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ATLANTA-Ronald S. Leventhal, director of Interfinancial Properties Inc. in Marietta, GA and a Post Properties Inc. shareholder, has filed a new federal court brief challenging the accuracy and intent of Post’s June 28 press release on the sale of six apartment complexes in Atlanta and Orlando.

Leventhal filed the brief to support his previous request to US District Judge Jack T. Camp to start the discovery phase of the lawsuit. The judge already has signed an order which gives Leventhal access to certain confidential accounting data at Post.

The suit alleges Leventhal and other shareholders have lost “tens of millions of dollars” in company value through corporate mismanagement by Post executives. Leventhal is suing Post directors “on behalf of all other similarly situated shareholders,” according to the filing.

In his newest filing, Leventhal alleges the six apartment communities containing 3,008 units that were sold to Chicago-based JRC Acquisition Corp. for $197 million, or $65,492 per unit, were far below replacement cost–information that was allegedly not provided to shareholders.

The court-filed brief states, “Leventhal believes that evidence will likely confirm that discovery is needed in order to confirm that the property maintenance and renting or leasing of the various apartment properties, would result in a far greater sale price, but that without regard to the interests of the shareholders, the sales were effectuated to streamline the company’s operation in certain markets as part of what may be a clandestine plan to sell Post as a whole, so that the recently awarded ‘Golden Parachutes’ and other perks ‘kick in’ for the benefit of those defendants and to the detriment of the shareholders.”

On the apartment sales deal itself, Leventhal’s brief states Post “admits relinquishing very favorable debt financing at a 1.6% interest rate. Leventhal believes that relinquishment was part of the purchase price, although the June 28 press release falsely claims otherwise, using the phrase, ‘the buyer also assumed approximately $104 million (of tax-exempt mortgage indebtedness encumbering five of these properties). These low-floater tax-exempt bonds carry a variable interest rate which on May 31, 2004, including bond fees, was approximately 1.7%’.”

The brief states the Post press release “proudly announced that they (company directors) achieved a sale price at 6.6% as a capitalization rate. They announced that (figure) was based upon the trailing years’ income. While to most people in the industry, 6.6% would appear to be a favorable rate, clearly, the sale by the defendant’s own admissions, was for 23% less than the replacement cost.”

Additionally, the brief states, “If the 1.6% interest rate debt financing is factored into the equation, it is likely a 12.5% capitalization rate was only obtained. That could represent a factor of eight times trading net income. If true, that means the June 28 press release was grossly misleading. Given the touted caliber of the defendants, such an error would only occur, with scienter (knowingly transacting a fraudulent securities deal.)”

Leventhal’s brief alleges “the various properties by Post that were recently sold have been sold for approximately $30 million less than previously announced by Post, as the estimated sale price.” The brief states Post president and CEO David P. Stockert “admitted $30 million less during the May 4 shareholder analyst quarterly conference call and then when questioned about it during the May 27 shareholders meeting, said it was apparently $2 million, or so.”

Stockert did not respond to a GlobeSt.com telephone request to his office for comment in this article.

Leventhal’s lawsuit names as defendants Stockert; Robert C. Goddard III, Post chairman; Thomas D. Senkbeil, executive vice president and chief investment officer; Sherry W. Cohen, John T. Glover, Christopher J. Papa, Thomas L. Wilkes and the Post Properties Inc. corporation.

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