2 Cities Accept County Settlements : Bond crisis: Buena Park, Huntington Beach agree to accept 76% of their investments. They vow to sue for the remainder.

Huntington Beach and Buena Park on Monday became the latest investors in the county’s collapsed pool to accept a settlement offer, agreeing to take 76% of their money now but vowing to gain the remainder through litigation.

“The council is not happy with any of the options,” Huntington Beach Mayor Victor Leipzig said, “but we could not in good conscience risk the loss of $30 million of Huntington Beach taxpayers’ money.”

Huntington Beach’s acceptance of the settlement proposal is considered significant because city officials have been among the most vocal in demanding the return of 100% of their money.

The city had about $43.6 million invested in the pool when the county filed for bankruptcy Dec. 6, far less than nearby cities such as Irvine, which had invested more than $200 million.

Yet Huntington Beach was the first city to file suit against Merrill Lynch, accusing the Wall Street giant of selling the county risky investments in violation of state and federal securities laws. The county also is suing Merrill Lynch, which has denied any wrongdoing.

Huntington Beach also has asked the U.S. Bankruptcy Court to lift a ban on litigation so that it can pursue a claim against the county in state court.

By accepting the county’s settlement offer, both cities will receive 76% of their investment immediately while reserving the right to sue for the remainder. Under another option offered by the county, the city would have received 80% of its money by June 5 with the rest promised sometime in the future. But under that option, the city also would give up its right to sue.

The cities also could have rejected any settlement and tried to recover all their money through litigation.

Buena Park’s unanimous vote Monday means the city will get 76% of its $18-million investment. But the same council then voted 4 to 1, with Councilwoman Patsy Marshall dissenting, to reject any settlement for an additional $10.5 million that the city’s Redevelopment Agency had invested and to sue to get all of that money.

City Manager Kevin O’Rourke said city needs the money from the first investment in the short-term, but that the Redevelopment Agency can better afford a prolonged litigation for its money.

Buena Park will ask the Bankruptcy Court on Friday to freeze the $10.5-million investment in the county pool. If the court refuses, the council then will settle with the county for 76% of it and sue for the rest, the City Council decided Monday.

Huntington Beach Councilman Ralph Bauer said before that City’s Council meeting that it would be irresponsible for the city not to accept this settlement offer. “This money belongs to the taxpayers,” he said. “We have to exercise some financial sense here and take what we think we can get.”

Nearly 200 agencies have money in the $5.7-billion investment pool.