CEO Projects Bankruptcy’s End : Recovery: If plans proceed without problems, Mittermeier predicts the county can repay its creditors through a new bond offering by next summer.

Orange County Chief Executive Officer Jan Mittermeier announced Wednesday that she expects the county to emerge from bankruptcy by June 30 and said that it could occur sooner “if everything goes well.”

Mittermeier’s timetable is the most definitive so far for when the county will seek to end its Chapter 9 bankruptcy protection, which the county declared Dec. 6 after losing $1.69 billion on risky investments.

But the county won’t be in the shape it was before the financial collapse when it emerges from the worst municipal bankruptcy in U.S. history.

“We’ll never be back to where we were,” Mittermeier said. “And maybe that’s not a bad thing.”

She said the county must learn to live within its means and restructure government to make it more efficient.

“If there’s any good side, I think, to a bankruptcy, [it’s that it has] caused people to focus on how their governments operate and how they’re going to act with each other,” Mittermeier said.

Mittermeier’s official time schedule came two days after Gov. Pete Wilson signed into law three bills aimed at helping the county recover from bankruptcy. The laws enable the county to divert more than $800 million of transit funds and other revenue to pay off its massive debts over the next 20 years.

Under Mittermeier’s plan, the county would submit a “plan of adjustment” with the U.S. Bankruptcy Court by Jan. 1. The plan will detail exactly how the county intends to pay its creditors.

After a couple of legal review periods, in which creditors have an opportunity to comment on the county’s plan, the court will either approve or reject the plan of adjustment. Under Mittermeier’s timetable, the court would accept the county plan by May 1.

Following the court approval, she said the county would go to the financial markets June 30 to issue about $550 million in new debt to pay off bondholders.

Before the county can seek court approval, however, the recovery plan needs to win the formal approval of nearly 200 school districts, cities, special districts and other agencies that lost money in the county investment pool.

Most of the agencies already have given informal approval to the plan, which seeks to repay a portion of the debt owed to them with proceeds from litigation against Wall Street brokerage firms and others the county holds responsible for the bankruptcy.

Mittermeier said she expects the agencies to officially approve the county’s recovery plan by Oct. 30. But she said the sooner they approve the plan, the sooner the county can go to court to get out of bankruptcy.

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Timetable

CEO Jan Mittermeier announced plans to bring Orange County out of bankruptcy. The expected calendar of events:

* Oct. 30: County expects approval of joint settlement agreement from governing bodies of all 244 participants in Orange County Investment Pool.

* Nov. 10: County expects U.S. Bankruptcy Judge John E. Ryan to approve the agreement.

* Jan. 1: County plans to file a plan of adjustment with Bankruptcy Court.

* Feb. 15: A 60-day period of disclosure of the plan’s details concludes.

* April 15: A 60-day period for review and comment by affected parties concludes

* May 1: At final confirmation hearing, Judge Ryan approves plan of adjustment.

* June 30: County completes necessary public financing and emerges from bankruptcy.

Source: County of Orange