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HEARTHSTONE MANAGEMENT FILES DEFAMATION LAWSUIT AGAINST NEW JERSEY TENANTS ORGANIZATION

 LAWSUIT CITES TENANTS ORGANIZATION'S INTENTIONAL AND MALICIOUS
 DISREGARD FOR TRUTH
 NEWARK, N.J., April 14 /PRNewswire/ -- Hearthstone Management Group, Ltd. filed suit in the United States District Court for the District of New Jersey today against the New Jersey Tenants Organization ("NJTO") and the Housing Coalition of Central Jersey ("HCCJ"). The suit which also names NJTO President Michelle Rupar and NJTO representative Seth Grodofsky seeks damages for acts of defamation in regard to false statements concerning Hearthstone's management practices.
 In committing the acts of defamation, the NJTO "intentionally, maliciously, negligently, with knowledge of the falsity of their statements, and with reckless disregard for the truth" accused Hearthstone of involvement in misappropriating security deposits and attempted to place blame on Hearthstone for maintenance violations that occurred prior to its tenure as property manager. Additionally, the NJTO continues to willfully misrepresent Hearthstone's relationship with the former property managers.
 "The NJTO should be ashamed of themselves," stated Hearthstone Chief Operating Officer Paula Phillips. "They know their charges are not true. I can only assume that they were made in error or as a willful attempt to distort the facts in order to grab headlines, increase membership and seek contributions to the organization."
 On February 11, 1993 Hearthstone took over management of 22 residential properties in New Jersey from MLG Management ("MLG") and its owner, Morton L. Ginsburg. Since then, Hearthstone has worked diligently to rescue these properties from a decade of mismanagement and neglect. Hearthstone has spent over $1.5 million for new roofs, doors, boilers and windows, as well as fire and safety repairs. Ironically, none of these significant improvements, all of which the NJTO is fully aware, have been mentioned in any of its public statements about Hearthstone.
 Soon after assuming management, Hearthstone discovered that MLG had failed to comply with New Jersey security deposit requirements at several of the properties. Despite having full knowledge that Hearthstone had no involvement in these missing security deposits, the NJTO continues to seek to harm Hearthstone by misrepresenting the facts. Both MLG and Morton L. Ginsburg remain contractually prohibited from any involvement in the management of any of the properties in question or Hearthstone in general.
 Contrary to NJTO's false statements, since taking over management of the properties, Hearthstone has made substantial progress in rectifying all the problems it inherited regarding tenant security deposits. Through a series of tenant negotiations, including many in which the NJTO was directly involved, Hearthstone has been able to substantially replace all of MLG's missing security deposits by either direct payment, a 1-1/2 month rent rebate or a rent credit paid over 18 months. In an effort to be honest and open with their tenants, Hearthstone Management has met frequently with representatives from the NJTO to address the concerns of its leadership and members. Representatives of Hearthstone have held more than 25 organized tenant meetings in the last year.
 "The facts fully contradict the lies of the NJTO," Phillips further stated. "Hearthstone has set up the mechanism to replace all missing security deposits and we continue to aggressively repair a decade of MLG's property neglect. All of this has been done under difficult circumstances, including the worst winter in twenty years, and insufficient record keeping by prior management."
 Phillips added, "Hearthstone has brought responsible and professional management to these properties. To augment our staff, we have hired almost one hundred professional managers, superintendents and maintenance personnel to effectively administer these properties. In one year, Hearthstone has substantially paid all back taxes and utility bills owed by the former management. At the same time, we have corrected thousands of state and local violations working closely with town officials and tenant associations to address their concerns."
 In addition, Hearthstone has deferred 100 percent of the management fee to which it is entitled and reinvested it back into property maintenance throughout the properties. "Everyone wishes we could wave a magic wand and correct the thousands of problems we inherited at these properties all at once. However, that is impossible. As the NJTO knows from our progress meetings with that organization, we have been working around the clock to address as many problems as possible," said Phillips.
 "Regardless of what has been said and despite all efforts of organizations such as the NJTO to discredit Hearthstone's accomplishments, our commitment to ethically and professionally manage our properties will not be swayed," concluded Phillips.
 -0- 4/14/94
 /CONTACT: Stephen Reid/Michael Kempner of MWW/Strategic Communications, 201-342-9500/


CO: Hearthstone Management Group, Ltd.; New Jersey Tenants
 Organization; Housing Coalition of Central Jersey ST: New Jersey IN: SU:


CB -- NY130 -- 7628 04/14/94 17:45 EDT
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Publication:PR Newswire
Date:Apr 14, 1994
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