HUNTINGTON BEACH : City Marks Funds for Bankruptcy Counsel
The City Council has agreed to pay up to $200,000 to a San Francisco-based law firm to assist the city in legal matters resulting from the county bankruptcy.
The city’s tab to Poppin & Shier through February is already about $152,000, according to a report to the council this week from City Atty. Gail Hutton.
The council Monday voted 6 to 0, with Councilman Ralph Bauer absent, to spend another $50,000 for the outside legal services, for a total expense of about $200,000 since the bankruptcy firm was hired Dec. 19.
Hutton said the additional $50,000 is needed so the law firm can continue the extensive work related to the bankruptcy and the filing of legal documents on the city’s behalf.
Poppin & Shier was hired to assist the city in recovering its $43.6 million in the frozen county investment pool.
City officials have filed a motion in U.S. Bankruptcy Court asking a judge to allow them to sue the county in state court for money held in the pool. The city contends that the county was the trustee of the city’s money, and that the city should therefore be repaid 100% of its money. The case is expected to be heard today0 in U.S. Bankruptcy Court in Santa Ana.
The city has also filed a federal, class-action lawsuit against Merrill Lynch & Co. and related Merrill Lynch entities, alleging that the brokerage violated state and federal securities laws in its dealing with the county’s investments.
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