Trial Against Zarian and Partners Delayed

One of the defendants in a $15-million lawsuit alleging that Glendale City Councilman Larry Zarian and his business partners knowingly sold defective condominiums has filed for bankruptcy protection, forcing the homeowners who filed the suit to postpone court proceedings.

Jury selection was set to begin Monday in Los Angeles Superior Court in the case brought by the Glen Valley Homeowners Assn., which represents residents of a 95-unit condo complex on Montrose Avenue.

But the case was delayed until May 15 when the homeowners learned that Nathan Kahn, a partner in a New York investment group that briefly owned the property, is seeking protection from creditors, said Lee Barker, the homeowners’ attorney.

“The bankruptcy filing means that there is an automatic stay, and we would forfeit the ability to go after his assets if we were to proceed with the trial at this point,” Barker said. “We were not willing to do that.”

Barker said the homeowners have hired a New York attorney to ask the federal bankruptcy court to lift the restrictions preventing them from suing Kahn.

The case names numerous defendants including Zarian and his Glendale business partners, the New York investors and the contractors who built the complex.

It alleges flaws ranging from leaking pipes and faulty electrical systems to walls so thin that conversations are easily overheard.

Zarian has maintained that he was only a passive investor in the project, while the lawsuit alleges he was actively involved in the sale of the condominiums.

The condominiums were completed in 1989 and the lawsuit was filed the following year.

The homeowners are seeking cash to allow them to fix the construction problems, which, they say, have made it nearly impossible for them to sell their homes.

The trial is expected to last up to three months.

Tom Dowling, Kahn’s attorney, was unavailable for comment.