Arbitrator Rules Firm Committed Fraud in TIC Deal
The Wall Street Journal reported that an arbitrator ruled that Grubb & Ellis committed fraud in tenants-in-common (TIC) deals that promised small investors a steady stream of income and tax breaks. The real estate company reported in its last quarterly report that it had been named in multiple claims and suits related to its investment programs.
The particular claim made the basis of this action involved a deal for an office building in Austin, TX that was purchased for investors in a 2005 TIC deal run by a company named NNN Realty Advisors, Inc. After NNN Realty merged with Grubb in 2007, it made Grubb one of the largest TIC managers in the industry. According to the article, the California arbitrator found that investors weren’t told in a timely manner about a structural flaw in the office building after it was purchased or that Grubb was negotiating an insurance settlement related to the flaw.
The lender on the building has filed a foreclosure notice and investors could stand to lose their entire investment, however, the arbitrator is expected in the next phase of the case to rule on what compensatory damages will be awarded, if any.
If you have suffered losses in TIC deals, please contact our securities law firm for a confidential, no obligation consultation at 1-800-259-9010.