Countywide : Court Will Review Communications Deal

Ericsson Inc.’s long dispute over the county’s award of an $82-million emergency communications system contract to rival Motorola will be able to move forward in court, U.S. Bankruptcy Judge John E. Ryan ruled Wednesday.

Ryan said he was sending Ericsson’s request to have a court review the county’s bidding process for the communications system to Orange County Superior Court, overruling the objections of county bankruptcy attorneys.

“If the process is tainted somehow, then Ericsson should have that process reviewed and its own bid approved, if the law dictates it should have been,” Ryan said. “I don’t see any significant impact on the [county’s] estate to remand this to state court for this limited purpose.”

The county had argued that the litigation would divert county resources from its primary task of solving its bankruptcy, and that Ericsson’s request should be automatically frozen along with all other pending litigation against the county.

Ericsson contends the county improperly awarded the bid to Motorola in January, 1994, after a review by a consultant with an alleged conflict of interest, and even though Motorola’s contract will cost the county $15 million more than Ericsson’s bid.

The county and Motorola deny the allegations.

Ericsson will ask the court to prevent the county from moving forward with the project during its review and prohibit the county from contracting with Motorola, if the court discovers any irregularities.

County bankruptcy attorney Lee Bogdanoff said that Ryan did not rule on the merits of Ericsson’s claims and that he feels confident that a Superior Court judge will find the company’s allegations are without merit.

“This matter has been reviewed by several independent public bodies and I assume that when the court reviews this, it will also rule in the county’s favor,” Bogdanoff said.