Latest Lawsuits Are Misdirected

So Orange County’s litigation attorneys are preparing a batch of new lawsuits against the attorneys and investment advisors. The case they should file is one to recover the costs and attorney fees of the bankruptcy from the lawyers who recommended the filing of bankruptcy in the first place.

The principal reason, if not the only reason, Orange County filed for bankruptcy was to prevent the brokerage houses from selling out the bond portfolio to cover the margin calls. The bankruptcy lawyers apparently thought that the automatic stay of proceedings on filing of a bankruptcy petition would apply to the stockbrokers. They were wrong.

The lawyers apparently overlooked a provision in the bankruptcy law exempting margin sales from the automatic stay and, although they initially threatened to sue all of the brokers who sold out the portfolio, that threat disappeared into the smoke screen of the other third-party lawsuits and quietly died there.

Except for the threatened margin sales, there was absolutely no reason for a bankruptcy filing. The bankruptcy lawyers who recommended the filing are the ones who should be sued.

CHARLES E. McCLUNG

South Laguna

* So Orange County has filed five new bankruptcy suits (“O.C. Sues Five Firms in Its Bid to Recover Investment Losses,” June 12).

This action is another example of why our civil legal system needs major surgery. These five new players will be blamed for the investment decisions of others. They and their insurance companies end up contributing only because it is less expensive than prolonged litigation. In the end we all pay--except for the litigation lawyers who are provided full employment.

Most countries require the loser to pay the winner’s legal costs.

This system reduces litigation and prods the players to settle faster.

RICHARD T. SHUIRMAN

Orange

* The responsibility for Orange County’s bankruptcy lies in the hands of former Treasurer-Tax Collector Robert Citron and the Orange County Board of Supervisors, no one else. Orange County taxpayers have already paid out thousands in legal fees to defend county officials to no avail.

Orange County taxpayers cannot afford more legal fees. Suing five firms is like bettors at a racetrack trying to sue a horse and his owners for not coming in on the money. Let’s lick our wounds, put the bankruptcy behind us and go forward!

LEONARD M. HERNANDEZ

Tustin