ORANGE : County Bankruptcy Settlement Offer OKd
City Council members have voted to accept a county bankruptcy settlement offer that Mayor Joanne Coontz called the “lesser of three evils†confronting the city.
Under Option A, which the council selected Monday, the city would receive just over 76 cents on the dollar of the $28.2 million it had in the county’s collapsed investment fund. Another 4 cents on the dollar would be returned in the form of “recovery notes†that the county has promised will be as good as cash by June 5. Nine cents on the dollar more may come from litigation the county is pursuing against the Merrill Lynch brokerage firm.
The county promises to devote its best effort repaying the last 11 cents, according to a breakdown presented by Finance Director Ann Marie Gallant at a special meeting Monday.
The agreement requires that the city relinquish its right to sue the county for more money.
Option B would have returned the 76 cents in cash and given the city the option to sue for the rest. A final option amounted to virtually rejecting the agreement.
By accepting Option A, the city will get $21.5 million if the plan is accepted by the Bankruptcy Court and another $1.1 million by June 5--if the recovery notes turn out to be “as good as gold,†as county officials have said.
“Option A is the lesser of three evils,†Coontz said in a prepared statement. “Overall, whether you choose A, B or C, this is a hostage plan. We are not convinced that the county organization and the unincorporated areas are prepared to assume their fair share of the crisis financially.â€
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