O.C. WATCH Ryan’s Express

It is a sign of Orange County’s financial desperation that so much important action has been taking place in bankruptcy court. Five months after seeking relief following the collapse of its investment fund, the county was back in court this week on a somewhat more promising mission.

Thankfully, U.S. Bankruptcy Judge John E. Ryan signed off on a plan to distribute $5.7 billion to more than 200 cities, schools and government agencies, an action that will help prevent domino-style bankruptcies or municipal defaults.

There are still many miles to travel. Any plan such as this one is bound to make people unhappy; it pays investors only 77 cents on the dollar, along with recovery notes convertible to cash at a future date and IOUs. However, the majority of pool participants recognize that they and the county are in no position to expect more now.

The hope that somehow other pieces of the puzzle will fall into place persists. The money for the recovery notes beyond the promised 77 cents on the dollar is not yet in position, and some school districts are counting on a 90% restitution to meet their school budgets this summer. The county has bond payments coming due at that time, too.

Nevertheless, the agreement represents a willingness by many to compromise for the common good. Such cooperation and unity of purpose have been in short supply during the bankruptcy crisis. More of that spirit is needed as Orange County moves forward.