Accord May End Default on Warner Center Complex

Coast Savings Financial Inc. said it has completed negotiations for a reorganization of the partnership that owns the Warner Center Apartments in Woodland Hills. The settlement agreement, if approved by the limited partners of the project, would cure the default on the loan for the apartment complex, the company said.

The 1,279-unit apartment complex at 5555 Canoga Ave. was built amid controversy in 1985 with $144 million in city revenue bonds. Coast Savings Financial, the Los Angeles parent of Coast Federal Bank, financed the housing bond issue. Coast filed suit last June against the development’s owner, Mayer Warner Center, seeking to take control of the apartments after Mayer Warner failed to make its mortgage payments.

The general partners of Mayer Warner are developer Alan Casden and Shearson Lehman/American Express, who were also named as defendants in an April, 1992, suit filed by more than 130 of the limited partners in the complex. That suit accused the general partners of fraud, negligent misrepresentation and breach of fiduciary duty.

Casden and an attorney representing Shearson did not return phone calls. Michael White, an attorney who represents the limited partners, previously said that foreclosure of the property could result in the loss of $12 million that his clients invested.

He could not be reached for comment regarding the proposed settlement.

Details of the settlement were not disclosed. If approved, Coast said, it expects the transaction will be completed by June 30.