TUSTIN : City Gives Up Right to Sue County on Pool
The City Council has decided to switch from so-called Option B to Option A of the settlement offer for participants in Orange County’s ill-fated investment pool.
Under Option A, Tustin would be reimbursed for about 80% of its pool investment with a combination of cash and recovery notes and may receive additional funds at a later date. However, the city would waive its right to sue the county for investment losses under this plan.
Under Option B--which the council originally backed to express anger and frustration to county officials--the city would receive a cash settlement of about 75 to 76 cents on the dollar and would retain its litigation rights.
The City Council voted 3 to 2 Monday to change plans, with Councilmen Michael J. Doyle and Jeffery M. Thomas dissenting.
Council members who supported the change to Option A argued that it does not make financial sense for Tustin to pursue a costly lawsuit against the county. Tustin officials had pulled the city’s $4 million in principal out of the investment pool last spring, and had just $184,000 in accrued interest remaining in the pool when the county filed for bankruptcy Dec. 6.
“I want to get the money in hand and not pay any more attorney fees,” said Mayor Jim Potts. He was joined by Council members Tracy Worley and Thomas R. Saltarelli in backing Option A.
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