Judge Refuses to OK Teachers, TMI Settlement

Saying there are too many unresolved issues, an Orange County judge refused Thursday to approve a tentative $4-million settlement between Teachers Management & Investment Corp. and the company’s investors.

“At this point, I don’t have a settlement I can enforce,” said Superior Court Judge Francisco F. Firmat, pointing out that the two sides have been unable to resolve their differences in finalizing the tentative agreement they had reached six months ago.

Investors--mainly retired teachers representing a class of about 8,000 educators--sued privately owned TMI and its operators two years ago, accusing them of fraud and negligence and seeking $100 million in damages for their losses.

The teachers allege that TMI owners diverted funds for their own use. The company and its operators, Maurice B. Shuman and James R. Martin, assert that the recession eroded property values and caused the losses.

Lawyers for the Newport Beach investment company and attorneys for the teachers agreed to meet Monday to try to reach a final agreement.

“We think something can be worked out,” said Ronald Rus of Irvine, the investors’ attorney.

“TMI bit their tongues and put their tail between their legs to put together this settlement,” said TMI’s attorney, David C. Grant of Newport Beach. “We want to resolve this.”

TMI was formed in 1968 by a group of educators and real estate specialists.

as a way for teachers to save for their retirement by investing in real estate. Some teachers saw 30% returns before the real estate market began to decline.