County’s Pool Settlement Offer Is on Verge of Success : Recovery: Minimum requirements can be met if agencies meeting today all approve the agreement.

Today could be the crucial day for a proposed settlement agreement that bankrupt Orange County has offered some 200 local schools, cities and other agencies with money in its collapsed investment pool.

Though investors have until next Tuesday to say yea or nay to the deal, the agreement will likely gather the necessary support by day’s end if councils and boards throughout the county vote as expected.

“It’s amazing how fast this process has come together,” said M. Freddie Reiss of Price Waterhouse, one of the financial advisers to the committee representing pool participants. “People really want to get on with life.”

Along with lawyers for the committee and several business leaders who helped broker the deal, Reiss has spent the last several weeks traveling the county to persuade school boards, city councils and special district officials to approve the agreement. Representatives from all the agencies are invited to a final question-and-answer session this afternoon at Irvine City Hall.

“There still is very, very significant distrust of the (county) supervisors,” among agency officials, Reiss said. “People originally wanted to act emotionally, but then they realized they should put the venting aside and get their money out. Most people are relieved the deal got done and they can get the money out.”

School districts, cities and other investors could get back most of their cash by mid-May, if everything goes according to schedule.

For the proposed deal to go through, it must be accepted by 80% of the agencies that controlled 90% of the non-county assets in the pool when the county filed for bankruptcy protection Dec. 6. That means investors with a total of $4.4 billion as of that date must sign on before the Tuesday deadline.

Making the task easier is the fact that more than $207 million of that money belongs to community facilities districts controlled by the County Board of Supervisors. The supervisors are not scheduled to vote until Tuesday, but their support of the deal is virtually guaranteed because they, in effect, are proposing it.

That brings the amount needed for approval down to $4.201 billion.

By Tuesday afternoon, agencies controlling more than $3 billion had voted to approve the settlement, according to calculations by The Times. Another $491 million was at stake in meetings Tuesday night, which could bring the total to $3.5 billion.

Boards scheduled to vote today have $621 million in pool assets. If all of them approve the deal, it would have the support of agencies controlling $4.203 billion, just above the necessary threshold, according to the calculations.

The tally of individual agencies that have approved the settlement is lagging slightly behind the dollar figure because many of the largest investors have been quicker to approve the settlement.

In all, there were 229 entities with accounts in the pool Dec. 6; 183 must sign on for the deal to be approved. Sixty of the investing entities are the districts controlled by the supervisors, so the key threshold is actually 123.

By Tuesday, about 100 had given the nod, and as many as 119 will be on board if Tuesday night’s and tonight’s votes go as expected, a review by The Times shows. Many smaller investors--particularly school agencies--have vowed to support the deal but have not voted.

Once a sufficient number of investors sign the deal, it must also pass muster before U.S. Bankruptcy Judge John E. Ryan, who will preside over a hearing on its fate May 2.

The vast majority of the agencies to vote so far have selected Option A, which would return about 77% of their investment in cash, another portion in so-called “recovery notes” that the county promises to cash by June 5, and the rest in a series of IOUs. In exchange, the agencies promise not to sue the county for more.

Four cities--Buena Park, Montebello, Tustin and Yorba Linda--have elected Option B, in which they receive just their 77% in cash but reserve the right to go to court in an attempt to recover the rest.

Only one investor, the Buena Park Redevelopment Agency, has rejected the settlement outright, choosing an option that gives it no reimbursement but allows the agency to pursue litigation on the theory that the county held its money in trust and must return every penny before taking anything for itself.

“Whenever you’ve got a group this big, you can’t expect total consensus. Does it surprise me that somebody’s hanging out? No,” shrugged Bruce Bennett, the county’s lead bankruptcy attorney.

“This deal,” Bennett added, “is good for everybody.”

Times correspondent Shelby Grad contributed to this report.