Now the Lembi hotels are in trouble

Andrew Ross in the SF Chronicle has been staying on top of the continuing dismantling of the Lembi real estate empire. Earlier this month, he noted that the Lembi group was about to be sanctioned $30,000 by the court for not providing their part of discovery in a law suit brought by former tenants who could not get their security deposits back. In February, the court fined the Lembis $50,000 for not meeting discovery requests for the suit brought by the San Francisco City Attorney’s office in 2006.

The other bad news for the Lembis was that Yvonne Lembi Detert, the daughter of Frank L who runs the family hotel business, was having a hard time making payroll. Her highly leveraged hotels haven’t been doing very well during the downturn. The company recently placed the hotels in Chapter 11 bankruptcy protection. Lembi-Detert was able to make payroll in the beginning of the month but it was unclear if mid-month paychecks would be forthcoming. Sick days and vacation days were not being paid either.