Published: Saturday, Jun. 18, 2011 – 12:00 am | Page 6B

A lawsuit that says CalPERS was duped on a huge Southern California land deal has been dropped.

The California Public Employees’ Retirement System lost $922 million on its investment in LandSource Communities Development.

LandSource went into bankruptcy protection in 2008. After the case was largely wrapped up, a “liquidating trust” was established to represent lenders still owed money.

The trust last summer sued a firm called LNR Property Corp., claiming LNR and home builder Lennar Corp. duped CalPERS and its partners. LNR and Lennar sold stock in LandSource to the CalPERS group in 2006.

Lennar wasn’t a defendant in this suit because it had already been released of all liability in the bankruptcy. Earlier this month, the liquidating trust dropped the suit without explanation.

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