California Sues Nonprofit Over Troubled Housing Development for Low-Income Seniors
The state of California is suing the former nonprofit owner of a long-troubled housing development for low-income senior citizens in Chinatown, Atty. Gen. Rob Bonta announced Monday.
Mismanagement and Breach of Fiduciary Duties
The suit alleges that Chinese Committee on Aging Housing Corp. and its chief executive and president Donald Toy, mismanaged operations at Cathay Manor Apartments, a 16-story, 268-unit property, and breached their fiduciary duties by failing to ensure basic health and safety conditions.
In recent years, city code and building inspectors have found faulty fire-safety systems and elevators inoperable for months at a time, effectively trapping many elderly and disabled residents inside.
State’s Demands
The state is seeking a judge’s order to dissolve CCOA Housing Corp. and the appointment of a receiver to manage its assets.
Recent History of the Development
Mondays’ litigation is the latest in a battery of court actions facing the nonprofit and the building, which was hailed as a haven for aging Chinatown residents when it opened in 1984 as the first federally subsidized low-income development in the neighborhood.
But residents’ complaints about conditions have persisted for decades, with protests intensifying in 2021.
Previous Litigation
In 2021, 186 residents filed a lawsuit against the owner seeking repairs to the building’s two elevators and laundry facilities, and the city of Los Angeles filed 16 misdemeanor criminal charges against CCOA Housing Corp. and Toy alleging failures to maintain the property.
The nonprofit and Toy have denied the civil allegations and criminal charges. Both cases remain pending.
Recent Sale of the Property
In early 2023, the owner agreed to pay $1.5 million in civil penalties and sell Cathay Manor Apartments following a habitability investigation by the U.S. Department of Housing and Urban Development, according to the state suit filed Monday.
A Washington-based nonprofit, House of David Preservation Inc., purchased the building for $97 million in mid-2023. Terms of the deal called for $27 million paid to the owner on the closing date with the remaining $70 million due in June 2025.
Conclusion
The state’s case aims to ensure proper management of the nonprofit’s funds, including the pending payment, and to hold accountable those responsible for the mismanagement and breach of fiduciary duties.
FAQs
Q: What is the state suing the nonprofit for?
A: The state is suing the nonprofit for mismanaging operations at Cathay Manor Apartments, a 16-story, 268-unit property, and breaching their fiduciary duties by failing to ensure basic health and safety conditions.
Q: What is the state seeking in the lawsuit?
A: The state is seeking a judge’s order to dissolve CCOA Housing Corp. and the appointment of a receiver to manage its assets.
Q: What is the history of the development?
A: The development was hailed as a haven for aging Chinatown residents when it opened in 1984 as the first federally subsidized low-income development in the neighborhood. However, residents’ complaints about conditions have persisted for decades, with protests intensifying in 2021.
Q: What is the state’s goal in the lawsuit?
A: The state’s goal is to ensure proper management of the nonprofit’s funds, including the pending payment, and to hold accountable those responsible for the mismanagement and breach of fiduciary duties.
