Bad Break Up w/ Property Manager, help?

[Dwaine Allison]

So, in Arkansas I recently did a drop in (with 2 days notice) on 11 units on 4 properties. I was appalled and disgusted to find work not done, hazards present, grass overgrown, maintenance not done that was said to have been done, tenants complaining about lack of response.  I reviewed the financials and found some discrepencies and excessive charges.  The Property manager apparently wants to play hard ball and insists on holding me to the 30 day notice.  I believe I can clearly show neglect and danger to tenants.

He is holding my feserves, security deposits, and leases and HUD info from me, wants to impose rent collection for this month, saying "we need to settle up" on minor maintenance project. But he won't give me details.

I have a new manager who is willing and able to step in but of course doesn't want to get into a big legal fight.

What are your thoughts?