The state of California is suing the former nonprofit owner of a long-troubled low-income senior housing development in Chinatown in Atty. Gen. Rob Bonta made the announcement Monday.
The complaint alleges that the China Council on Aging and Housing Corporation and its CEO and president, Donald Toy, mismanaged Cathay Manor Apartments, a 16-story, 268-unit property, resulting in basic health problems. The lawsuit alleges that the company breached its fiduciary duty by failing to ensure safety. conditions. In recent years, city code and building inspectors have found faulty fire protection systems that keep elevators out of action for months at a time, effectively trapping many elderly and disabled residents indoors. I discovered that.
“CCOA Housing Corp. has completely failed in its mission,” Bonta said. “That’s not true. They misused the money. People, the elderly, the vulnerable, were hurt.”
The lawsuit was filed Monday in Los Angeles County Superior Court. The state is seeking a judge’s order dissolving the CCOA Housing Authority and appointing a receiver to manage its assets.
Toy’s lawyer could not be reached for comment.
Monday’s lawsuit is the latest in a series of lawsuits faced by the nonprofit and the building, which opened in 1984 as the neighborhood’s first federally subsidized low-income development. , was welcomed as a haven for aging Chinatown residents. But residents’ dissatisfaction with the situation has been going on for decades, and protests have intensified in 2021.
That same year, 186 residents filed suit against the owner for repairs to the building’s two elevators and laundry facilities, and the City of Los Angeles sued CCOA Housing Corp. and Toy for failing to maintain the building. He filed 16 misdemeanor criminal charges. The nonprofit and Toy deny the civil claims and criminal charges. Both lawsuits are pending.
The owners have agreed to pay a $1.5 million civil penalty and sell the Cathay Manor Apartments in early 2023 following a habitability investigation by the U.S. Department of Housing and Urban Development, according to a state lawsuit filed Monday. House of David Preservation, Inc., a Washington-based nonprofit, purchased the building in mid-2023 for $97 million. Under the terms of the deal, $27 million would be paid to the owners on the closing date, with the remaining $70 million to be paid in June 2025.
Bonta said the state’s lawsuit will ensure proper management of the nonprofit’s funds, including pending payments. The complaint alleges that Mr. Toy hand-picked board members who did not challenge his decisions and used the lack of oversight to transfer funds to nonprofits he controlled. The lawsuit alleges that seven years of federal tax returns, which Toy signed under penalty of perjury, listed the deceased nonprofit director’s name.
“We do not believe that the board, Mr. Toy and the other board members, can pay in line with its mission,” Bonta said.
In addition to the appointment of a receiver, the lawsuit seeks to transfer the proceeds of the sale to another charity and to account for all transactions between CCOA Housing Corporation and Toy, other directors and related entities. There is.
“The CCOA and its board have shown complete and utter disregard for the Chinatown community and the seniors who live in Cathay Manor,” said Los Angeles City Council member Eunice Hernandez, who represents the area. . “They cannot be allowed to profit from the sale of a building they have so badly mismanaged and neglected.”
