Residents sue Palo Alto senior living facility for taking money

A lawsuit charges that Vi at Palo Alto transferred $190 million in refundable entrance fees to its parent company.
February 20, 2014 7:29:08 PM PST
People living in an upscale Palo Alto senior residence are suing the company that runs it. They say that company has siphoned off their money. Among those living at Vi senior living is a Nobel Prize winner.

Among the notables living at the Vi is former Defense Secretary William Perry. The lawsuit is over 600 pages long.

"We have to do something about what I consider to be serious misbehavior," said Dr. Burton Richter, a Vi at Palo Alto resident.

Richter is a Nobel laureate and former Stanford physics professor. He's one of the 500 residents of a luxury senior living complex who filed a class action lawsuit. It charges that Vi at Palo Alto transferred $190 million in refundable entrance fees to its parent company, CC Chicago. Those are fees that would otherwise go to residents when they move out or to their heirs if they die.

Attempts to resolve the issue privately failed. Richter still gets angry when he recalls what the company's lawyer told them.

"'We always see that people get paid, but we have no legal obligation to do so.' That was her exact words. That's crazy," said Richter.

Richter is becoming increasingly worried because he says the company is in the red. Company spokesman Sam Singer said, "Vi at Palo Alto has a successful history of repaying every entrance fee to every resident. We've paid $121 million since our inception. We have zero bank debt."

The lawyer for the residents sees it differently. Niall McCarthy said, "Right now, what we have is empty promises and what we need is security."

Residents say they have a lot to lose. The entrance fees are stiff. Richter paid $1.5 million and that was nine years ago when he moved in.

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