RED-INK DAYS : ORANGE COUNTY IN BANKRUPTCY

The key dates and crucial developments in the ongoing financial crisis that led to the largest municipal bankruptcy in history and changed the face of Orange County.

* Dec. 2, 1994: After stock market closes, officials verify rumors that county investment portfolio has lost nearly $1.5 billion in value.

* Dec. 4: County Treasurer-Tax Collector Robert L. Citron, the fund’s manager, resigns from post he held for 24 years.

* Dec. 6: Orange County files largest municipal bankruptcy in U.S. history, freezing assets of investment pool.

* Dec. 8: Internal audit shows county auditor warned officials more than a year earlier that investment pool was not adequately supervised.

* Dec. 13: County investment adviser, Salomon Bros. Inc., begins to sell pool assets.

* Dec. 27: Municipalities with investments in portfolio say Citron led them to believe money was in “safer” investments.

* Jan. 12, 1995: County sues Merrill Lynch & Co., alleging it concocted exotic investment scheme that broke state law and led to collapse.

* Jan 21: County audit discloses possible bookkeeping falsifications; $85 million in interest was diverted from pool participants to account managed by Citron.

* Jan. 27: Officials say Citron or his office transferred securities that had lost value from a county fund into investment account shared by pool investors.

* Feb. 10: County supervisors appoint former savings and loan executive William J. Popejoy chief executive officer.

* Feb. 24: County Administrative Officer Ernie Schneider and Assistant Treasurer Matthew Raabe are fired.

* March 7: Popejoy announces plans to lay off 1,040 county employees and eliminate 563 vacant positions.

* March 15: Popejoy recommends Measure R, a half-cent sales tax increase to pay for county’s recovery.

* March 21: John M.W. Moorlach, who ran unsuccessfully against Citron and warned of his risky investment strategies, selected new county treasurer-tax collector.

* March 29: Supervisors agree to special election June 27 to vote on Measure R.

* April 27: Citron pleads guilty to six felony charges relating to county bankruptcy.

* May 19: Schools, cities and other pool investors withdraw almost $2.3 billion in cash from pool; county had held back funds since filing bankruptcy.

* May 23: Orange County Transportation Authority rejects request of county supervisors, local members of Congress to dismiss $119 million in debts owed by county.

* June 5: Bankruptcy Court approves recovery bonds to partially pay off investors.

* June 27: Measure R soundly defeated by voters.

* July 10: County supervisors reach rollover agreement delaying payment of $800 million in short-term debt for one year; Standard & Poor’s downgrades county bonds to “D” rating, lowest possible.

* July 12: Popejoy announces he will resign effective July 31, with four months left in his contract.

* Aug. 7: Supervisor Gaddi H. Vasquez announces he will leave office Sept. 22, with 15 months left in his term.

* Aug. 22: Supervisors OK recovery plan before a crucial state deadline.

* Sept. 6: Kroll Associates report for county grand jury says supervisors failed to properly oversee Citron’s investment strategies.

* Sept. 15: On session’s final day, Legislature approves county’s recovery plan.

Source: Times reports

Researched by CAROLINE LEMKE and JANICE L. JONES / Los Angeles Times