HUNTINGTON BEACH : City to Decide Friday on Settlement Option

The City Council has delayed until Friday--the county’s deadline--a decision on whether to accept a different settlement offer for the return of city money in the collapsed investment pool.

The council delayed a decision Monday and agreed to meet at 2 p.m. Friday. The county’s deadline is 5 p.m. Friday.

In April, the council accepted the county’s settlement offer of 77%, or $28.5 million, of their money by May 19. But the city retained its right to sue for the remainder, about $10.6 million.

Under the other county settlement option the council will consider, the city would receive 80% of its money now and the remaining at a later date. But the city would forfeit its right to sue the county.

“I’m not convinced that either position is superior to the other,” said Mayor Victor Leipzig on Monday. But he added, “There’s $10 million riding on this.”

Councilman David Sullivan also said choosing the other option is a “massive decision.”

“We just got a lot of (new) information and we all felt we needed more time--up until the deadline,” he said.

The city originally had about $43.6 million invested in the pool when the county filed for bankruptcy last December.

The city also filed a suit against Merrill Lynch, accusing the investment firm of violating state and federal securities laws by selling the county risky investments.