Denver trust sued over toxic molds in apartments

February 9, 2002

Denver trust sued over apartments

By Janet sey

Dow News Service

Thursday, February 07, 2002 -

NEW YORK - A lawsuit seeking more than $100 million in fines has been filed

against a Denver real estate investment trust over toxic mold and other

hazardous conditions at four apartment complexes in San Francisco.

The suit was filed last week by the San Francisco city attorney's office

against Apartment Investment & Management Co. after the concern failed to

make ordered repairs to 21 federally subsidized apartment units by specified

deadlines. The suit seeks damages of $7,500 a unit per day over a two-year

period for a total of about $115 million.

This $115 million represents about $1.11 a share in AIMCO's funds from

operations. However, analysts and company executives said it's highly

unlikely AIMCO will be ordered to pay that amount.

" It's extremely unlikely anything even near that number " will be awarded,

said Salomon Barney analyst . He speculated the figure

was used to " catch the eye " to ensure the repairs are acted upon quickly. He

also said damages likely would be well under $1 million, or 1 cent a share,

if there are any at all. (Analysts surveyed by Thomson Financial/First Call

peg the company's 2001 funds from operations at $5.21 a share).

Miles Cortez, AIMCO's general counsel, describes the figure as " excessive "

and " draconian. "

" To my knowledge, I've never heard of such a fine imposed on anybody, " he

said.

Cortez, who was in San Francisco on Tuesday to meet with city officials,

said AIMCO is committed to making the repairs, and he hopes to have the

matter resolved before the end of the month.

City inspectors had been requesting the repairs for about two years. The

problems include complaints of toxic mold, dry rot, leaky plumbing and poor

ventilation.

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