Partial Bankruptcy Settlement Approved
A $215,000 partial settlement, the city’s share of a county bankruptcy agreement being considered by several municipalities, was approved by the City Council on Tuesday.
Pending approval by the Bankruptcy Court, the city should receive the money by April.
City officials said they expect to get another $48,000 eventually, depending on the state of the county’s finances.
The settlement comes from city property tax revenue and related accounts that were frozen shortly after the county declared bankruptcy in December 1994.
Another $1.9 million of Lake Forest funds that had been in the collapsed Orange County investment pool has not yet been recovered.
The county would have to be successful in its pool-related lawsuits against investment companies for Lake Forest to get the money back, officials said. The city had about $9.6 million in the investment pool when it collapsed.
After budget cutbacks and a failed attempt to persuade voters to approve a tax increase, the county proposed a repayment plan aimed at returning about 80% of the pool funds to investors.
Start your day right
Sign up for Essential California for news, features and recommendations from the L.A. Times and beyond in your inbox six days a week.
You may occasionally receive promotional content from the Los Angeles Times.
