in 1994, Rappaport named Basciano the executor of his estate. Rappaport's extensive holdings included the old Philadelphia Saving Fund Society bank on Walnut Street and other vacant and decaying Center City landmarks, former Reading Co. properties, Atlantic City's sewer system, properties on the Boardwalk, parking garages, a Florida resort, and a prime building site adjoining the University of Delaware.

According to the judge's decision, Basciano amassed a fortune worth about $150 million through real estate investments that included the former "Show World" complex of peep shows on Times Square.

Rappaport "had a reputation for poorly maintaining his properties" and "received a significant number of code violations from the City of Philadelphia," according to the opinion signed by Bucks County Orphans Court Judge C. Theodore Fritsch Jr.

Rappaport's children, Wil Rappaport and Tracy Rappaport Scott, once called Basciano "Uncle Ritchie" and were closer to him than to their own father, according to court documents. Basciano even walked Scott down the aisle at her wedding.

But the relationship began to sour in April 1995 after Basciano sold a billboard company to Lewis Katz, the owner of another outdoor advertising firm. The children owned 90 percent of Classic Outdoor Advertising and were upset when the sale netted only $6.7 million in cash. The family objected again when Basciano sold a shopping center in Boca Raton, Fla., three sites on South Carolina Avenue in Atlantic City next to Resorts Casino, and the PSFS building at Seventh Street and Walnut, according to court documents.

Rappaport's children accused Basciano - who had added his wife, Lois Palmer Basciano, as a coexecutor - of charging excessive fees, selling unauthorized property, and pocketing proceeds that should have gone to them.

In 2000, the family demanded that the Bascianos resign and return funds to the estate.

The Bascianos refused. It took eight years of legal complaints and countersuits before Fritsch ordered the Bascianos to pay off the Rappaports in August.

Basciano's lawyer, John A. Guernsey of Conrad O'Brien P.C., was not available for comment Friday.

The Rappaports' lawyers, Ronald J. Shaffer and Eric Wood of Fox Rothschild LLP, issued a statement Friday:

"This case should serve as a warning to executors that they owe the highest duty of loyalty; are obligated to protect the assets of an estate; and cannot put their own self-interest ahead of the beneficiaries.

"The Bascianos have now been directed to repay the estate millions of dollars and ordered to return improperly acquired estate property in one of the largest probate awards in the history of Pennsylvania."

The dispute isn't over. Both sides have appealed to Superior Court.