Judge Won't Junk Hedge Funder's Discrimination Lawsuit Against Dakota

Aug 1 2011 | 12:35pm ET

Hedge fund manager Alphonse Fletcher can proceed with his lawsuit against the legendary apartment building in which he's lived for almost 20 years, a judge has ruled.

State Supreme Court Justice Eileen Rakower dismissed Fletcher's claims against most of the individual board members named in the lawsuit against the Dakota Apartments, the famed co-op perhaps best known as the former home of John Lennon and the site of his murder. But she refused to dismiss claims of discrimination, defamation, breach of fiduciary duty and retaliation against both the building and two board members, including its president.

Fletcher in February filed suit against the Dakota after it rejected his bid to buy an apartment next to his current home to give his family more room. The Dakota said it was concerned about Fletcher's finances, but Fletcher, who himself once served as president of the co-op's board and who is black, alleged that the building routinely discriminates against African-Americans and other minorities, both those who hope to buy an apartment in the building and those who already have them.

Since the filing of the suit, Fletcher's hedge fund, Fletcher Asset Management, has found itself in some hot water that could give the Dakota more ammunition. Three Louisiana public pension funds opened an investigation into the firm after it handed out IOUs in lieu of cash redemptions. The Securities and Exchange Commission is also probing the firm.

In a statement, the Dakota's board pronounced itself pleased that Rakower "dismissed all claims against most of the defendants" and "confident that the court will ultimately find that the board of the Dakota and its officers acted appropriately."

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