Dallas Police and Fire Pension Wins a $2 Million Settlement From Investment Firm

The Dallas police and fire pension fund has won a settlement worth at least $2 million from an advisory firm that officials blame for some of the fund’s disastrous real-estate investments.While the money will not come close to covering the $320 million in losses the fund blames on the firm, the deal requires the men who ran the firm to cooperate as the fund goes after others who profited while it lost hundreds of millions of dollars.The Dallas Morning News obtained a copy of the legal settlement between the fund and a major consultant, CDK Realty Advisors, using an open-records request. A court approved the settlement earlier this month but terms were not disclosed.City officials, who complain they had little control over the fund’s activities but are now being forced to find a way to bail it out, had mixed reactions to the settlement.“We need every dime possible coming into the fund, especially from those that played a role in its downfall,” Mayor Mike Rawlings said in a statement. “This settlement appears to be a small step in the right direction, though I still hope to see more transparency and details about the scope of the alleged wrongdoing by CDK.”Lee Kleinman, a City Council member and former member of the fund’s board, said he was “shocked CDK got off the hook for a mere $2 million considering the amount of fees they bilked out of the system over the past decade.”But others highlighted the importance of getting CDK’s cooperation. “We could have hammered these guys a lot harder perhaps” by taking the matter to trial, said Philip Kingston, another city councilman who serves on the fund’s board. “But getting their cooperation to chase down other potential sources of recovery I think was really important.”The fund’s top staffer, Kelly Gottschalk, whom the board hired in 2015, declined to comment on the settlement.A lawyer for CDK stressed Monday that the settlement is not an “admission of any wrongdoing or liability for any claims.”“CDK Realty Advisors was one of several commercial real estate managers hired by the Pension System,” Steven A. Schneider said in a statement. “CDK was not involved in or responsible for the design and construction” of the controversial Museum Tower in the city’s Arts District. He said the firm was also not involved in the fund’s high-profile investments in luxury homes in Hawaii and a resort and vineyard in Napa County, Calif.  Continue reading...

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