Deb Shops, where teens in 42 states bought prom dresses, vanished in 2015. The private-equity owners that bought the chain from the Philadelphia families who had made it a national name blamed “old, tired” stores and styles.
But the chain’s legacy is very much alive. The fortune built by one of the former owners, the late Warren Weiner, has grown with other investments to more than $200 million — an amount worth fighting for, family members have shown.
After several years of disputes in Montgomery County Common Pleas and Orphans’ Courts, a lawsuit filed last week by Weiner’s daughter, Kimberly Block, against her mother, Penny Weiner, has made the family fight a federal case.
In 2007, Weiner and his business partner, Marvin Rounick, whose fathers ran the chain together before them, sold the publicly traded Deb Shops chain of more than 300 stores to private equity owners. With the families paid off, the investors boosted Deb’s debt, ran the company through two bankruptcies and shut the shops in 2015.
Weiner died in 2012. He had arranged for his wife, daughters Block and Robyn Carp, and a small group of family advisers to administer his fortune. They were to divide the remainder between the daughters when Penny Weiner dies.
The complex arrangements included a series of trust accounts, a group of trustees including the family trio to oversee the money, regular payments by the daughters to their mother that would reduce taxes on Weiner’s legacy, and a $44 million insurance policy designed to cover tax payments on the daughters’ own inheritances when Penny Weiner dies.
After Warren Weiner’s death, relations deteriorated between Block, her mother, and her sister. Block, who lives in South Carolina, has come to question the way the legacy has been handled. Penny Weiner and Carp still live on the Main Line.
On March 19, lawyers for Block filed a federal complaint in Philadelphia accusing her mother of trying to remove Block as an heir, transferring money from family accounts without proper permission, and threatening the daughters with much higher taxes.
This escalation into a federal civil complaint is “the latest desperate attempt in a long-running family dispute that has been litigated for years across multiple courts” with no judge so far ruling in Block’s favor, said Karl Prior, a lawyer for Weiner.
Block’s lawyer, Alan Frank, said: “The complaint sets forth what we believe to be valid claims.”
Among previous legal actions, Weiner filed suit in Montgomery County Common Pleas Court in 2021, accusing Block of breaches of contract. She alleged her daughter reneged on more than $4 million of the payments promised under an arrangement that was designed to reduce gift tax obligations Weiner faced after her husband’s death.
According to court documents, Weiner, Block, and Carp agreed at a family meeting after their father’s death that the daughters would make those payments, totaling more than $8 million, over the next several years.
Block quit as a trustee of the family trust overseeing a large part of her father’s assets in 2015. She wrote in a letter to the trust’s lawyer that she had been outvoted in her attempts to participate more in investment decisions and to set up “checks and balances” to deal with the “inherent conflicts of interest” in having her mother run a trust from which she also drew income.
In 2019, Block stopped making some of the agreed payments. In 2021, her mother asked a judge in Montgomery County Orphans’ Court to review the agreement. Carp, Block’s sister, separately asked that court to force her sister to continue making payments.
In 2022, Orphans’ Court Judge Lois E. Murphy declared the agreement was “valid and enforceable” and directed Block to pay.
In the new federal lawsuit, Block again challenges the payments. She argues that the arrangement was set up by her mother and her mother’s advisers as part of “an illegal plan” that was not at first made clear to her.
Block also alleges that Weiner has blocked her from receiving other payments she was entitled to. And she alleges her mother had been preparing to remove Block as a beneficiary of the family trust, threatening her half of the legacy.
Block’s suit alleges her mother “exercised secret control” over the trust, made use of some of her late husband’s funds without notifying other trustees, “wrongfully” approved federal tax documents, and ordered fund transfers, asset sales, and loans to accounts she controlled without proper permission. She also cited concern about premium payments for the $44 million insurance policy.
In making the allegations, the federal lawsuit cites testimony by an outside trustee, Robert Shein, along with “voluminous” records from bankers at Credit Suisse and JPMorgan, and from accounting firm Baker Tilly.
Block asks the court for a declaratory judgment that would affirm her right to half the assets set aside in the family trust; to require Weiner to ensure the tax insurance premiums are well funded; and to pay more than $3.5 million she says may be lost to the trust through unauthorized asset sales and other payments, plus interest, lost income, and other sums.
Prior, Weiner’s lawyer, called the complaint “a one-sided and incomplete account of complex estate, fiduciary, and governance matters” that have already been addressed in state courts. Weiner acted in good faith, guided by legal, financial, and tax professionals and “strongly disputes the allegations,” the lawyer said.