The Virginia Retirement Systems, Richmond, has sued Eastdil Realty Inc. for $1.5 million, alleging the New York-based adviser misled the pension fund about the presence of asbestos in a Charlotte, N.C., office building it recommended for investment.
In 1986, Eastdil recommended the retirement system lend $10.5 million to Charlotte-based Associated Realty Investors to be secured by One Tryon Center, the office building. According to the suit, the approval was conditioned upon an inspection and report finding the building free from asbestos or asbestos-related materials.
A report by a firm hired by Eastdil to search for asbestos concluded "an inspection above the ceilings and in various locations on each of the 20 floors was made and nothing was found to contradict Realty Investors' representation."
Associated Realty Investors claimed the building was gutted of all asbestos during a 1981 renovation. Eastdil incorporated the inspector's report in its final recommendation to the retirement system.
In 1992, after Associated Realty defaulted and the VRS foreclosed on the building, another inspection revealed the presence of asbestos.
The fund filed the lawsuit in Circuit Court for the City of Richmond.
In addition to Eastdil, the retirement system has sued Lee, King, Poole & White of Richmond, the first asbestos inspector. Others being sued by the fund are Associated Realty Partners; Synco Inc. and Investment Partners, North Carolina corporations listed as general partners of Associated Realty; and V.R. Snider, Kenneth P. Forrester Jr. and Bernice Jones, general partners of Associated Realty.