ORANGE COUNTY IN BANKRUPTCY : Investors Challenge Agreement on Debt Rollover : Bankruptcy: County and bondholder groups resolve many differences on proposed extension, but some pool participants will try to derail it in court today.

Lawyers for Orange County and several of its bondholders groups have resolved many of their disagreements over a proposed one-year extension of about $1 billion in short-term debt.

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But a court battle is expected this morning as participants in the county’s failed investment pool try to derail the debt rollover agreement.

At least a dozen parties had filed objections in U.S. Bankruptcy Court to the proposed extension, opening a nasty rift among various constituencies in the county’s bankruptcy.

Negotiations this week, however, have resulted in compromises on several key issues raised by noteholders, and several attorneys said they might switch their position and support the agreement at today’s hearing in front of Bankruptcy Judge John E. Ryan.

“We’re attempting to work with the county and the creditors committee to resolve our objections, but nothing is finalized yet. We are talking constantly,” said Jean Morris, who represents some holders of $600 million in taxable notes issued last summer.

No such progress was made in resolving the objections of the committee representing 200 government agencies that lost money when the county-run investment pool collapsed late last year.

In interviews and court documents, the pool committee was accused of being selfish and hypocritical, and of misunderstanding the proposed agreement.

“The pool committee’s entire approach amounts to an off-road excursion,” Robert J. Moore, the creditors committee attorney, wrote in his filing. “It appears the objectors, like children hearing a compliment paid to a sibling, cannot understand that a benefit conferred on another need not mean deprivation to them.”

The proposed rollover would extend the maturities of about $975 million in notes and bonds coming due this summer until June 30, 1996. Investors would be paid about 75% of their monthly contract interest rate during the one-year extension, and then receive the remaining interest--plus a bonus of 95 cents for every $100 invested--next June.

In exchange for the extension, the county vows not to repudiate the debt, and also validates the debt of vendors and employees and promises them interest on the money they have been owed since the county’s bankruptcy filing Dec. 6.

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If Ryan approves the agreement, noteholders must vote individually by July 7 whether to roll their notes over. If 90% of them agree to the extension, it will effect everyone; if more than 50% but fewer than 90% accept it, it will affect only those choosing the rollover.

And despite the probable withdrawal of objections, acceptance of the rollover is far from assured: “I don’t think the withdrawal of objections means anything about whether they will consent when the time to vote comes,” said James Lopes, another noteholder attorney.

The county has conceded on several issues raised by bondholders and made several other changes to the complex document to clarify its language. The only controversy remaining concerns whether the vendors and employees should be allowed to benefit from the debt validation, regardless of the bondholder vote on rollover.

But little progress has been made on the issue raised by the pool committee and about half a dozen other pool-connected groups that filed objections.

In general, the pool objections assert that the proposed rollover agreement goes too far and amounts to a bankruptcy Plan of Adjustment affecting all of the county’s creditors, rather than a simple agreement with noteholders. They worry that the documents subordinate the claims of pool investors to other county debts.

But the county and various creditors contend in court papers that the pool committee itself agreed to subordinate that debt--which amounts to $550 million, or 10% of each agency’s Dec. 6 balance--in a settlement agreement approved by Ryan last month.

“Having successfully documented the extremely complicated settlement . . . the pool committee now is attempting to torpedo an equally crucial, but far less preferential and comprehensive, settlement of the claims of other parties,” the county lawyers wrote in their brief.

Times staff writers Michael G. Wagner and Susan Marquez Owen contributed to this article.