A week after a bankruptcy judge ruled that Orange County treasurer-tax collector Chriss Street had abused his position as trustee for a bankrupt trailer manufacturer, Street announced he would not run for re-election and agreed to surrender his office’s investment authority.
The ruling stems from the 1996 bankruptcy of Freuhauf Trailer Corp. Between 1998 and 2005, Street was the court-appointed trustee assigned to liquidate the assets and distribute them to creditors.
In a case brought by Street’s successor as trustee, U.S. Bankruptcy Judge Richard Neiter found that Street had violated his fiduciary duties and abused his position as trustee by trying to acquire other companies in what proved to be a failed attempt to create a new trailer conglomerate that he would control.
The judge also found that Street had used the bankruptcy trust to underwrite many of his own business and personal expenses, and ordered him to pay the successor trust $7 million in compensation.
Street first entered public life as an ally of John Moorlach during Moorlach’s unsuccessful 1994 run for the county treasurer position, during which Moorlach and Street warned of the dangers of Treasurer Robert Citron’s investment strategies.
After those strategies drove Orange County into Chapter 9 bankruptcy in late 1994, Moorlach was appointed treasurer, and subsequently elected to the position in 1998 and re-elected in 2002.
Before he left the treasurer’s office to run for the county Board of Supervisors, Moorlach groomed Street for the job by appointing him deputy treasurer before the 2006 election, in which Street won the treasurer’s position.
Their relationship subsequently soured after Street’s election, when the first revelations about the Freuhauf trust began to emerge.
“When I finally found out the truth, after making excuses for him for far too long, I asked him to resign as treasurer-tax ollector,” Moorlach said last week in a posting to his e-mail list. Moorlach renewed that call after this month’s bankruptcy verdict.
The Board of Supervisors Tuesday voted to revoke Street’s investment authority, and delegate it to county chief financial officer Robert Franz. Street did not file for re-election last week, so the job will be up for grabs this year, with a nonpartisan June primary and a November runoff if no candidate gains a majority in June.