Casden to Settle Investor Lawsuit
Developer Alan I. Casden, who wants to buy the Los Angeles Dodgers, agreed to settle for $83 million a lawsuit brought by former investors in a series of limited partnerships he ran, according to a regulatory filing.
The settlement could give a boost to Casden’s bid to buy the baseball team. Team owner News Corp. is reportedly negotiating exclusively with Tampa Bay Buccaneer owner Malcolm Glazer, but at least two other bids remain on the table.
Casden, a Beverly Hills-based apartment developer, agreed to deposit $29 million in an escrow account to pay investors upon court approval of the settlement.
In April, a federal judge reduced the damages a jury had ordered Casden Properties Inc. to pay, from $184 million to about $120 million. Casden and associates were found guilty in November of violating federal securities laws and breaching their fiduciary duties.
The parties to the settlement agreed not to comment beyond the report filed Monday with the Securities and Exchange Commission by Casden Properties’ parent, Apartment Investment & Management Co., also known as Aimco, said Barbara Casey, a spokeswoman for Casden.
The filing said Casden agreed to transfer $19 million of Aimco stock and issue $35 million of promissory notes to National Partnership Investments Corp., which will then issue that $35 million of notes to be paid to the investors in his limited partnerships who sued him.
The lawsuit, filed in 1998, charged that Casden Properties unlawfully made misleading statements in seeking investors’ votes to approve a transfer of ownership in 98 apartment-complex partnerships.
In addition to Casden -- who owned National Partnership Investments, the managing general partner for the investors group -- other defendants were his brother Henry Casden, Bruce Nelson and Charles Boxenbaum. The three were officers or directors of National Partnership.
The apartment-complex transaction transferred ownership of the complexes to Casden Properties.
Casden Properties is owned by Denver-based Aimco, which bought closely held Casden in March for more than $800 million. Aimco isn’t liable for the award.
The 57-year-old Casden is listed on the Forbes 400 list of wealthy Americans with an estimated net worth of $800 million. He has developed or acquired about 90,000 apartment units, mostly in Southern California, since the 1970s. In addition to building market-rate apartments -- including a luxury project next to Park La Brea in Los Angeles -- Casden has been heavily involved in developing affordable housing financed in part with tax credits.
Casden is believed to have made the highest bid for the team: $450 million. The offer from Buccaneer owner Glazer is said to be about $400 million. A third bid is from radio entrepreneur Jeffrey Smulyan.
Casden’s legal troubles were frequently cited by baseball industry observers as an impediment to his acquiring the team. He has declined to comment on his bid to buy the Dodgers.
