In Business This Week
VMS REALTY PAYS OUT JUST 7~ ON THE DOLLAR
It seems like a paltry return for the more than 20,000 people who invested $1.2 billion in limited partnerships managed by VMS Realty Partners and sold in large part by what was then called Prudential-Bache Securities. According to a settlement approved on July 2, investors will split a $24.6 million cash settlement, plus a small cut of future asset sales. That works out to perhaps 7~ on every $1 invested in the highly leveraged real estate investments that the Tax Reform Act of 1986 all but wiped out.
The payout breakdown is as follows: $20 million from Prudential, $1.1 million from VMS, and $3.5 million from Mutual Benefit Life Insurance. The former officers of VMS aren't required to contribute to the payout fund and are freed from personal liability for the VMS failures.EDITED BY HARRIS COLLINGWOOD