LAGUNA BEACH : County ‘Bird in the Hand’ Settlement OKd
Calling the county’s bankruptcy settlement plan “a bird in the hand,” the City Council this week accepted an offer that will net the city at least 85% of the money it had in the collapsed investment pool.
In approving Option A, the council agreed to accept a combination of cash and notes that will allow Laguna Beach to recover all but $1.2 million of the $7.5 million the city had in the pool when the county declared bankruptcy Dec. 6.
“This settlement makes a bad situation less bad,” Councilman Paul Freeman said.
Eventually, City Manager Kenneth C. Frank told the council, he expects the city to recover as much as 94% of the money it invested in the pool.
The council rejected Option B, which would have provided an initial cash disbursement while allowing the city to sue the county to recover more money.
To avoid “enormous legal expenses,” Frank recommended that the council endorse Option A.
The city has already incurred $24,000 in legal costs as a member of the investment pool committee, Mayor Kathleen Blackburn said.
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