DALLAS – A $2 million settlement agreement has been reached in favor of the Dallas police and fire pension fund over real estate investments oversaw by an advisory firm.
The firm, CDK Realty Advisors, has been at the center of a lawsuit battle with the Dallas police and fire pension fund that claims it lost upwards of $320 million through its real estate management. The deal reached by the fund requires that the operators of CDK cooperate moving forward as the fund continues its efforts to recoup the monies lost through its unsuccessful real estate investments.
In a copy of the legal settlement obtained by The Dallas Morning News, CDK Realty Advisors reached a settlement of agreement of $2 million and paid no admittance of wrongdoing or liability for the actions that the Dallas police and fire pension funds alleged it was responsible for.
The cooperation by CDK Realty Advisors officials means the Dallas Pension System has the opportunity to further recoup losses to the fund by other commercial real estate firms it has hired. All three officials cited in the settlement agreement that would provide information or testimony if necessary for the court if they had any relationship with them through CDK.
According to The Dallas Morning News, CDK at one time managed more than $700 million for the pension fund, which at one time had more than $3 billion in assets in its possession.
Both CDK and the pension fund came to a crossroads when CDK filed a suit against the pension fund claiming that it failed to pay management fees. The pension fund fired back with a countersuit alleging that CDK was responsible for losses of $320 million. This was money that should have been earmarked for the Dallas police and firefighters and is now a deflated pension fund.
Through the settlement, CDK officers Kenneth Cooley, Jon Donahue and Brent Kroener will pay $800,000 to the insurer. All three provided in a copy of the settlement agreement obtained by The Dallas Morning News that their assets were only worth $100,000.
The office that CDK operated out of was also turned over as part of the settlement, which interestingly it shared with the pension fund. The real estate is valued at $1.2 million, according to The Dallas Morning News.
With the woes that the Dallas pension fund has seen, even more turmoil has occurred with large withdrawals upwards of $500 million made against the fund. There is a fear by Mayor Mike Rawlings that the fund will become insolvent at the rate that withdrawals are being made from it, which would eliminate the fund’s availability to fire and police retirees within 15 years. Rawlings filed suit against the fund’s board of trustees to stop the bleeding and put a restraining order in place.
With a new pension plan on the table, Dallas looks to increase the retirement age to 58 and also eliminate the multiplier that would essentially cut any cost of living raise for fire and police personnel for the next two decades. Rawlings isn’t enamored by the plan and said there is more work to do.
Proposals and request for votes on for the pension plan are due on March 10.