TORRANCE : City Files Lawsuit Against Delaware Firm
The city has filed a lawsuit against a Delaware investment partnership, claiming that a $1-million city investment with the firm is illegal and that the money should be refunded.
The suit was filed in Los Angeles Superior Court last week. It asks the court to invalidate the investment with American Insured Mortgage Investors-88, an insured loan program for mortgages on multifamily housing developments.
Howard Loeb, a Los Angeles attorney representing the investment partnership, said he was not prepared to comment on the city’s action.
The financial agreement involving Torrance and the partnership was made in June, 1988, at the direction of City Treasurer Thomas C. Rupert, who has repeatedly defended the investment as sound and legal.
However, City Atty. Kenneth Nelson said the mortgage program does not meet state codes governing municipal investments. The city hired an outside law firm, Hedges & Caldwell, to pursue the matter.
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