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INDIANAPOLIS – A Marion County judge delivered a significant setback to tenants who live at the troubled Lakeside Pointe apartment complex.

The ruling, handed down earlier this week, denied a request from the Office of Indiana Attorney General Todd Rokita to appoint a receiver to take control of the company that manages the property.

The decision came after a pair of hearings in July and August.

In July, Rokita’s office filed a lawsuit alleging that mismanagement led to poor living conditions for residents. The lawsuit accused Aloft Mgt, LLC and Fox Lake AHF, Inc. of “allowing the Fox Club and Lakeside Pointe apartment complexes in Indianapolis to fall into egregious disrepair, endangering the health and welfare of thousands of residents.”

Rokita’s office said “neglect and mismanagement” led to fires, a lack of heat and air conditioning, water damage, mold, broken windows, and other problems that resulted in poor living conditions.

Instead of appointing a receiver, Judge Patrick Dietrick called for mediation within 120 days and stayed the pending litigation. Dietrick said the state failed to meet its burden of proof.

From his conclusion:

The Court finds that the State has failed to carry its heavy burden warranting the issuance of injunctive relief and the appointment of a receiver. Even if the State had authority to bring this action and could assert a sustainable cause of action for the requested relief – which this Court finds it did not – the State failed to present sufficient evidence of the claims alleged to meet its burden in demonstrating entitlement of the extraordinary and drastic relief sought. In all respects, the State’s Motion is DENIED.

In so finding, the Court is not giving short shrift to the concerns or issues raised by those witness-tenants who testified at the Hearing; however, such testimony is insufficient to support the State’s relief as requested.

Rokita released a statement about the ruling that said his office welcomed a mediated resolution:

Under the limited authority for intervention in this matter provided by state statute, our investigation and lawsuit pushed the lender to take notice of the condition of the apartments and the lack of repairs by the defendants. We will continue to investigate and assist in this case as needed, fighting for change for the hundreds of Indiana families affected by the defendants’ neglect over the years. We welcome mediation, but we suggest that all parties stay vigilant of the real conditions on the ground at the complexes.