Facts

The City of Los Angeles sued Advanced Development & Investment and Pacific Housing Diversified, and individual defendants, in connection with the construction of affordable housing projects in the city.

Defendants Advanced Development & Investment and Pacific Housing Diversified have been in Receivership since February 2010.

PLAINTIFF'S CONTENTIONS:
The city accused defendants of defrauding the city in connection with the pre-development, pre-construction, and construction of affordable housing projects in the city and for using funds and loans from the Affordable Housing Trust Fund. The city asserted causes of action under the False Claims Act and the California Unfair Competition Law, as well as causes of action for fraud, constructive fraud, deceit, RICO violations, conspiracy, negligence, breach of contract, breach of implied covenant of good faith and fair dealing, injunctive relief and accounting, and constructive trust.

DEFENDANTS' CONTENTIONS:
Certain individual defendants denied the city's allegations, and asserted various affirmative defenses.

Result

The city settled the dispute with respect to corporate defendants Advanced Development & Investment and Pacific Housing Diversified in the amount of $7.5 million.

Other Information

David J. Pasternak is the Receiver for Advanced Development & Investment, Pacific Housing Diversified, and their affiliated and related entities. The Hon. Carl West, ret., acted as limited powers receiver with respect to the settlement negotiations between the City of Los Angeles, Advanced Development & Investment and Pacific Housing Diversified.