Following a rigorous investigation, California Attorney General Rob Bonta has taken legal action against C.C.O.A. Housing Corporation, filing a lawsuit with the intent to dissolve the nonprofit accused of gross mismanagement, particularly with regards to its handling of Cathay Manor, a senior living facility. The aim of the lawsuit, announced by the Office of the Attorney General, is not only to dissolve the corporation but also to redirect the substantial proceeds from the recent sale of Cathay Manor towards another charity that provides affordable housing for seniors in the Los Angeles area.

With a history stretching back to 1979, C.C.O.A. Housing Corporation has been at the helm of Cathay Manor, financed by the U.S. Department of Housing and Urban Development to offer low-income housing to senior citizens; many of its residents are physically impaired, necessitating the use of wheelchairs or walkers, yet they faced deplorable living conditions under the corporation's stewardship, leading to the eventual forced sale of the building due to what Attorney General Bonta described as "pervasive and persistent mismanagement." According to a release from the Office of the Attorney General, Bonta declared, "There is simply no denying that C.C.O.A. Housing Corporation and its board members failed our seniors miserably when they operated Cathay Manor."

U.S. Representative Jimmy Gomez and Los Angeles City Councilmember Eunisses Hernandez have both vocally condemned the corporation's actions; Gomez, who had urged the investigation, expressed his satisfaction at the Attorney General's decisive steps toward accountability in a statement made by the Office of the Attorney General, saying, "For years, I’ve heard from Cathay Manor residents about the unacceptable conditions they’ve faced," while Hernandez highlighted the betrayal of trust C.C.O.A. demonstrated to the Chinatown community and emphasized the necessity of preventing them from benefitting from the Cathay Manor sale.

The abysmal state of the facility under C.C.O.A's governance is underscored by the fact that residents were trapped in their apartments when elevators broke down and integral fire safety systems were left out of code; these are just some of the infractions outlined by Bonta, alleging that Gong Donald Toy, the corporation's longstanding President and CEO, and board members Janet Lim, Sing Foo, and Jimmy Victoria, neglected their fiduciary duties and failed to provide the legally required oversight and maintenance. Moreover, Bonta claims Toy and the others formulated no clear plan for the use of future funds for low-income housing, despite C.C.O.A being due a further sum of $70 million in June 2025 from the building's sale – a staggering figure intended for a restricted bank account per the conditions stipulated by the Attorney General's office, as Bonta chastised the board members for their lack of diligence and transparency, alleging "They cannot be trusted to do the right thing."