TMI Transfers Investors’ Suit From O.C. to L.A. Federal Court

Lawyers for Teachers Management & Investment Corp. said Tuesday they have transferred a lawsuit filed against the Newport Beach investment fund from Orange County to U.S. District Court in Los Angeles.

Four investors sued the 26-year-old fund on Aug. 23 in Orange County Superior Court alleging that its operators lost $100 million of client funds through fraud and racketeering. The suit seeks appointment of a receiver, alleging that TMI, which marketed real estate investments to teachers across California, is now insolvent.

Company owners Maurice B. Shuman and James R. Martin, who have denied the allegations, maintain that the downturn in the real estate market is responsible for the losses.

A hearing on whether to appoint a receiver for the company had been scheduled for next Monday.

“There probably won’t be a hearing then,” said David Grant, partner with Grant & Laubscher), the Irvine law firm representing TMI.

Grant said TMI wanted the suit moved because federal courts are generally better suited to “manage the complex issues involved in the lawsuit, including TMI’s efforts to put the issues to either a vote of the limited partners or arbitration.”

The lawyer for investors called the move by TMI a “judge-shopping” ploy. “They can try and pick whatever judge they want, but the day of justice will come,” said Ron Rus, who represents the plaintiffs.